Medicare for Young Folks: A Case Study (Part 2)

In Part 1, we met a young lady who suffered a tragic medical setback, and is now unable to live on her own, and whose medical care is paid for by Medicare. We also began to learn about what alternatives or supplements might be available to her and her family to help fund her care.

The Medicare Advantage plan seemed promising. One immediate challenge is that the most recent regular Open Enrollment period ended last month, and the next one doesn't start until the Fall. The good news, according to my personal Medicare Advantage guru Roger D, is that folks on the Extra Help program are pretty much always in Open Enrollment, so she may be able to hop on to an Advantage Plan.

So we'd now identified 3 potential avenues: an Exchange plan, her father's retirement medical plan, or a Medicare Advantage plan. It was now time to do a little more digging, and then to meet to review the results:

As it turns out, folks on Medicare can not (easily) buy an ACA Exchange policy. As the folks at CMS explain:

"It’s against the law for someone who knows that you have Medicare to sell you a Marketplace plan."

But what if you really, really want one?

Well:

"[T]here are some situations where you can choose Marketplace coverage instead of Medicare ... if you’re eligible for Medicare but haven’t enrolled in it ... If you’re paying a premium for Part A, you can drop your Part A and Part B coverage and get a Marketplace plan"

Oh. Well, our young lady is already enrolled, so the first "out" won't work. And the second alternative didn't seem very promising, since she wouldn't be eligible for a subsidy.

So much for that.

Adding her to my friend's plan has some attraction: it's a known quantity (and is itself a Medicare Advantage plan with some great benefits) and offers the convenience of having one plan (and carrier) for both.

I had, however, a concern: what happens if/when my friend passes away - can his daughter stay on the plan? After poring over the written materials he had brought with him, and several frustrating phone calls to the carrier, we still don't have a definitive answer. This is troubling, but not necessarily a deal-killer.

So we called Roger (my guru) and had a very frank and helpful discussion about a separate Medicare Advantage plan for the daughter. First, we confirmed that she is, in fact, an Extra Help participant, so the Open Enrollment issue is moot. Second, we learned that there are several $0-premium Advantage plans available here, saving my friend several thousands of dollars in extra premiums. These plans also cap her out-of-pocket exposure to about $4,000 a year, which is well within my friend's means to cover.

One thing that still needs to be done before a final decision is made is to confirm that her doctors and other providers are in-network, and to check her meds against the carriers' formulary lists.

My friend was delighted that a good plan is available at a very affordable cost ("free"), and was very impressed with Roger's depth of knowledge about not just the Advantage plans but also the Extra Help and other programs. He even suggested some other places for my friend and his daughter to look for additional resources and help.

It's such a blessing to have access to folks on whom I can call to ask for help and advice, and who I know will take care of my clients. It makes me look good (no mean feat in itself), and they get quality advice and service.

And there's this: I try to learn from every interaction I have, whether or not I make a sale. There is no doubt that I'll have the opportunity to use what I've learned on this case down the road. And that, too, is no small thing.

Cavalcade of Risk #201: Call for submissions

Russell Hutchinson hosts next week's Cav. Entries are due by Monday (the 3rd).

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.

Happy Blogiversary!

Hard to believe, but today marks the 9th anniversary of InsureBlog. As always, I find it helpful - and humbling - to revisit my very first post, and to contemplate with pride how far we've come.  This past year, we welcomed new co-blogger Pat Paule, who brings still another interesting perspective to our pages.

Words can't express how fortunate I feel to be working with Bob, Mike, Nate, Kelley, Bill and Pat. As I often brag, I am blessed with the very best co-bloggers on the 'Net.

Most important, of course, are our loyal readers (and followers) who visit us each day - Thank You!

The (Un)Affordable Care Act: Film at 11:00

[Hat Tip: Ace of Spades]

Medicare for Young Folks: A Case Study

A friend of mine recently reached out to me for some advice about his disabled daughter. Years ago, while an Honor Student at a prestigious Midwestern university, she needed emergency surgery, and while under anesthesia, an accident occurred: oxygen was cut off to her brain for many minutes, resulting in permanent brain damage.

She is still able to converse for brief periods of time, but unable to earn a living or live on her own. Even though she's only in her early 30's, she does qualify for Medicare and for the "Extra Help" program that substantially reduced her out-of-pocket for necessary medications.

Her father - my friend - is retiring soon, and asked for my help in researching health insurance alternatives for his daughter. What he was looking for would be a pre-65 Medicare supplement (MedSupp) for her. He already knew of one potential source: for a monthly premium of $300, he could add her to his post-retirement health plan (provided by a former employer). He asked me if there were others, and I agreed to research this (mostly because I think this is a very interesting scenario, plus I get to help a friend).

I identified several potential avenues, and began to determine their viability:

First, I recalled that - years ago - the 'Medicare And You booklet' put out by our state Department of Insurance (DOI) used to include a list of the handful of carriers that sold pre-65 MedSupps. I clicked over to the site and downloaded the latest version, and began to search through it for that list.

It was nowhere to be found.

So I called the DOI to see if I was just looking past it, and was told that it wasn't me: there are currently no longer any carriers that market these plans (at least not here in the Buckeye State). So much for that.

But the nice gentleman at the DOI did mention that Medicare Advantage plans are available to serve this market, although the young lady would have to be in an Open Enrollment period. I turned to my own Medicare Advantage guru, Roger D (I long-ago decided against selling these myself), who kindly offered his expertise. One thing he suggested I do is to determine whether or not the young lady was participating in the Extra Help program.

Extra Help enables qualifying Medicare beneficiaries to purchase their meds at greatly reduced prices, with the government (well, fellow tax-payers) picking up the cost. According to the Social Security Administration (which oversees the program), Extra Help "is estimated to be worth about $4,000 peryear." Nice!

I also started looking into whether or not she could buy an ACA-plan from the Exchange.

In Part 2, we discuss the results.

Health Wonk Review is up...

Brad Wright hosts this week's round-up of wonky health-related posts. It's quite an effort, with lots of great posts and helpful context. Do check it out.

Thursday Morning LinkFest

■ From the Stupid Carrier/Government Tricks File:

"State insurance regulators have reached a settlement with the Genworth Life Insurance Company over the insurer’s use of the Social Security Administration's Death Master File database."

The carrier has agreed to more aggressively utilize the Social Security Administration's Death Master Files (DMF) to search for potential claimants.

Only one thing wrong with this whole (stupid) idea:

As we reported almost 2 years ago, "the DMF is itself rife with potential errors and misinformation" and there's no indication that this has been addressed.

Garbage in, garbage out - but hey, at least the states' insurance departments get to nick GW's policy- and other stake-holders for some quick cash.

■ Deadlines? What deadlines?

"The IRS [has unilaterally decided that] it will wait at least until 2015 to enforce the nondiscrimination rules, at the earliest, because defining terms such as “highly compensated employee” and “discrimination” has been difficult."

Math is hard? Who knew?

More importantly, under what authority is the IRS declining to enforce the law? 

■ And speaking of IRS malfeasance, turns out they're having no problem defining how to enforce the Evil Mandate ObamaTax on ordinary citizens:

"The Internal Revenue Service has drafted a collection of proposed regulations that could determine whether some taxpayers will owe fines for failing to get health coverage ... The IRS assumes many enrollees are confused"

Gee, whatever gave them that idea? 

■ This is kind of scary (if unsurprising): International Medical broker Global Underwriters has provided a "brief Travel Alert Update and Product Overview for all of our brokers and agents that have clients traveling internationally."

Specifically, there are significant concerns about the upcoming Olympics, since "[a]cts of terrorism, including targeted bombings, hostage taking, suicide bombing continue to occur in Russia particularly in the North Caucasus Region."

Is this destined to be a repeat of Munich '72?

Educating Obama on Pre Existing Conditions

In case you hadn't heard, last night was the State of the Union Address. In the hour plus speech President Obama mentioned health care reform for roughly two minutes. The focus during that time was on how nobody could be denied coverage now because of a pre-existing condition. Here is the script taken right from the teleprompter:

Now -- a pre-existing condition used to mean that someone like Amanda Shelley, a physician's assistant and single mom from Arizona, couldn't get health insurance. But on January 1st, she got covered. (Applause.) On January 3rd, she felt a sharp pain. On January 6th, she had emergency surgery. Just one week earlier, Amanda said, that surgery would've meant bankruptcy. That's what health insurance reform is all about, the peace of mind that if misfortune strikes, you don't have to lose everything.

I'm glad Ms. Shelley #GotCovered. But a pre-existing condition is one that a person has prior to purchasing insurance. Her emergency surgery and sharp pain happened after she had purchased insurance.

This was not a pre-existing condition. It would have been covered before Obamacare. Likewise, under Obamacare, if Ms. Shelley wouldn't have purchased insurance on January 1st her emergency surgery would not have been covered on January 6th.

Either President Obama and his speechwriters don't understand their own law or they simply choose to lie about it. If past history is an indicator, my guess is it is the latter.

PPACA - governing arbitrarily rather than lawfully.

Via the indispensable Overlawyered comes  this article published in the Journal Regulation:

You’ll find it well worthwhile to read the entire article, but here are its concluding paragraphs:

"In his classic 1964 book The Morality of Law, Harvard legal philosopher Lon Fuller listed several criteria that mark the break-down of the rule of law. They include the lack of rules, leading to inconsistent decisions; rules that are secret or unintelligible; the use of retroactive legislation; commands requiring citizens to do the impossible; edicts that change unpredictably; and a gap between the rules and the way government actually operates. A society suffering from those maladies is likely to be governed arbitrarily, rather than lawfully.

"Sadly, even in its early stages, PPACA already manifests many of those symptoms.  It left many crucial terms unexplained; even “minimum essential coverage”—i.e., what kind of insurance the law requires Americans to purchase—was left for HHS bureaucrats to define later, outside the reach of the ballot box. The employer mandate was unilaterally extended by administrative fiat beyond the statute’s clear command—yet Republican demands for a similar extension of the individual mandate were turned away, only to be granted in a modified form weeks later when HealthCare.gov proved a failure.

"Those and other aspects of the legislation’s halting and unpredictable implementation reveal serious flaws in PPACA. But they also demonstrate a deeper crisis.
"In the pursuit of progressive goals, the Obama administration and its congressional allies have done long-lasting damage to a constitutional order that was meant to preserve individual liberty by cabining government power along clear, predictable, and democratically accountable lines."

Shall Americans accept such assaults on the Constitution and the rule of law, by following this increasingly tinpot President down the rabbit hole of unilateral government thru arbitrary enforcement and Executive Orders?  Sadly, this remains an open question.

My new article is up...

At Answers.com:

"Homeowners' and business insurance policies don't cover losses caused by floods, and many home and business owners don't even realize this. Up top 25% of all flood insurance claims come from low or moderate risk areas, where premiums may be very reasonable because of the smaller risk."

Down to the wire...

From Anthem email:

"Reminder: January 31 is payment deadline for individual plans effective January 1

Consumers who purchased an individual health plan with a January 1 effective date have until January 31 to submit payment for their first months premium. This applies to individual plans bought on or off the exchange."

One wonders how many will comply, and what happens to those who don't. Recall, also, that the original deadline was the 1st. How many more extensions will Ms Shecantbeserious approve?

When you've lost Jim Moran...

Congresscritter Jim Moran (D-Va) is concerned:

"I’m afraid that the millennials, if you will, are less likely to sign up [for the ObamaTax] ...  don’t think we’re going to get enough young people signing up to make this bill work as it was intended to"

Here's the point, to which Rep Moran passingly alludes: in order for the numbers to properly crunch, there has to be a mix of both healthy and young people (not necessarily the same thing). Absent one, or both, the system will quickly fall apart, since it's on the shoulders of those two demographics that the premium structure relies.

How's that, you ask?

It's pretty simple, really: since the ObamaTax limits the premium differential between young and old, the former are needed to subsidize the costs of the latter. This means that young people will pay disproportionately higher premiums in order to artificially lower the folks in their 40's and 50's.

And since the law now requires that insurers take everyone whop comes a-callin' - and the sicker the better, really, for the photo ops - the healthiest are now subsidizing their less fortunate fellows to an even greater extent than under our previous system.

What's that word I'm looking for? Oh, yeah.

Timing is everything

This past Fall, I had the opportunity to help one of my long-time clients - who's also a good friend - buy some additional life insurance. My friend, we'll call him Ted, is a bit, um, portly, so he didn't qualify for the best rates. Still, he was satisfied with the offer that the carrier tendered, and we secured the coverage.

One evening recently, Ted called me at home with some scary news: he was calling from the hospital, where he had just been admitted because they had found what appeared to be a brain tumor. Surgery was scheduled for the next day, and he didn't want me to hear the news from a third party.

Of course, I wished him well, and asked if there was anything I could do for him or his family. Mostly, he said, send good thoughts and prayers that the surgery would be successful, and that it would turn out to be something treatable. Of course I agreed.

He did have the surgery, and we're still waiting on the results. In the meantime, though, I immediately went back and reviewed the recent application and coverage binder to be sure that all the i's were crossed and t's dotted. This is especially critical in a case such as this: life insurance policies have a one- or two-year "contestability" clause (often erroneously referred to as a "suicide clause"). Briefly, the contestability clause allows the carrier to review a recently approved policy to see if there were any misstatements or misrepresentations, or if relevant information was omitted (such as a history of cancer).

Thankfully, none of that appears to be the case and, since I've known Ted for over 20 years, I think I'd have a pretty good idea if he had skipped anything important on the application.

Here's why I'm so grateful that he agreed to the final rate: for at least the next few years, Ted isn't going to be able to buy any additional life insurance and will likely never qualify again for even these rates.

Sometimes, it pays to listen to your agent.

MVNHS© vs Seniors

This is the future of the ObamaTax, as well:

"Pensioners with cancer are being written off as too old to treat ... survival rates for British patients aged 75 and over are among the worst in Europe."

And younger Brits with cancer aren't faring so well, either:

"Young lung cancer sufferers are only 10 per cent more likely to die within five years than their continental counterparts"

Gotta love that "only" qualifier.

Obamacare Success in Illinois

Amidst broken websites, and broken promises, apparently #Obamacare is working well in the land of Lincoln.

The Illinois Medicaid program received the first 5,000 of those Medicaid applications from the federal government Thursday, said Mike Koetting of the Illinois Department of Healthcare and Family Services, the state's Medicaid agency. Federal officials have informed Illinois there will be 76,000 total applications representing 110,000 individuals, Koetting said.

"That will completely swamp us," Koetting said at a meeting of state health officials in Chicago. Illinois Department of Human Services Secretary Michelle Saddler agreed, saying the incoming applications will "create major problems" and that her agency, which processes the applications, had "a gargantuan task ahead of us."

Mike Claffey, a spokesman for the Illinois Medicaid program, said the state is hiring additional workers and hiring temporary workers to keep up with the expected load.

Daily Journal

I guess Obamacare isn't the jobs killer it has been billed to be.

Today, I spent three hours listening to Anthem's on-hold music...

Somewhere, in one of the deepest circles of Hell, Anthem's over modulated, distorted, horrible music is playing...for eternity.  Be good.  Or else....

Over the cliff? [UPDATED]

[Please scroll down for update - HGS]

We've maintained for a long time that the actual intended result of the ObamaTax was, in fact, Single Payer. And the evidence making that case continues to pile up:

"Aetna CEO Mark Bertolini told CNBC on Wednesday that Obamacare has failed to attract the uninsured, and he offered a scenario in which the insurance company could be forced to pull out of program ... He said that so far, Obamacare has just shifted people who were insured in the individual market to the public exchanges where they could get a better deal on a subsidy for coverage"

Let's unpack this a bit, shall we?

First, I think it is rather frightening - and instructive - that the CEO of a publicly traded company, let alone a major player in the health insurance market, is signaling that his company may willingly walk away from its individual policy market. That represents a major portion of its core business, and he's saying that it may well go "poof."

Second, the news - and most of our readers already know this, of course - that the majority of the "new" business coming into the Exchanges is, in fact, folks whose previous coverage was cancelled despite the President's explicit and repeated promise that this would not happen. So we're not talking about "newly" insured here. As Yogi Berra, CLU might opine, "the uninsured are staying away in droves."

Not exactly what we were promised, either.

UPDATE: In the comments, John F and Bob H make the point that this may be much ado about, well, nothing much. Upon reflection, I think I have to agree with them. On the other hand, it's probably worth at least noting that Aetna is signalling their concern over the viability of the individual market. Is this concern over-stated? Perhaps. It will be, um, interesting to see how this plays out.

It's a Green Thing

What with all the winter white covering the ground, it's easy to forget that there's green underneath, as well. FoIB Bob Graboyes, senior research fellow at the Mercatus Center at George Mason University, has a slightly different take on the color, though:

"The battle for the soul of American health care is not really one of Democrat versus Republican or liberal versus conservative. Rather, it is between competing visions we can call the Fortress and the Frontier."

And what, you may ask, is "the Frontier?"

Well, as Bob explains it:

"The Frontier believes elites overestimate the capabilities of insiders and underestimate the abilities of outsiders. Innovation is the imperative."

And he then explains exactly how innovation and lateral thinking can drive down health care costs while maximizing effectiveness.

And make sure to check out the green plastic fingers.

Polar Vortex Risk Management

While much of the country continues to shiver from Polar Vortex v2.0, the biggest risk most of us are thinking about is frostbite and slipping on the driveway.

Or perhaps our pipes freezing [ed: from a strictly utilitarian viewpoint, the gentleman was successful].

But there are really a number of other severe weather risks about which we should be aware, and for which we should be prepared. Courtesy of FoIB Bill M and the fine folks at Auto Owners Insurance, here are few key Polar Vortex-related risks:

■ Ice Dams: these are "accumulation(s) of ice at the lower edge of a sloped roof ... [as] interior heat melts the snow on the roof, the water [runs] down and refreeze(s) a the roof's edge." This, of course, leads to a build-up of ice and creates major drain blockage which could end up forcing water into your walls and ceiling.

How to mitigate this risk: make sure your attic is well ventilated and keep the floor of the attic insulated. 

■ Freezing pipes: as mentioned above, a blow torch (while effective) is not recommended. Water is funny: it expands when it freezes (perhaps you've noticed this phenomenon in your freezer's ice tray). When the water in a pipe freezes, it can expand so fast and so much that it breaks (bursts) the pipe.

How to mitigate this risk: insulate exposed pipes with special (and inexpensive) foam sleeves. You should also seal any cracks in outside walls, and keep cabinet doors open so warm air can circulate. Don't forget to keep a slow trickle of water going, especially on lines that pass through exterior walls.

Oh: a hair dryer beats a propane torch if you do have a frozen pipe (really!).

Be safe, and stay warm.

Good News for Medicare Advantage

Aetna CEO Mark Bertolini was interviewed today on CNBC and offered a number of important insights about Medicare Advantage.

First, overall Medicare Advantage enrollment for 2014 rose more than anyone expected. 

Next Bertolini suggested that Medicare Advantage is now “too big” for the federales to shut down.  Nearly 30% of all Medicare-eligible seniors today have elected to buy a private Medicare Advantage policy rather than enroll in traditional Medicare.  That’s around 14 million people.   Bertolini also said that today's employees are increasingly willing to sign up for Medicare Advantage when they reach age 65, because they have had years in which to become familiar with managed care.  I think that means enrollment growth in Medicare Advantage is likely to accelerate over the next few years; an accelerating trend would of course be compounded as more “boomers” retire.

CMS pays private insurers to take over the risk for each senior who enrolls for Medicare Advantage.  At one time, the average CMS payment was 114% of the cost for traditional Medicare enrollees. These higher payments were partly because of risk-adjusters in the CMS payment formula – and partly because Medicare Advantage provides better coverage than traditional Medicare.  However – and this is important information – Bertolini said the average government payment to Medicare Advantage insurers is now down to 106%, and is “headed to zero.”  

In other words, private Medicare Advantage insurers believe they have figured out how to provide better benefits and better service than traditional Medicare, for the same cost. That's big.

It's big because it would bring good news all around: CMS will shed even more traditional Medicare risk – and cost – thus reducing its financial strain; private insurers will pick up even more Medicare Advantage enrollment on a profitable basis even when paid the same as the cost of traditional Medicare; the taxpayers will benefit if there is reduced need for higher taxes to support traditional Medicare; and seniors who prefer Medicare Advantage over traditional Medicare will still have that highly popular option available to them. 

My new article is up...

At Answers.com:

"Deferred Compensation plans, also known as Salary Continuation plans, are used by businesses to reward and retain certain key employees while minimizing their current taxes."

Healthy Food News

It's been almost a year since our last Food Pyramid update, and there's some great news to share:

"Chocolate and red wine can help stave off diabetes: High levels of antioxidants can regulate blood glucose levels"

Turns out, the candy, booze and fruit diet provides a boatload of "flavenoids" - antioxidant compounds - that may help to regulate one's glucose levels.

Eat, drink and be healthy!

Another Sceptered Isle falsehood – this one from a Quango

From an article in the London Telegraph today, January 22,  “ . . . patients suffering from cancer and other serious illnesses are being denied the drugs they need from the NHS, according to a Quango report." Even though the treatments have been approved by the health service rationing body [“NICE”], the Quango finds that at least 14,000 patients a year are not receiving them.

So a long-established government-run medical care service ignores its official death panel by withholding medical services from citizens who have the most serious illnesses?  Alarming, is it not?

How can this happen?  Locally, it seems.  The Quango report continues “patients were being condemned to an early death because local NHS bodies were failing to fund drugs even though they had been proven to work.”

It's important to understand that less than one year ago, legal responsibility for managing most of the NHS budget was transferred to new local bodies, overseen by an NHS Commissioning Board  ". . . charged with ensuring [the local bodies] do not overspend their budgets."  To protect their budgets, it appears these local bodies decided not to spend money on expensive drugs for some of their sickest patients.  

As a sad result there will likely be more local bodies than just the new NHS bodies.

By the way, exactly who or what is a “Quango”?   It’s a quasi-autonomous non-governmental organization. Her Majesty’s government defines a Quango as a non-departmental public body that has a role in the processes of national government, but is not a government department or part of one.  This means a Quango is meant to operate more or less at arm's length from Ministerial control.  This particular Quango is the “Health and Social Care Information Centre”.

But now - let’s get real.  This story – like others before itand in fact any story critical of NHS that you might read from today until the end of time -  is false.  How do we know these stories are false?  Because Paul Krugman told us so, that’swhy.

So relax everyone.  Besides, neither the U.S. government nor one of the States would ever, ever do his kind of thing.

Cavalcade of Risk #200(!): Community Gratitude edition

Jeff Root hosts this week's milestone Cav, with another eclectic and interesting collection of risk-related posts. Come for the alarming news on first-day-on-the-job deaths, and stay for risks of marijuana laws.

And here's to the next 200 Cav's!

PS: We're still looking for Spring-time hosts - just drop us a line to sign up.

About that Convenience Item Mandate

What do trolley cars and birth control have in common?

Dr Jaan Sidorov, one of my favorite med-bloggers due primarily to his uncanny ability to cut through the chaff, has penned a remarkable post laying out the case of the Little Sisters of the Poor and their case against the ObamaTax birth control convenience item mandate. It is by far the most concise post I've seen on the topic, and lays out the case, the issues, and the implications in the context of the Trolley Car thought experiment:

"There is a runaway trolley barreling down the railway tracks. Ahead, on the tracks, there are five people tied up and unable to move. The trolley is headed straight for them."

Click on through to see why this is relevant.

What Does Obamacare Have in Common With the Mafia?

How is Obamacare like the Mafia? Once you are in you can never leave. 

Meet Lesli Hill.

Missouri resident Lesli Hill learned the hard way that terminating an Affordable Care Act plan can be far more difficult than navigating the website to buy one. She spent six weeks being bounced from operator to operator, calling the help line, using the online chat, blasting out emails to anyone who would listen, before ultimately driving to Kansas City last week to enlist her insurance company's help. Only then was she able to break through the bureaucratic logjam, and cancel her policy. 

Fox News

If Obamacare is so great why did she want out?

Her exchange plan didn't suit her so she went looking and found a BETTER plan outside the exchange.

This is not unusual. Georgia citizens can almost always find a health insurance plan with a broader network for about the same price as an exchange plan before subsidies. Similar stories pop up in other states as well.

She checked with Blue Cross Blue Shield in early December and was told she'd have to cancel her ObamaCare plan first. 

"At that point, I hadn't paid my premium ... so I thought okay, that'll be easy to do," she said. 

Ostensibly, yes. She tried using a simple "terminate button" on the website -- but it wasn't working. 

I presume the button is on the infamous healthcare.flub page.

When that didn't work she called the help line. 

Several times. 

Over several days. 

Eventually she was reassured the original plan was terminated.

But then her bank account was drafted for the initial premium on the terminated plan.

What follows is the ultimate irony of dealing with government bureaucracy.

Hill went on a blitz, breaking through to another layer at the HealthCare.gov help line. But the answer she was given was that cancellations are handled by a "special department," the number of which could not be given out. 

"He said, 'I'm not allowed to tell you that,'" Hill told FoxNews.com.

I suppose the good news is they didn't say they could tell her but then they would have to kill her.

Obamacare, the Hotel California and the Mafia all have something in common. Once you are in you can never leave.

Twisting the Cost Curve

One of my clients inadvertently let his pre-ACA health insurance plan lapse this past fall. Unfortunately, he didn't act quickly enough to get it reinstated.

So we've been looking at new ObamaTax plans, and he's in for rather a shock:

His "old' plan was a $2,500, 0% co-insurance HSA plan. That is, once he met his $2,500 annual deductible, covered expenses were paid at 100%. His monthly premium was just about $265.

Fast forward a couple months, and here are his choices: a $6,000 deductible, 0% co-insurance plan for about $400 a month; that is, a 240% increase in out-of-pocket along with a 150% premium increase.

Or:

If he'd like to get back down to somewhere close to his previous out-of-pocket max, he could choose the Gold option with its sexy and seductive $2,000 deductible (and no co-insurance) for the low, low monthly price of ... wait for it .... $647 a month, or 245% higher premiums.

Could be worse.

Obamacare: CGI Out, Accenture In

The First Lady's buds at CGI are on the street after taking some $600 million or so of our

money. They are replaced by Accenture that won a "no bid" contract for $91 million of our money.

CGI was let go was because the government had no confidence that the company could affect the changes necessary to get the payment system up and running in time to avoid disaster.

P J Media

No confidence.

Many have similar feelings about this administration and their ability to do anything right. But I digress . . .

The change is made to avoid disaster. That's like the captain of the Titanic ordering "Hard to port" after the ship struck the iceberg on the starboard side.

“There is limited time to build this functionality and failure to deliver…by mid-March 2014 will result in financial harm to the government,” the document says.

 “If this functionality is not complete by mid-March 2014, the government could make erroneous payments to providers and insurers,” it continues. “Additionally, without a Financial Management platform that accounts for enrollments and associated program costs that integrates with the existing CMS Accounting platform, the entire healthcare reform program is jeopardized.”

Seriously?

They put forth a trillion dollar plus tax law that relies on Chinese funding but are just now concerned about financial harm to the government?

Give me a break.

 failure to complete the project by mid-March could result in “inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers.”

Many of the newly minted insureds are already racking up medical bills faster than a high school student with mom's credit card. The carriers need all the premium dollars they can round up to pay these bills and even that may not be enough.

the system is vulnerable to “inaccurate forecasting” of the risk mitigation programs in place to pay insurers who enroll a higher-than-expected number of sick patients with expensive bills, “potentially putting the entire health insurance industry at risk.”

Time to reflect on what has happened thus far.

Back in the dark ages, before #Obamacare, carriers were in the risk management business. They were allowed to evaluate each risk and price accordingly or refuse to insure the individual if the required premium exceeded state limits.

Enter Obamacare and suddenly carriers are now cash flow managers instead of risk managers. Their job is to find a way to fund 10 Essential Health Benefits while at the same time issuing a health insurance policy to anyone who can fog a mirror. Prices are no longer based on gender or health but now must follow a community rating formula that tracks the cost of health care for a defined geographic area and use that to develop a premium rate.

What if this approach was used for home owners insurance? Everyone in my zip code where the average price of a home is in the $280,000 range would pay the same price. It would not matter if you lived in a $5 million "mansion" or a $45,000 loft condo, everyone pays the same premium. Further, all home owners policies would include liability coverage for a swimming pool and replacement coverage for a home theater whether you had one in your loft condo or not.

Accenture will also have to clean up some aspects of the project that CGI failed to complete, such as the notorious 834 enrollment transmissions to insurance companies that in October and November were transmitting inaccurate and garbled data.

With a mid-March deadline less than 60 days away you have to wonder if this Herculean task is even possible. Build a back end payment system from scratch while cleaning up the mess from the failed $600 million dollar website.

Of more interest is the “drop dead” date for Obamacare. Is it routine for bureaucrats to be overly dramatic in tasking a contractor, exaggerating consequences for failure? I can think of no reason why a procurement document would employ such a tactic, which leaves us with the very real possibility that Obamacare is in deep, deep trouble regardless of who signs up and how many.

Obamacare Open Enrollment Phase II ends on March, 31, 2014.

Or does it continue for all of 2014?

Stay tuned.

One could term this a Chinese fire drill but since we are reliant on red China to fund this mess perhaps we should refrain from insulting them.

Perhaps Larry, Moe and Curly is a better choice but the morons, imbecile's and nitwits of the world might be equally insulted.

Obamacare data security - an awakening issue

It's said that the wolf who sleeps is still a wolf.  I think the issue of Obamacare data security is a big, bad wolf that has been sleeping but will soon awaken.   It won't be pretty.

From Powerline Blog, this today:

"Web security expert David Kennedy appeared before a House Committee this past week to testify on the security flaws of Healthcare.gov . . . According to Kennedy, site security is a joke."

An administration witness who appears in the clip embedded in the Powerline article claims that their own testing met "all industry standards" and was completed in a "stable environment".   (stable environment?  when did that happen?)

But then David Kennedy notes a half-dozen other independent security researchers who reviewed Kennedy's analysis and agree that Obamacare security is inadequate.  

It appears that, once again, the Obama administration may not be telling the truth, the whole truth, and nothing but the truth. This time the clever evasions are about the security of the systems that hold and process Americans' confidential financial and health information. 

Why would the administration be evasive about this?  So that an uninformed public would continue to enroll for Obamacare?  Say it ain't so, O!

Sadly, it is becoming more and more difficult to believe anything this administration says about Obamacare - or about many other things, for that matter.  

UPDATE:  Full clip of the Kennedy interview - about 9 minutes

SEIU Recycling Failed Ideas

Some ideas just never die no matter how many times they're tried and fail:

SEIU-United Healthcare Workers says its proposed measures represent the nation's most wide-ranging and aggressive ballot efforts to control hospital costs. They include one measure that would prohibit hospitals from charging more than 25 percent above the actual cost of providing patient care, and another that would bar the executives of not-for-profit hospitals from earning more than $450,000 a year.

Cost Plus use to be the predominant way insurance was administered and the basis of many provider reimbursement schemes. They all end the same way;

1. Massive Fraud inflating cost basis
2. Legal inflation of cost basis

It's nice to see the true problem with health care's cost getting discussed, but SEIUs blatant, opportunistic proposal should be called out for what it is.

Why would SEIU prefer this over other reference pricing schemes? It doesn't hinder the pay of their members. Hospitals can pay bloated salaries to employees or over-staff egregiously and actually be rewarded for it.

This is Where Your Money Went

If you were a business person, offering a product everyone was required to buy (or else pay a tax), what kind of return on your investment would you expect? How about conversion rates? 

You are promoting something almost everyone will need at some point in their life.. So you put up a website and spend millions of taxpayer dollars promoting the site. All kinds of advertising, celebrity endorsements, rally's.

Sounds like a plan, huh?

Wrong.

According to government tallies, 44.5 million people called or visited state and federal websites they said, presumably indicating broad interest in the new benefit.

But we also know that only 2.2 million people have signed up for Obamacare. Factoring in all of the professed web traffic, this would mean that the number of people who signed up (but didn’t necessarily pay) for an Obamacare health plan amounts to a conversion rate of less than 5% of the Obamacare web traffic.

Forbes

Ishtar did better than that.

2.2 million, or 5% of VISITORS signed up. But signed up does not translate into sales except in Obamaworld.

In Obamaworld, putting your order in the shopping cart counts as "signed up".

In the real world, thousands of shopping carts do not constitute a transaction until you have actually PAID for your merchandise.

This data strongly suggests that eligible consumers, who take the time to kick the tires on Obamacare, don’t like the products that they’re finding in the exchanges. They’re browsing, but not buying.

Lookee-loo's. Window shoppers. Time wasters. Do nothings.

They don't like the product. Something Obama and Company did not count on. Like a siding salesman in a cheap suit, DC continues to drone on about the perceived virtue of Obamacare. They believe if they talk about it often enough you will actually buy their inferior product.

The problem is that the Obamcare plans aren’t attractive to consumers. They were designed in Washington to suit political prerogatives rather than being designed in the marketplace to meet the demands of consumers. They’re laden down with costly mandates that leave the products too expensive. The plans try and make up for these costs by using narrow networks of cheap doctors and closed drug formularies. Despite the skinny networks, the plans still leave consumers with big premiums and deductibles. Washington managed to simultaneously degrade the coverage, and make it more expensive.

A product you may or may not want but are required by law to buy. Once you see what is behind door number 3 you don't want it at any price, much less the price they are asking.

The problem with Obamacare is it’s product driven and not market driven. They didn’t ask the customer what they wanted. 

This is what you get when lawyers design a product for consumers and have unlimited access to your cash to promote their junk.

And therein lies the problem.

Looking still worse.

Following similar recent reports on the web - and a few even in the legacy media - WSJ reports this morning that "Early signals suggest the majority of the 2.2 million people who sought to enroll in private insurance through new marketplaces through Dec. 28 were previously covered elsewhere" [subscription required].

Credible estimates suggest two-thirds of the 2.2 million were previously covered elsewhere.

Could it be good news if there are too few newly-insured to create meaningful adverse selection?

But seriously it's bad news if so far only 10% of the administration projection of new enrollment has materialized.  (700,000 out of 7 million projected by March 31).  After considering the millions who lost their policies because Obamacare defined them as "substandard" the enrollment so far has not begun to reduce the number of uninsured.  

This administration is like the little kid trying to fix a mistake with a dirty eraser. The more he rubs, the worse his paper looks.

Your Tax Dollars at Work

Words truly fail. There are Six. Long. Painful. Hours of this:



[Hat Tip(?): Ace of Spades]

Cavalcade of Risk #200(!): Call for submissions

Jeff Root hosts next week's Cav. Entries are due by Monday (the 20th).

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.

HOSTING BLEG: We have open slots for March and April - Please consider hosting a Cav of your own. Just drop us a line here. Thanks!

Cat Plan and HSA Update [UPDATED]

[Please scroll down for update - Thanks!]

So it turned out that my prediction regarding the availability of Catastrophic plans to the over-30 crowd has been confirmed: of the 5 major carriers in this market (southwest Ohio), only 1 offers this option. Surprisingly (to me, anyway), that carrier is Golden Rule, er, United Health One. None of the others surveyed offer it.

On the one hand, 20% is still decent, but I think it's unlikely that any of the other carriers are going to be scrambling to get a piece of that action.

And while we're on the subject of high deductible plans, Bob pointed out, in comments to yesterday's same-sex couples' insurance woes post) that "Some HDHP (HSA qualified) plans use an aggregated deductible for family plans. As a family you must satisfy $12,000 in expenses before the carrier pays [aggregate model]. But if you split them into two separate plans the carrier will pay once you (as an individual) hit $6,000 [embedded model]."

This is a critical point of distinction, and I did a little digging this morning to see which plans offered which model. So far, it appears that all of our carriers are going the aggregate deductible route [incorrect: please see update below].

This is important because, as Bob noted, the aggregate model requires that the entire family's deductible (usually two or three times the individual) must be met before covered expenses are paid. To take the example of the folks in North Carolina, an aggregate deductible means that either one or both of them must have enough expenses to meet the $12,700 (Bronze plan) family deductible; with separate policies, one might easily satisfy the $6,350 individual deductible and be done with it.

One last note: only one of the carriers' brochures (Anthem) explicitly states this; I had to contact each of the others to find out. I think that's a bit disingenuous on the carriers' part.

UPDATE & CORRECTION (1/17/14): As it turns out, I was initially misinformed about one carrier's "take" on the embedded/aggregate issue and HSA's. Late yesterday afternoon, my Assurant rep called to let me know that his company's HSA-compliant plans do, in fact, use embedded deductibles. As noted above, this can be a very important factor when comparing plans, especially for couples.

Good to know, and Thanks to Assurant's William W. for the heads' up.

Hacktastic!

Yesterday, Bill posted about some of the travails facing Golden Staters trying to muddle through the Medi-Cal/Exchange labyrinth. The troubles don't stop there, however:

"Two months ago, L.A.-based security researcher Kristian Erik Hermansen was signing up for Obamacare via the Covered California site ... critics started calling the main federal Obamacare site a “hacker’s dream” ... Hermansen discovered a vulnerability that would allow someone to take over another person’s account on the California site"

While this is no surprise to anyone who's been paying attention, there's also am more sinister element at play here:

"Hermansen then spoke by phone to the lawyer and a chief security person. “They were not interested in talking about the security issues but about getting the video or any other online mention of the flaw taken down"

See, the problem isn't the wide-open portal, it's the folks trying to alert the folks who run it that there is, in fact, a problem. I'm reminded of a certain Middle East river.

More alarming still, though, is that that it's not just the state folks yelling "burn the witch:" now the FBI has warned Mr Hermansen to zip his lips. That'll sure make the problem go away.

The ObamaTax and Same-sex Spouses

FoIB Jeff M sends us this interesting story

"A Moore County couple claims Blue Cross Blue Shield of North Carolina canceled their coverage because the state doesn't 'recognize' same-sex marriage ... They were married in Washington, D.C. last October and signed up for with the state insurance exchange for family benefits and paid the premium"

Unfortunately for them, North Carolina doesn't recognize same-sex marriage, and Blue Cross abides by the laws of the states in which it's licensed to do business. So the "family" plan has been cancelled, but they are of course eligible to purchase two individual plans.

Although the couple is rather unhappy with the situation ("You just feel stuck, like to feel discriminated against"), one wonders if they've really thought this through:

For example, there is no real advantage to a plan which covers both of them: since it's just two people, there are two deductibles and two sets of co-insurance to satisfy, and there is no multi-life premium break. The only advantage might be the convenience of one bill and one policy number to deal with.

And I wonder if they're aware of the ObamaTax subsidy marriage penalty?

"Any married couple that earns more than 400 percent of the federal poverty level—that is $62,040—for a family of two earns too much for subsidies under Obamacare."

So depending on their incomes they may actually be better off with two different policies. Food for thought.

Health Wonk Review: The half a glass edition

David Williams hosts this week's eclectic roundup of health care policy and polity. Are you a glass half full or half empty sort of person (an engineer would observe that the glass is twice as big as it needs to be)? Well, David has you covered either way.

Medi-Cal? Really??? But...but...but...

I've had at least a half-dozen phone calls over the last week from people whose children ended up involuntary enrolled in Medi-Cal.  They weren't happy.   And, like the similar situation Henry posted recently, Medi-Cal bears an annoying resemblance to the Roach Motel...you can check in, but you can't check out.

The problem stems from different and very liberal qualification levels for children.  In this area, a typical family of four has to have a Modified Adjusted Gross Income (MAGI) of over $62,643 before the kids are allowed onto a regular insurance plan.   For the adults to qualify, the MAGI has to be below $32,499.  There are an awful lot of families sitting between the thresholds.

As far as I know, the only way around it is to go outside the exchange, forgo the Advance Premium Tax Credit (a.k.a. the revokable subsidy) and pay full freight for separate policies for the children.   I'm not sure, though, if having a mixture of policies inside a family - Exchange plans for the adults and Off-Exchange plans for the kids - impacts APTC eligibility for the adults.  Any other suggestions?

Household Size	MAGI Medi-Cal Threshold	MAGI Medi-Cal/CHIP Threshold
	138% Fed Poverty Lvl	266% Fed Poverty Lvl
1	$15,856	$30,563
2	$21,403	$41,256
3	$26,951	$51,949
4	$32,499	$62,643
5	$38.406	$73,336
6	$43,594	$84,029
7	$49,141	$94,722
8	$54,689	$105,415
Each Additional	$5,547	$10,693