Do it yourself Life Insurance

There was an interesting article on NPR regarding life insurance for the Apollo 11 astronauts.  Apparently, traditional life insurance companies were charging such a high premium that the astronauts decided to do something on their own...they signed hundreds of envelopes (aka "covers" to those who collect these things) to be postmarked on the day that launched, stepped on the moon, etc.  They were to be sold if they didn't make it back as a way of supporting their families.  They obviously made it back, but the covers made their way out into the market...they're selling for up to $30K each.

Clever, but begs the question why NASA didn't pay for coverage.  It does seem a bit cheesy.

Fight the Feds, Lose City Hall

We've discussed the concept of "shanda" before; briefly, it's an embarrassing scandal. And it's quite apropos today, as we read about one employer's successful fight against HHS Secretary Shecantbeserious and the shameful way that employer is being treated by the city (some 300 citizens of which he employs):

"The Catholic owners of a Colorado-based business won an injunction recently against implementing an ObamaCare mandate -- only to be denied a proclamation now from the Denver City Council."

Hercules Industries has been doing business in the area for a half century, and was on track for "Good Citizens Award," based on its various community contributions, and for providing "generous employee health care coverage."

That was before the owners found themselves on the wrong end of the convenience items birth control mandate, and thus the PC crowd.

No word yet on whether or not they'll continue to be in a position to offer "great health care coverage" once ObamaCare is fully implemented.

$716 Billion

A billion here, a billion there. Before you know it you are talking about real money.

When is a cut not a cut?

When they say it isn't.

No matter your political leaning, $716 billion is a lot of money. Doesn't matter if you call it a cut or savings.

The $716 billion line gets people pretty riled up. When Ryan delivered it Wednesday, the convention floor roared. The problem is, the claim is flat-out wrong. “The Affordable Care Act doesn’t steal anything from Medicare,” Henry Aaron, a health-care expert at the Brookings Institution, tells me. “It actually improves Medicare’s finances. No matter how you slice it, the Affordable Care Act strengthens medical hospital insurance.”

Business Week, "Obamacare doesn't steal from Medicare", August, 2012

OK, let's take a look at what will happen when Obamacare meets Medicare.

From 2010 to 2019, Obamacare trims payments to providers by $196 billion. They agreed to take a cut because they will get so many new patients, thanks to the individual mandate.

Congress determines how much providers are paid for procedures performed. Medical providers don't get to ratify the cuts. The payment schedule is take it or leave it.

When and where were providers polled about these cuts?

Do grocers that accept food stamps (EBT cards) agree to take a lower price in exchange for having more customers?

I don't think so.

But Congress is telling, not asking, medical providers to accept a lower price in exchange for more customers (patients).

Another $145 billion comes from phasing out overpayments to Medicare Advantage. 

Overpayments?

Congress determines how much they will pay providers and carriers that provide Medicare Advantage coverage.

Each year there are fewer carriers offering fewer Advantage plans to seniors. If future payments to providers are cut, there will be fewer options for seniors.

The spending cuts are in place to keep the system from going bankrupt.

So there really are cuts.

When Medicare payments are cut two things happen. 

Fewer insurance choices and fewer doctors willing to accept new Medicare patients.

The cuts are not without consequence.

For every action there is an equal and opposite reaction.

Math and physics in the same post.

Geeky.

Cavalcade of Risk #165: Call for submissions

Jason Shafrin hosts next week's Cavalcade of Risk - 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).

Thanks!

NB: We're starting to schedule Fall Cav's - click here to grab yours!

Thursday NewsLinks

■ As Isaac continues to pound the Gulf region, at least one insurer has thrown out a lifeline:

"Aetna is making it easier for members affected by Hurricane Isaac to refill prescriptions and behavioral health programs. We are also extending claim and appeal filing times, and helping members who have evacuated find care outside of their homes"

If you're an Aetna health plan member, they've got a list of toll-free numbers available - drop us a line or leave a request in the comments and we'll be happy to pass them along.

■ It's been a while since we've heard anything about the Life Partners fiasco. Now comes word that the folks behind it have been granted their request for "a full evidentiary hearing before a Texas state agency," to begin in September.

Interestingly, it appears that they've been allowed to continue doing business in the meantime. They're supposed to pay a dividend mid-September, but that's currently on hold pending another injunction. And, of course, there's still the on-going Federal case.

Oy, what a mess.

College Sticker Shock [UPDATED & BUMPED]

[Scroll down for update]

College students, and their parents, are getting lumps of coal in their dorm stocking. In addition to rising tuition costs (due mostly to a lackluster economy) it seems that the Obamacare serpent is raising its' ugly head in the form of higher student health insurance premiums.

We have railed against the student health plans on numerous occasions, mostly concerning the lack of comprehensive coverage in the case of a REAL medical emergency.

Simply stated, the plans are fine for most minor medical issues, but major health issues exposes the plans as falling way short in what they pay and even worse. The ticking time bomb inherent in the design means your coverage may expire before you are back to full health.

Many student health insurance plans were granted HHS waivers, but now those waivers are expiring and the cost of health insurance is sky rocketing.

Because of a rule in the Affordable Care Act that lifts caps on policy payoffs, the cheap insurance policies typically healthy students previously got are skyrocketing, some over 1,000 percent. The reason: Without payoff caps, insurance firms are boosting prices to cover their potential losses.

One example: a late July email to incoming students from Guilford College of Greensboro, N.C. revealed a jump from $668 to $1,179, a 75 percent jump. The reason stated: "Our student health insurance policy premium has been substantially increased due to changes required by federal regulations issued on March 16, 2012 under the Affordable Care Act."

Washington Examiner, "College insurance prices soar", August, 2012

Most college students have options, including seeking cover under their parents health insurance policy. More often than not, students would be wise to purchase their own coverage (if they are age 19 or older).

Lower health insurance premiums under Obamacare?

Just another empty campaign promise.

UPDATE

The folks at eHealthinsurance have more detail on the student health insurance fiasco for those who are interested. Should be required reading for registered voters . . .

A recent 2012 provision of the ACA has also expanded coverage for women's and reproductive health care. Beginning on August 1, 2012, all health insurance plans are required to provide broader coverage for women's health services, at no out-of-pocket cost to the enrollee. This includes coverage for most prescription birth control methods. As a result, some religiously-affiliated schools have chosen to drop their school-sponsored plans for the 2012-2013 academic year.

Thanks to Henry Stern for this tip.

Digital insurance?

Here's something you may not have thought about (I know I hadn't): "what happens to all of your online stuff when you die?"

Many (most?) of us have an iTunes library, multiple email accounts, and various social media accounts (Twitter, FaceBook, and the like), even online financial accounts (PayPal, for instance). Some of these (like Amazon or PayPal) may even have a virtual wad of cash sitting in them.

So who "inherits" them once you've gone to that big digital vault in the sky?

Turns out, the answer's not so simple: sure, you can leave a note with your logons and passwords, but will it be found? And do you really want someone updating your FaceBook page after you're gone (although that might be kinda funny)?

These are just some of the issues we face as this digital age begins to mature. One company, called SecureSafe, offers a pretty neat service: it lets "users upload all their documents and passwords to their account, once it is set up and assign the content to beneficiaries." It even includes a "fail-safe" option in case "reports of your death are exaggerated."

One wonders if there isn't an insurance product opportunity in here somewhere...

Medicare - Popular and Successful

Even though the economy continues to limp along in the longest running, most anemic "recovery" in history, the political spin cycle tries to focus the voters on other things. In much the same way as a magician seeks to distract their audience from what is really happening, politicians would rather talk about anything OTHER THAN their track record.

Hence the Medicare debate.

No doubt Medicare is in trouble. It is paying out more in benefits than it takes in via payroll taxes . . . and there is no money in the "trust fund".

In spite of this, some folks tout Medicare as the "most popular and successful" program ever to come out of Washington.

Popular, yes.

Successful, no.

Unless you define success as one that manipulates provider payments to the point of causing most providers to lose money when they treat Medicare beneficiaries and have to cost shift those losses to those with private insurance.

If you define success as a plan that spends more than it takes in, and has no money in reserve for future claims, then Medicare is indeed a resounding success.

But most of us who live on a budget know we cannot spend more than we earn, or accumulate debt that is 7x our annual income and expect this to be sustainable.

Question: What do you call Obamacare's $716 billion cut in Medicare spending during the next decade?

Answer: A good start - and not because seniors don't deserve their Medicare benefits.

The Affordable Care Act (ACA) achieves those spending cuts over 10 years by decreasing payments to Medicare providers. 

Reuters, "Where Medicare could save money", August, 2012

Save money for whom?

The taxpayer?

Yes . . . and no.

If seniors on Medicare are taxpayers then the answer is no. All this solution does is shift the cost of care from the federal government to those who use Medicare services.

Do the folks in DC really think docs and hospitals will voluntarily take a 30% pay cut for the good of the team?

The Reuters article then goes on to compare how much the US spends on health care vs. other countries. That straw man argument is manipulated and meaningless.

It then regurgitates the other ways to save Medicare.

Pay for results, not treatment . . . spend dollars wisely . . . eliminate waste, fraud and abuse  , , , pay hospitals less.

The only argument they offer that can and will reduce the total cost of care is lifestyle changes.

Medicare is a popular program but only an idiot would consider it successful, unless you are wearing beer goggles.

The Myth of the Unbiased Media

Rueters has published an article trying to debunk what they call the Top Six Myths of Medicare by Mark Miller:

“The debate already is generating plenty of claims and counter-claims about what is and is not working- often based on misinformation about how Medicare actually functions today. Solet's take a look at the six biggest myths about Medicare, along with thefacts.”

The “facts” as outlined by Mr. Miller are as believable as Rep. Todd Akin (R-MO) being endorsed by NOW.  Let’s take a look at his Myths and the reality in Medicine today.

Myth 1: MEDICARE COSTS ARE OUT OF CONTROL

This myth assumes that once you agree that the government should be in the business of managing healthcare and that secondly that even though “Medicare spending will soar in the years ahead as the number of seniors grows” it is okay because” its per-capita growth is slower than private health insurance”.  The problem is that my tax dollars do not go to supporting private health insurance, yet a deduction for Medicare is taken out of every one of my paychecks.  Comparing Medicare to private insurance is inappropriate since they operate on different guidelines and financial contributions, i.e. Medicare being mandatory by the government and private being a choice by the consumer (for now).

As to whether or not Medicare costs are out of control, a report by the CBO projects that “The cost of Medicare is expected to nearly double over thecoming decade…. Medicare's spending is expected to increase to $1,058 billionin fiscal 2022 from $565.3 billion in fiscal 2011. The program's annualspending increases—7.6% in fiscal 2011—are expected to slow to 1.3% in fiscal2012 before accelerating to 10.7% in fiscal 2022.”

Finally, let’s go with Mr. Miller’s assumption that Medicare is needed, then let’s look at a true representation of spending of a government agency by comparing it to growth in the economy.  In a report by the Center for American Progress it states that  “{a}lthough Medicare spending perenrollee has grown more slowly than private health care spending for most ofits history, health care spending in general and Medicare in particular havegrown faster than the economy.”

Myth 2: MEDICARE IS GOVERNMENT HEALTHCARE

Mr. Miller reports his fact as “The government funds Medicare, but healthcare delivery is entirely private.”

Mr. Miller argues that since the government does not actually provide the medical care, as in England under the National Health System or here in America as the Veteran’s Administration, it is not government healthcare.  He offers as further proof a quote by Richard Kaplan, a professor at the University Of Illinois College Of Law who specializes in elder law matters:

"The government provides the financing, so it's appropriate to say the government is the health insurance company… But all the doctors, pharmacies, and nursing homes are private. The provider sends a bill - instead of Blue Cross Blue Shield, the federal government writes the check. But you go to whatever hospital you want."

Thus Mr. Kaplan argues that Medicare is not government health insurance due to the right to choose your own hospital.  However, in an article on the BBC reviewed by Dr. Gill Jenkins on Oct. 2010, patients in England were being offered more choice about where they want to be treated.

So, like England, the US government offers choices of where a patient can go to be treated and then pays the doctor for that treatment.  So in going back to Mr. Miller’s “fact,” what is the difference between Medicare and other government healthcare?

Finally, to argue that Medicare is a government entity, Medicare was voted into law by the United States Congress and Senate and signed into law by President Lyndon B. Johnson on July 30, 1965.  As a medical practice manager, I am directed by the Center of Medicare and Medicare Services (CMS), a government agency, on how to distribute care, how to bill, and most importantly what I will be paid by the government for treating patients with Medicare.  In all cases the doctor is paid directly by the federal government for services rendered, based on a fee schedule designed by the government. 

Myth 3: OBAMACARE SLASHES $700 BLN FROM MEDICARE

This is my favorite myth of all: how defenders of Obamacare state that a reduction of payment to doctors is not a cut but instead a savings.  First, let’s go back to myth 2, that Medicare is not government healthcare because the government does not provide healthcare, but only pays for it.  Mr. Kaplan even confirms that Medicare is an insurance company.  Now, the purpose of any insurance company is to pay doctors for medical treatment performed on their beneficiaries.  If what the insurance company reimburses, i.e. pays, a doctor is too low, then the doctor will not see patients under that insurance.  If Medicare does cut reimbursements, i.e. pay, to doctors by $700 billion over 10 years, reducing an already meager payment to even less, then how many doctors will continue to provide treatment to Medicare patients? Not Many.

Mr. Miller reports that “Obamacare does cut $700 billion in Medicare spending over a 10-year period. But the cuts are adjustments in payments to Medicare providers, which are mostly meaningless to patients.” (emphasis added)  Really? When doctors begin dropping patients then these cuts will become very meaningful.

Myth 4:  DOCTORS WILL NOT ACCEPT MEDICARE BECAUSE OF ALL THESE CUTS

Please re-read  answer to Myth 3 while I laugh hysterically.

Mr. Miller reports that “Most Medicare patients do not have trouble finding doctors who will see them.”  What he neglects to recognize is that Medicare patients are finding doctors under the current fee schedule, but doctors have already reported that any cuts to the Medicare Fee Schedule will result in them dropping patients.  Thus he cannot extrapolate circumstances in the future based on current conditions.

Myth 5: THE WEALTHY ARE GETTING A FREE RIDE

Mr. Miller reports joyfully that those individuals who earn more money have the honor of paying more to Medicare.  Why should the amount of one’s income affect how much an individual pays to Medicare?  As a medical practice manager, I am not allowed to discriminate in health care to a person by income, why does the government discriminate based on income for a service that pays equally for all individuals across the board? 

Medicare is defined on the government website as “the federal healthinsurance program for people who are age 65 or older, certain younger peoplewith disabilities, and people with End-Stage Renal Disease (permanent kidneyfailure requiring dialysis or a transplant, sometimes called ESRD).”  The definition does not include the words “of a certain income” or even “rich” or “poor;” only people age 65 or older.

Never fear, to ensure that Medicare does stay funded Mr. Miller points out that “Wealthy Americans - of all ages - also will start paying a new 3.8 percent Medicare contribution tax on unearned income. The tax affects individuals with more than $200,000 in modified adjusted gross income (MAGI), and married couples filing jointly with more than $250,000 of MAGI.” 

Myth 6: RISING LONGEVITY WILL SINK MEDICARE

So let me get this straight: health care insurance designed for individuals age 65 or older, entering a stage of life when more health care is needed and health care is more expensive and when more people in America are turning 65 and living longer, as a result of better medical care, will not affect Medicare?  Really??

The average life expectancy of an American today is 78.5 years, thus a person will be on Medicare for an average of 13 years.  Beginning in 2011 the first boomers turned 65 and for the next 18 years 10,000 baby boomers will become eligible for Medicare every day.  The current structure of Medicare is unsustainable under these facts. 

Not to worry though, because as Mr. Miller points out, “It is true that people are living longer, and Medicare's eligibility age is fixed for everyone at 65. But that does not mean Medicare costs are rising as a result. That is because nursing homes, which are the biggest area of expense incurred in advanced age, are not covered under Medicare.”

Living expenses are not covered, but medical expenses provided by visiting doctors are covered and paid for by Medicare. Thus regardless of where these old people are living, they will still need to be treated by doctors, who will need to be paid.

Conclusion:

Mr. Miller’s "myths" are, in fact, facts.  Medicare is costly, cuts to doctors will result in doctors closing doors to Medicare patients and the onslaught of baby boomers will crush the system.  I understand that for supporters of Medicare and Obamacare, the reality is difficult to swallow, but the reality is that Medicare is a doomed social experiment.  Since this is difficult to accept, they resort to playing the game of if you repeat a lie often enough and loud enough then maybe people will begin to believe it, even if, as in this case, it is laughable.

Disability trends '12

The Council for Disability Awareness (CDA) has just published its 2012 Long Term Disability Claims Review, an annual study which analyzes disability claims as reported by CDA member companies. The study comprises stats from 2007 through 2011.

Here are some examples:

■ In 2011, CDA member companies paid out over $9 billion in claims, surpassing 2010 totals by 2%

■ Not surprisingly to us, 43% of participating companies reported increased claim incidence from 2010 to 2011; most, but not all, companies continue to believe the economic environment is a factor.

■ Much as we saw last year, the total number of disabled workers currently receiving SSDI payments continues to escalate. At the same time, unemployment remains at historic levels, which means fewer folks actually paying in to the system.

Marmite vs MRSA

Released 30 years ago, the song Land Down Under included this memorable line:

"Buying bread from a man in Brussels
He was six foot four and full of muscle
I said, "Do you speak-a my language?" 
He just smiled and gave me a vegemite sandwich"

Well, its cousin, Marmite, is in the news today, for a very good reason:

"An ingredient in the savoury spread could help doctors defeat MRSA by massively boosting the body’s defences against the deadly bacteria."

Turns out, Marmite (made primarily from yeast extract) is especially rich in B vitamins, including niacin, which scientists believe "can bolster the body against staphylococcus bacteria." Now, this doesn't meant that we should all begin mega-dosing on niacin (or snarfing down Marmite). For one thing, too much niacin can cause liver problems and increased uric acid levels (which can lead to gout).

Pass me a biscuit, please.

College health plans taking off

And not in a good way. We've long noted that these plans are mediocre (at best) and overpriced to boot. Now comes word from FoIB Jeff M that another college is set to bring its premiums in line with the train-wreck's requirements:

"Guilford College in North Carolina is poised to raise the prices they charge students for health insurance by 75 percent as a direct result of the implementation of [ObamaCare] ... There is no reason why it has gone up except the requirements of the new law have forced it to go up. That is the whole story.”

Of course, some (many?) students will be eligible to stay on their folks' health plan (assuming they have one), but this is just another example of how the promise of lower premiums was never realistic.

MVNHS©: It's for the chillun' (or maybe not)

The Much Vaunted National Health Service©, not content with killing off hospital-bound victims patients, has set its sights a bit lower:

"[MVNHS©] won't pay for child cancer treatment that 'cuts deaths by 25% - Some British parents are taking their children to the US to receive a three-drug treatment"

Question: Why does President Obama hate British children?

The Brits are "refusing to fund a treatment for one of the most common cancers suffered by children." That's actually a bit misleading: under a nationalized health care scheme, "refusing to pay" means "denying treatment to." It's a terrifically (or horrifically, depending on one's perspective) efficient means of rationing care. And, of course, it's exactly how ObamaCare is designed to work.

Oh well, it's just kids, right?

MLR means More Ludicrous Recalculating

Benefits Guy blogger (and FoIB) Patrick P reports that it’s going to cost one of his clients more in payroll updates and accounting fees than the value of the MLR rebate they actually received.

Here's a taste:

"Taking the Arizona employee we were able to come up with the following calculation of his premium rebate:  Total rebate is $17.85.  Through the end of August they will have already had 18 pay runs of the 26 total.  With 8 remaining pay runs it works out to the employee having a reduction in insurance premium contributions of $2.23 per pay."

Read the whole thing to see how ridiculous the process turns out to be.

Doctor Spin

"Don't vote Republican. They will take away your Medicare."

Really?

Do you mean like Medicare Advantage plans? 

More than a quarter of the 50 million beneficiaries receive coverage through private Medicare Advantage plans, mostly health maintenance organizations, and Medicare’s drug benefits are delivered exclusively by private insurers, subsidized by the government.NY Times, Private Medicare plans find success, August, 2012

Those who claim the Paul Ryan plan will eliminate Medicare either have no idea what they are talking about, or they know exactly what they are saying and just want to scare you with a lie.

The CURRENT Medicare system offers you a choice.

The Ryan plan does the same thing, but hopes to expand options by allowing private insurance carriers to expand the current offerings.

Why do Democrats say that Mr. Romney and Mr. Ryan would “end Medicare as we know it,” even as private plans have helped hold down costs and have satisfied most beneficiaries?

In the past, federal and state officials say, insurers used improper hard-sell tactics to persuade Medicare beneficiaries to sign up for private health plans. Also, some insurers offered benefits that were likely to attract healthy retirees and discouraged the enrollment of those with costly chronic conditions.

Sounds like consumer choice to me.

Choice is a good thing. Right?

“There is no strong evidence that competition among health plans is a powerful lever to generate a lot of savings,” said Marsha R. Gold, a senior fellow at Mathematica Policy Research who has been studying private plans in Medicare for more than two decades.

But yet, Obamacare proposes to introduce competition to reduce the cost of health insurance. At least that is what they say . . .

A premise of the new law (Obamacare) is that consumers will benefit from more competition. The law will set up markets, known as exchanges, where people under 65 can shop for private insurance and get subsidies to help pay for it. Massachusetts set up such an exchange under a 2006 law that Mr. Romney championed when he was governor. Mr. Ryan’s proposal would establish a similar exchange for Medicare.

So exchanges are a good thing when Obama is behind it but a bad thing if Paul Ryan wants it.

ObamaCare's Hinkle Wrinkle

One supposes that this could be quite humorous, if the stakes weren't so darned high:

"As critics warned [ObamaCrap] will not “bend the cost curve downward” as promised. To the contrary, a June report ... predicts that national health spending through 2021 will continue to grow at a considerably faster clip than Gross Domestic Product."

Yeah, yeah, those whingers are always carping on PresBo's greatest legislative achievement.

Wait, what?

"...To the contrary, a June report by the Centers for Medicare and Medicaid..."

Hardly a bastion of right wing activism, CMMS is charged with actually implementing the bill we had to pass to learn what's in it. And they see what we've been saying for quite some time: ObamaCrap does nothing to lower the cost of health care delivery. It's basic economics hard at work: offer something for nothing, and you get a lot of takers.

And this growth is quite lopsided:

"Private health insurance spending will rise about 8 percent. Medicaid spending will grow about 20 percent. In a few years, government will account for 50 cents of every health care dollar spent in America." [emphasis added]

That last bit bears repeating: "In a few years, government will account for 50 cents of every health care dollar spent in America."

Currently, that number is about 41%. That's a 25% increase in federal health care spending in a very short time span.

And from where do these dollars come? Regular readers already know.

Actos Warning

From Consumer Reports:

"The Food and Drug Administration approved generic versions of the type 2 diabetes medication Actos (pioglitazone) last week. But we say skip Actos as both a generic and brand-name medication, unless other options have not worked. Pioglitazone can cause serious side effects, such as an increased risk of heart failure, bone fractures, and bladder cancer. Other medications to treat diabetes, such as metformin, are a better first choice.

For those who must take it, only three manufacturers are currently allowed to make the generic formulations of Actos for the next six months, so the price will likely stick close to the brand-name version, which can run an average of $377 for a prescription, if you pay the retail price. Once more manufacturers are approved to produce it, the price of generic Actos will begin to drop.

Bottom Line: Our medical advisers say that people with diabetes should use pioglitazone, generic or brand-name Actos, only as a last resort. If you're on the drug, ask your doctor if it's absolutely necessary and if you should switch to another drug. Our Consumer Reports Best Buy Drug recommendation is the drug metformin, either alone or with glipizide or glimepiride, for most people with type 2 diabetes, combined with a healthy diet, regular exercise, and losing excess weight. Those three generic medications can be usually found on the discount $4 generic drug lists at the pharmacy of most chain stores such as Kroger, Target and Walmart, and may be purchased for as little as $10 for a three-month supply."

Consumer Reports, Avoid generic Actos, August 2012

Medicare Trigger

From the Baltimore Sun:

"With all the political drama going on concerning Medicare from both parties, it baffles me that President Barack Obama has ignored his legal responsibilities regarding the "Medicare trigger." That trigger (covered under Section 1105 of Title 31 of the U.S. Code) is a forecast from the Medicare trustees that general revenues will be required for 45 percent or more of the program's outlays within a seven-year period, which signals that Medicare is financially unsustainable.

The president is required to respond to Congress, but though the Medicare trustees issued a warning in 2009, 2010, 2011, and again this spring, President Obama has ignored the law each year and failed to submit the required budgetary legislation to Congress."

Baltimore Sun, Obama ignores Medicare's plight, August 2012

ObamaCare goes to college (a double whammy)

While I've never understood the connection between health care and college loans, they are nevertheless an integral part of ObamaCare. And just as that train-wreck has greatly depleted Medicare, it also threatens student loans in general, and how the 58 states will have to balance college needs and folks on Medicaid:

"Parents and students facing sky-high state-run college tuitions aren't likely to be thinking about ObamaCare ... ObamaCare relies heavily on Medicaid — the federal/state program that provides health insurance for the poor — to expand coverage."

Okay, we get it, poor folks need health care, too. But what's that got to do with the price of tomatoes, or college?

Just this:

"Medicaid is already swallowing up state budgets, forcing states to cut back on everything else, especially support for two- and four-year public colleges."

As ObamaCare forces more and more folks out of the private insurance market, and onto Medicaid, something's gotta give. And that something, it turns out, is young peoples' dreams:

"As the Medicaid mandate rises, the educational funding declines. That is passed on to universities and they raise tuition in order to make up for it."

That's why we've always called mandates "hidden taxes:" there are no free lunches. Someone has to pay for health care. And since SCOTUS has green-lighted the individual mandate, the problem is exacerbated. That is, buying health insurance is now the law, but going to college is a choice. The former trumps the latter every time.

But the problem with Medicaid doesn't stop there: in addition to "regular" health care, the program is also expected to pick up the tab for long term care (aka nursing home costs). The problem is that there are only so many dollars available, so states will be looking at individuals to pick up more and more of the tab. We saw this with the new Partnership Plans - the government implicitly recognized that folks need to fend for themselves, and so it waved a big carrot. But the stick isn't far behind:

"Some 29 states currently have laws making adult children responsible for their parents if their parents can't afford to take care of themselves."

This is a completely separate issue from the so-called "look-back" provisions, which merely dissuaded folks from transferring assets to their kids. These "filial responsibility" laws (which, as the article notes, are nothing new) require even more blood and treasure from kids who may have already reached a breaking point paying off college loans, which are inflated because the cost of that education keeps going up (helped in no small part - as noted above - by ObamaCare).

Seems like this vicious cycle is just getting revved up.

[Hat Tip: FoIB Brian D]

ObamaCare 2013: HSA/FSA Update

As we round the corner and head into 2014, the IRS has issued new minimum deductible guidelines for those of us still clinging bitterly to our (soon to be gone) HSAs. For 2013, the minimum deductible for tax-qualified HDHP plans will be $1,250 per person, or $2,500 per family (or: $2,500 for "embedded deductible" plans).

Please consult your insurance professional if you don't know what an embedded deductible is.

Oh, and for folks participating in healthcare Flexible Spending Accounts (FSAs), your maximum allowable contribution for next year will be $2500. This new requirement applies to all FSA plans whose taxable years begin after Dec. 31 of this year.

It won't apply, though, to FSAs with plan years that begin before 2013. For example, if your company has a July 1 plan year, then the new cap doesn't apply until next July 1rst.

Confusing enough for you?

If so, then you need to get with your FSA/HSA/HRA guru post-haste. I know I'll be speaking with mine.

[Hat Tip: UHC]

Doctor App

FoIB Holly R tips us to the newest iWrinkle:

"Before long, your doctor may be telling you to download two apps and call her in the morning ...  Soon they may also act as medical devices, helping patients monitor their heart rate or manage their diabetes, and be paid for by insurance."

That last bit may be misleading: good luck with that claim. They may be eligible for reimbursement from an HSA/HRA/FSA (though I wouldn't count in it).

Still, the basic idea seems sound: after all, diabetics routinely use small, portable devices to check A1c levels. On the other hand, there's still the unsettled issue of who actually owns the data being transmitted.

Ooops, gotta run: phone's ringin'.

Mandating Tips

Well, it's about time we get a male-centric mandate. Regular readers may recall our exposé of the double-standard regarding breast cancer screenings:

"Raymond Johnson, a 26 year old with no health coverage, just found out two horrible things:

First, that he has breast cancer.

And second, that even though there's a special Medicaid program for breast cancer victims, he's not eligible. That's right, the obscenely mis-named "Breast and Cervical Cancer Prevention and Treatment Act" is available only to those without the Y chromosome."

As we noted at the time, HHS Secretary Shecantbeserious also mandated that health insurance plans must cover women's (although not men's) wellness visits, as well as STD screenings and a host of other "freebies." None of these were applicable to men, which make up, at last estimate, something around half of those actually paying for these benefits.

Now comes word that circumcision is, um, under the knife:

"But a new study published Monday by health economists with the Johns Hopkins University School of Medicine ... says that if circumcision rates were to decline to the 10 percent level currently seen in Western Europe, it could add up to $505 million annually in direct health care costs."

Hey, a half a billion dollars is a lot of scratch, even by DC standards. So it should come as no surprise that there's growing support for mandating circumcision coverage (for men).

Mandates are, of course, another hidden tax (in the form of increased premiums), but this is one who's time may have come.

[Hat Tip: FoIB Holly R]

Nick's Story (Reprised)

[This post was originally published on March 16, 2009. We are re-posting it as our contribution to today's Life Insurance Movement. HGS]

My father never was the picture of health. He smoked, he drank, and he ate things that most people wouldn’t touch unless they had to break into the box marked “Survival Kit - Last Option.” Vienna sausage does not a meal make. He constantly had some manner of cold, cough, or other malady, and we never really thought much of it. Normally, he would shuffle around for a few days, then get back to life. So, at Thanksgiving 2006 we didn’t really think anything of it when Chock developed a nagging cough that just wouldn’t go away.

By Christmas 2006, it still hadn’t gone away. He was also beginning to have some balance issues, some troubles with his memory, and was tripping over words. He didn’t want to see a doctor - half because he didn’t want to believe something could be wrong, and half because he just wasn’t the type to go to see someone until limbs were actively falling off.

He got progressively worse over the next few months and eventually couldn’t deny the fact that he truly needed to go see a doctor. It was May 9th, 2007 - my parents’ 32nd wedding anniversary - when he was formally diagnosed with Stage IV cancer (brain, lung, bone, blood, and colon). He started aggressive chemotherapy on May 13th, his 71st birthday.

On July 19th, 2007, at 12:40 in the morning, my father died. Very shortly thereafter, we realized that we had some serious problems.

You see, before Chock passed away, he had had a brain tumor the size of a baseball. His mental faculties were somewhat impaired, to say the least, and so some of his last financial decisions were...less than rational. Just before he passed, in one of his last moments of lucidity, he told my mother “I’m sorry, Jo. But I sure am glad I’m not going to have to be the one who has to clean up the mess I made.”

And holy crap, was he right. When Chock died, the bills hit us hard. Chemo had cost $8,000 a round. The cost of his two-month hospital stay in a private room was astronomical. Numerous tests, multiple labs, home hospice care, none of it was cheap. The $1,000 a month my family was paying for his “insurance” had drained us as well - the only thing that “defined benefit” plan defined was exactly what position we were expected to take as we were screwed. Add to that his already extant debt, and we were in deep.

Did I mention that this was all piled on top of my mother’s medical bills? She’s been handicapped for fifteen years with Meinere’s disease. Twenty-three surgeries haven’t been cheap - especially when several of them were excluded from coverage as “experimental procedures.”

Now, let’s make matters worse. Before Chock passed away, he told us that he had a $250,000 life insurance policy through New York Life. Well, that was partly true - at one time, yes, he had life insurance through NYL. The tumor that was altering his speech was also mixing up the chronological order of his memories. Tracing the money flow would reveal that the policy had lapsed years and years ago when he had pulled all the cash value out.

I always wondered how he had been able to afford that boat.

The average American family declares bankruptcy at $11,000-ish of debt. We were in to the tune of $167,000 (before funeral costs) with no life insurance coming.

If you’ll recall, mid-2007 was around the time the real estate market had really settled into its free-fall. My mother’s only option was to sell the house that she and my father had lived in together for thirty-two years. There was no such thing as a quick sell in that market, and the process was torturous. We couldn’t afford storage, and we had to clean out a massive amount of my father’s things in a short period of time to prepare the house for sale. I drove twelve hours round-trip every weekend for months, coming home from college to help my mother throw out over thirty years of memories. It was easily as depressing as sitting next to my father’s bed while he died.

Though we watched the money as closely as possible, there was only so much of it - and it was running out. By the time the house sold, my mother would later tell me, she had about thirty days of cash left before she would have had to declare bankruptcy. And when it sold, it did so for $75,000 under its appraised value.

Now, sad though that story was, it has a happier ending than most. My mother lives in Alabama now, back where she grew up. Between her disability, teacher retirement, and social security, she has enough to get by each month and put some back in savings. And I have a new career path than the one I originally envisioned. I sell insurance now, and I know that there’s not a single person that I work with who will ever find themselves in the situation that my family was in. I’m saving the world, one policy at a time.

This story has several morals worth remembering:

Don’t count on the ability to sell your assets in the event of a death in the family to float you. It might not come through in time, it’s painful, and you’re not going to be in any sort of position to get yourself in a positive bargaining position.

Life insurance does more than provide a bit of money upon a death. It allows the survivors time to grieve in dignity instead of spending sleepless nights throwing out years of accumulated memories.

That $2000 prescription drug cap might not seem like such a big deal when you’re taking a z-pack once every two years for a sinus infection. It’s a huge deal when you’re staring down $8,000 a day of chemotherapy drugs.

Plan for the worst when things are good. You’re rational, you’re calm, and you can think clearly. If you wait until the crap has already hit the fan, you’re going to end up scrambling - like we did.

Don’t just buy insurance. Hire an agent, and make it someone you trust. Talk to them. There are a few insurance agents that give us all a bad name, but I promise, some of us truly do care about keeping your family safe.

Nick Perry