Georgia Health Insurance 411

Archive for October, 2009

Read the fine print. That’s what most of us have been taught. The big print gives, the small print takes away.

The folks at Kaiser Health News found this for us.

Proponents of the Senate Finance Committee’s health care bill say the legislation will limit the amount that lower- and middle-income people must pay for health insurance to a maximum of 12 percent of their incomes.

But there’s a catch: The fine print shows that, over time, the premium costs could rise well beyond those caps. That’s because the cost of coverage would shift from a percentage of income to a percentage of the premium, no matter how high the premiums go.

That last line is revealing.  “No matter how high premiums go”.

Seems like we are back where we started.

But wait, there’s more!

KHN also found this in the fine print.

As your premiums rise so does the cost of medical equipment.

The Medical Device Manufacturers Association is starting a $200,000 radio and print ad campaign aimed at stopping Congress from imposing more than $40 billion in taxes on their goods

Now, $40 billion may not seem like a lot to Washington types but we are the ones paying for it.

For a little diversion, the ARRA – COBRA benefit whereby employers are required to pay 65% of COBRA premiums for up to 9 months is about to expire. Kaiser Health News delivers the bad news on the REAL cost of COBRA.

“The government’s effort to help workers keep health benefits after they lose a job could wind up costing WellPoint Inc. and other insurers dearly in the fourth quarter. Indianapolis-based WellPoint said Wednesday it expects a spike in claims from a money-draining customer segment that includes people who continue their employer-sponsored insurance coverage under the federal law known as COBRA. Many insurers already face declining enrollment and rising costs related to swine flu cases. The expected jump in COBRA-related claims would make a bad situation worse.”

“All these factors likely will contribute to future rate increases. Insurers normally lose money on COBRA enrollment because the people who keep their coverage generally do so because they need it for ongoing treatments or illness. WellPoint, for instance, spends between $1.50 and $2 on claims for every dollar it collects in premiums.

Spending $2 for every dollar they take in is what Medicare does. Problem is, Wellpoint and other carriers don’t have the ability to tax our children and grandchildren to pay for the loss.

The more the government meddles in the free market, the worse things become for all of us.

Smaller cars, bigger health insurance, Poppa Washington.

Pricewaterhouse Coopers took a lot of flack over their cost study that proved health insurance premiums will RISE if the Baucus version of Obamacare is passed. Careful observers will note that the White House and politicians did not dispute the findings that PREMIUMS will rise, but rather said the cost will go down for individuals and families once the taxpayer subsidies are factored in.

Playing word games.

Under proposed health insurance reform, premiums MUST rise to account for the additional risk the carriers take on by insuring anyone with a check in hand, regardless of their medical history. Add in the other benefit mandates such as mental health parity and premiums will increase significantly.

Now the WSJ Blog reports that Wellpoint (Blue Cross) has done their own study using their own internal data, not some made up junk from the CBO.

At the request of Congressional delegations worried about their constituents—call it a public service—WellPoint mined its own actuarial data to model ObamaCare in the 14 states where it runs Blue Cross plans. The study therefore takes into account market and demographic differences that other industry studies have not, such as the one from the trade group America’s Health Insurance Plans, which looked at aggregate national trends.

In all of the 14 states WellPoint scrutinized, ObamaCare would drive up premiums for the small businesses and individuals who are most of WellPoint’s customers.

Of course some will argue, if premiums increase that is good for the health insurance companies.

But not necessarily so.

If premiums are already unaffordable for some, how many more will have to bail on health insurance when premiums immediately go up to account for Obamacare?

Rather than relying on taxpayer funded subsidies, why not address the underlying causes that inflate premiums? Allowing carriers to offer plans free of state mandates will result in an immediate 20 – 30% drop in premium levels. In the half a dozen states where guaranteed issue (no underwriting for pre-existing medical conditions) is mandated, dropping that mandate will save another 30% or so.

Not even two hours after Wellpoint had presented its materials on the Hill, Democrats were already trashing it—which, considering that it runs to some 238 pages and took weeks to prepare, must have required remarkable powers of digestion and analysis.

Evelyn Wood would be so proud . . .

Sounds like Congress and the Obama House are criticizing something they have not read. Of course most will admit they never read the legislation they vote on so why should this be any different?

What distinguishes the Wellpoint study is its detailed rigor. Take Ohio, where a young, healthy 25-year-old living in Columbus can purchase insurance from WellPoint today for about $52 per month in the individual market. WellPoint’s actuaries calculate the bill will rise to $79 because Democrats are going to require it to issue policies to anyone who applies, even if they’ve waited until they’re sick to buy insurance. Then they’ll also require the company to charge everyone nearly the same rate, bringing the premium to $134. Add in an extra $17, since Democrats will require higher benefit levels, and a share of the new health industry taxes ($6), and monthly premiums have risen to $157, a 199% boost.

Meanwhile, a 40-year-old husband and wife with two kids would see their premiums jump by 122%—to $737 from $332—while a small business with eight employees in Franklin County would see premiums climb by 86%. It’s true that the family or the individual might qualify for subsidies if their incomes are low enough, but the business wouldn’t qualify under the Senate Finance bill WellPoint examined. And even if there are subsidies, the new costs the bill creates don’t vaporize. They’re merely transferred to taxpayers nationwide—or financed with deficits, which will be financed eventually with higher taxes.

Oops!

Higher premiums, lower “costs” (due to subsidies), higher taxes.

Sounds like a plan.

The story is largely the same from state to state, though the increases are smaller in the few states that have already adopted the same mandates and regulations that Democrats want to impose on all states. For the average small employer in high-cost New York, for instance, premiums would only rise by 6%. But they’d shoot up by 94% for the same employer in Indianapolis, 91% in St. Louis and 53% in Milwaukee.

Note the comment that folks in NY, who already have sky high premiums due to Obamacare type mandates, will actually catch a break. That’s good to know.

Democrats have been selling health care as one huge free lunch in which everyone gets better insurance while paying less. But the policy facts simply don’t add up, and Democrats are attacking WellPoint because they don’t want anyone to understand what their health-care schemes will mean in practice. Democrats know that if the public is given the facts and the time to consider them, Americans might demand that Democrats stop pushing the country off this cliff and start all over.

So now you know.

Question is, what will you do about it?

Smaller cars, bigger health insurance premiums, Poppa Washington.

Need a casket or urn? Check out Wal-Mart. Seriously.

Yahoo News fills in the details.

“Several online retailers offer this category on their sites,” spokesman Ravi Jariwala wrote in an e-mail. “We are simply conducting a limited beta test to understand customer response.”

But Obadiah said it is not simply a test. He said more than 200 Star Legacy products, including pet urns and memorial jewelry, and eventually about two dozen caskets, will be sold at walmart.com. The company also supplies similar types of products to online retailer Overstock.com and urns to CostCo’s Web site.

Overstock?

Have death rates slowed down? How does one become overstocked on caskets?

Part of the business model is to get people to plan ahead: Walmart.com is allowing people to pay for the caskets over a period of 12 months for no interest.

The move gives more power to consumers and helps them avoid high mark-ups on caskets, which can often be several hundred percent, said R. Brian Burkhardt, a funeral director who blogs as “Your Funeral Guy.”

What happens if the model I order is sold out or discontinued when I need it? Is this like restaurant menu’s? No substitutions allowed?

What will they think of next?

Psst. Wanna sell your vote? Support for Obamacare is for sale. Yeah, I know. Shocking!

Here are just a few examples.

That much talked about tax on “Cadillac” plans?

According to the Washington Examiner, if you carry a union card, you get a free pass.

Baucus is also weighing a tax based on the value of health care benefits that exceed a yet-to-be determined cap. A tax on benefits that exceed the cap by a mere $3,000 could amount to $750 in taxes annually for a worker who earns as little as $34,000, say experts.

But those union members serving under collective bargaining agreements would not be subjected to the tax, according to proposals under discussion.

Union workers enjoy some of the most extensive and costliest health benefits, and union officials complained their members would be unfairly burdened by a health care tax because their contracts cannot be changed quickly enough to avoid it.

Well you certainly don’t want to tick off the unions. Remember what happened to Jimmy Hoffa?

But unions are the only ones getting sweetheart deals. It seems some Congressmen have their hand in the til as well.

The Examiner repeats what was reported earlier about Sen. Reid who is hanging on by his fingernails hoping to be re-elected next year. Not only did Harry cut a deal to exempt citizens of Nevada from paying the toll on Medicaid and SCHIP funding for the next 5 years, but others got their share of pork pie as well.

The states (which are already bleeding red ink) will have to pony up a projected $37 billion in new taxes to cover their share of Obamacare. This has riled Democrat and Republican governors alike.

But no fear. Some states will get a free pass at our expense.

Majority Leader, Sen. Harry Reid (D-NV) has cut a deal to exempt Nevada from these costs for the next five years. Generous Mr. Reid saw to it that Oregon, Rhode Island and Michigan got the same exclusion, using a formula known only to the Nevada Senator, because “they are suffering more than most.”

Oh, come on Harry. Tell us your secret formula.

Health-care “reform” is good, smart and necessary, so long as it isn’t fully applied to the states of the senators who are pushing it. The Democrats’ growing problem is that somebody is ultimately going to have to pay, and Mr. Reid’s bad example has given every one the same idea. “If Colorado has a fair claim on being treated the same way Nevada has been, of course we’re going to ask to have that kind of treatment,” promised Sen. Mark Udall, upon news of the Reid deal.

Depending on how many votes they have to buy, it might be that no one has to pay. Wouldn’t that be nice?

Just more stupid government tricks.

Smaller cars, bigger health insurance, Poppa Washington.

Do you wonder how Obamacare will handle uninsurable individuals? The Baucus plan will establish a high risk pool to

(A) provide to all eligible individuals health insurance coverage (or comparable coverage) that does not impose any preexisting condition exclusion with respect to such coverage for all eligible individuals;

This can be found on page 38 of the Baucus bill. Over the next few pages are a few surprises . . .

INSUFFICIENT FUNDS.—If the Secretary estimates for any fiscal year that the aggregate amounts available for payment of expenses of the high risk pool will be less than the amount of the expenses, the Secretary shall make such adjustments as are necessary to eliminate such deficit, including reducing benefits, increasing premiums, or establishing waiting lists.

That little tidbit appears on pages 39 – 40.

So if the Secretary, the one who administers your high risk health insurance, runs out of money it is his/her responsibility to correct the problem by reducing your benefits, increasing your premiums or establishing waiting periods (presumably for new entrants although this is not clear).

Change you can believe in.

Mr. Rogers comments on Obamacare. Today’s lesson is brought to you by the letters Y and S. (You’re screwed).

The first time someone asked if I had ever Googled myself I politely told them it was none of their business.

Then they explained what Googling oneself really is.

Oh . . .

I haven’t Googled myself in a while so I decided to do so this morning.

Wow! What a rush.

1,580,000 hits in .20 seconds.

Not all of them are me but so what? The first 7 listings on page one of Google were me.

I have no idea what, if anything, any of this means but it’s a great way to end the week.

Give it a try. Google yourself. No one is looking and no one has to know what you are doing.

To fund Obamacare, the government pledges to “save or create” at least $100 billion each year by eliminating fraud and abuse in the Medicare system. Some estimates put the savings as high as 35%.

And these are the same folks who want to control ALL health care funding for EVERYONE.

Fascinating.

The same folks who ran out of money in 2 weeks under the Cars for Clunkers program are now admitting the Cash for New Home Buyers tax credit may have sprung a few leaks.

To spur home sales, Congress decided to provide a tax credit of $8,000 for first time home buyers. Like Cars for Clunkers, the program has performed as promised by spurring home sales over the last few months. This is good news for realtor’s, lenders and of course the folks who now are proud owners of a new home courtesy of the American taxpayer.

But Houston, we have a problem.

According to USA Today there are a few folks who applied for the tax credit that were not entitled to the credit.

Treasury Inspector General for Tax Administration J. Russell George told a House panel that more than 19,000 people filed 2008 tax returns claiming the credit for homes they had not yet purchased. George said his office had identified another $500 million in claims, by some 74,000 taxpayers, where there were indications of prior home ownership.

He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old.

That’s 93,580 people who applied for the credit but weren’t entitled to it. At $8,000 each that’s more than $700 million in bogus tax credits.

Sounds like fraud and abuse to me.

About 1.4 million tax returns have been filed to take advantage of the credit at a cost to the government of about $10 billion.

My calculator indicates roughly 1 out of every 14 returns were fraudulent.

Our friends in Washington are not making a good case for extending the public trust.

Medicare fraud and abuse is 10 – 35% of the total amount spent. The housing tax credit is in its’ infancy and they have already identified at least 7% of returns are fraudulent.

What’s wrong with this picture?

Of all the finger wagging and charges levied against the health insurance industry, I don’t recall one politician charging the industry suffers from waste due to fraud and abuse.

Wonder why?

There is criticism about profits which average 3 – 4% of total premiums and about carriers refusing to issue coverage to people with serious medical problems, but nothing about fraud.

Change you can believe in.

Unlike Cheers, where everyone knows your name, figuring out the health care game is becoming more tricky. No one really knows how the game is played, and the ones that do aren’t getting their point across.

In the midst of Obamacare, Kennedycare (remember him?), Baucus bills, and so forth, everyone claims to have the answer. Truth is, they don’t.

The politicians promise to make health care and health insurance more affordable. Problem is, the way they are going about it won’t accomplish either. So now both sides, politicians and health insurance companies, are pointing fingers saying the other side lied.

If either side really knows the truth, they aren’t telling it.

But the folks at Reason.com have as good a handle on the issue as anyone. Here are some excerpts.

“Every time we get close to passing reform, the insurance companies produce these phony studies as a prescription and say, ‘Take one of these, and call us in a decade,’” declared the president. “Well, not this time.”

Who say’s it’s phony?

The prez.

If the studies had in fact supported what he and Congress are saying, that covering sick people without regard to the cost of treating their condition can be done for the same or less money than is charged now, he wouldn’t be wagging his finger at the health insurance companies. This is like Billy Clinton wagging his finger and saying “I did not have sexual relations with that woman, Ms. Lewinsky.”

Sure, prez, we believed you too.

Forget the studies. Let’s look at this logically.

Currently in all but a handful of states, health insurance companies are allowed to review your medical history and decide if they can afford to insure you or not. This is like the mortgage business in a way.

You fill out paper work, provide supporting documentation that indicates you are a good risk and can indeed pay back the loan, and you get your money.

This is the way business was done before Congress, ACORN and Fannie Mae pushed the banks into making loans to people that did not qualify. We learned our lesson . . . supposedly . . . so now we are back where we started. The idea of giving loans to just anyone didn’t work so now you have to PROVE you can qualify.

Except now the same folks in Washington who thought it was a good idea for banks to loan $400,000 to a panhandler  living on the street now want the insurance companies to give health insurance to people who are also not a good risk. Not only does Washington want the carriers to do this, but they are telling the public their premiums will go down, not up to accomplish this feat.

The president is right that we should always be skeptical of studies that find in favor of the groups that sponsor them. And these two insurance industry-sponsored studies do have their flaws. But the finding that guaranteed issue and community rating mandates increase insurance premium prices has been corroborated by other academic researchers. For example, researchers from MIT, the Brookings Institution, and Brigham Young University reported in a 2008 study published in Forum for Health Economics & Policy that community rating regulations increased premiums for high-deductible policies for individuals by as much as 17 percent and families by as much 33 percent in the nongroup market. In addition, the researchers found that the “guarantee issue regulations that accompany community rating regulations in New Jersey are associated with premium increases of well over 100 percent for individual and family policies.” And as my colleague Peter Suderman recently pointed out, Massachusetts, the one state that combines an individual mandate, community rating, and guaranteed issue, now has the highest premiums for family insurance plans in the country.

Be skeptical, but don’t ignore other studies that were not funded by the industry and done BEFORE health care reform was a gleam in PresBO’s eye.

Ask the folks in Massachusetts how much their premiums declined once health care reform was enacted.

Wag that finger, Barry.

When is a premium increase not a premium increase?

I guess it depends on what your definition of is, is . . .

According to the New England Journal of Medicine, the director of the Office of Management and Budget, Peter Orszag, cites evidence that $830 billion is being spent this year on unnecessary care. That represents about 30 percent of all health care spending. Of course, insurers have a big interest in trying to reduce unnecessary spending, so they hire flocks of administrators to negotiate lower rates and to monitor medical spending charged by doctors and hospital administrators. Government health care programs like Medicare don’t have to negotiate; government agencies just fix prices, which means they fail to combat waste and fraud effectively.

That’s an interesting way of stating it. Medicare doesn’t have to correct waste and fraud, they just dictate what they will pay.

By the way, that 30% figure (which I believe to be exaggerated) is for what is termed “unnecessary care”. Since most people are covered by health insurance, and most people are in a managed care (PPO, HMO, etc.) plan there really isn’t that much that could be considered unnecessary. Health insurance companies are pretty good watchdogs and are quick to refuse payment for care that is not medically necessary.

If you want to understand why health insurance is expensive you have to examine where 85% of the dollars go. That is, look at claims.

A lot of talk is thrown about regarding monopolies, but no one is really talking about monopolies on the health care side.

As hospital mergers produced local monopolies, they were able to increase their prices substantially. “I find that hospitals increase price by roughly 40 percent following the merger of nearby rivals,” Leemore Dafny, an economist at the Kellogg School of Management at Northwestern University concluded in a 2008 study. Insurers with relatively few patients could not bargain effectively with the new local health monopolies, and so dropped out of those markets.

Health insurance companies will do their best to hold down the price paid for services, but in the end, the carriers need the docs and hospitals. Unless carriers can deliver medical providers in their network the carriers have nothing to offer.

“The insurance industry is congenitally weak in bargaining with supply side of the American health sector,” explained Princeton University health economist Uwe Reinhardt on a recent NPR Money Planet segment. Reinhardt believes that insurers largely dance to the fiscal tune whistled by hospitals and physicians.

Medicare on the other hand (as pointed out earlier) doesn’t negotiate, they just state what they will pay on a take it or leave it basis.

I will also disagree with the premise that open competition across state lines will lower the cost of health insurance.

Consumers cannot purchase insurance policies that are not licensed by their state insurance commissions and which do not incorporate all the mandates imposed by those commissions. Congress and the states should open up competition between insurance companies by enabling “regulatory federalism” that would allow individuals and employers to purchase health insurance from other states. As a report from the free-market Cato Institute notes, regulatory federalism would force state insurance commissions to compete among themselves. The result would be that “states that impose unwanted regulatory costs on insurance purchasers would see their residents’ business—and their premium tax revenue—go elsewhere.”

If someone in Georgia wants to purchase a policy from Ohio (a lower premium state), under the current way of doing things that would not be permitted. Premiums are lower in Ohio for a number of reasons but one of those is the cost of health care. Health insurance companies pay less to doctors and hospitals for care in Ohio than in Georgia. If someone from Georgia were to buy an Ohio plan, at Ohio rates, the policy would be significantly under-priced.

For the carrier to offer the OH product in GA they would have to raise rates to reflect the higher cost of care in Georgia. This will wipe out most of the premium differential.

We don’t need more carriers in Georgia to bring costs down. What we need is the ability to offer good major medical plans that don’t have to comply with state mandates.

Speaking of mandates, the various bills put forth in committee in Congress ADD coverage, they don’t take it away. It’s kind of like saying you will get all you can eat at a buffet but only pay dollar menu prices.

Life doesn’t work that way. Except in Washington where you can wag your finger and claim others are lying about what you really did.

Rates for Georgia term life insurance will be increasing. Some plans, such as 30 year term, may no longer be available. This according to Swiss Re.

“While many direct writers have held the line on premiums this year, some leading companies have raised term insurance premiums by as much as 10% to 15%,” Karl and Laster write. “Some have stopped writing long-term business, such as 30-year level term.”

Meanwhile, because of the current capital market turmoil, tools such as reinsurance, insurance-linked securities and letters of credit are either more expensive than they used to be or unavailable, and the crisis also has reduced insurers’ own capital and surplus by about 14%, the analysts write.

Compare rates for Georgia term life insurance here.