Christmas Cookies? What Would Your Boss Say?

The insurance industry and the federal government appear to be at war. They aren’t. Sure, there are times when a Congressman or the President may by vilifying my industry or some CEO is denigrating an entire political party, but these are just words and much of it is for show. As Sam Donaldson once remarked, “This is Washington. Only the amateurs get mad.” The government needs the insurers. And we all need the government.

The government / insurance industry partnership manifests itself in a number of ways. Today we are going to explore WELLNESS.

In my March 23, 2009 post, Protect Me From Myself, I discussed how my industry has been pushing Responsibility. If you would only take better care of yourself, quit smoking, and exercise more, your health care costs would decrease and your insurance might be more reasonable.

Allegedly, 75% of all claims are due to lifestyle. That’s our number and we are sticking to it.

The government has decided to test the theory. Employers are being encouraged to institute Outcome Based Wellness Programs. The employer hires an outside contractor to come in the factory or office, mostly factories, and meet with each employee. The goal of each interview:
Complete a comprehensive health care questionnaire
Record the employee’s height and weight
Take the employee’s blood pressure
Draw blood for comprehensive lab tests

Armed with this information, the wellness company can now coach the employee to quit smoking, lose weight, or better monitor his/her blood pressure. The employer is allowed to set goals for the employees and charge up to 20% more for the company’s health insurance for non-compliance.

One of these contractors, Bravo Wellness, has a helpful DVD that explains the concept. The featured employer set goals for his employees targeting:
Blood Pressure
Cholesterol
Body Mass Index
Smoking Cessation
He penalized the employees who either fell short or chose to not participate.

Programs like this require both the carrot and the stick. Employers are encouraged to incentivize (pay) their workforce to take the initial exam and screenings. People don’t rush to disclose their health information. One contractor told me that the going rate was $300. Armed with this info, the employer can institute programs to encourage better behavior.

According to the National Association of Health Underwriters Corporate Wellness Certification Program, the return on investment (ROI) on Wellness is projected as:
34% - Increased Presenteeism
25% - Reduced Medical Costs
36% - Reduced Absenteeism
5% - Reduced Disability and Workmen’s Comp claims

Seventy percent of the projected return on investment of Wellness programs are from a reduction in absenteeism and an increase in presenteeism. In other words, fewer people will call off work and those who do show up will be more focused and productive if you have a Wellness program. The other thirty percent comes from reduced medical, disability, and Workmen’s Compensation costs.

Are there enough measurable gains to make this worthwhile for an employer or is this just a gimmick? The answer – it depends. A small employer, where the owners interact with the workforce on a daily basis, might find the intrusion into the employees’ personal lives uncomfortable and inappropriate. Large employers might have no difficulty imposing a company’s lifestyle values, such as no smoking or a 27 BMI, on their faceless workers.

And that brings us back to the government. We are getting mixed messages from this administration. As the federal government berates insurers for charging extra for preexisting conditions, it also welcomes penalties for lifestyle conditions such as uncontrolled cholesterol. This may be the test run for future government run health care programs. Will the federal health plans charge these people extra? Will the feds equate a 22 BMI with a good driving discount? Will Uncle Sam be monitoring your weight?

There’s a plate of Christmas cookies on the table. Did you ask your boss or the government if two would be OK?

DAVE

www.bogartcunix.com

Priorities

Retiring Representative John Shadegg (R-AZ) has been a frequent guest on Morning Joe, MSNBC’s morning news and talk show. The show’s namesake and principle host is former Republican Congressman Joe Scarborough. Mr. Shadegg has always been particularly candid on Morning Joe. I caught his November 30th appearance.

Congressman Shadegg extolled the virtues of the Bush tax cuts. He warned of dire consequences if taxes reverted to the rates of the 1990’s, even if only for people making over a million dollars per year. Actually, he was most concerned about those in the top tier.

How would we pay for continuing these cuts? These tax cuts were temporary because we couldn’t pay for them nine years ago. But reducing the tax rate was supposed to be such a powerful economic driver that the resultant job creation would have more than offset the short term loss of revenue. That hasn’t happened yet. But, according to Congressman Shadegg, continuing the Bush era tax cuts will ensure a reduction in unemployment.

Congressman Shadegg’s empathy was highly selective, especially when it came to the unemployed. He was very concerned about the tax cuts that could create jobs, but not terribly worried about those people who are actually unemployed. When it came to extending the unemployment benefits for the victims of the worst recession in seventy years, Mr. Shadegg suddenly became focused on every dollar coming to and leaving from Washington. He was positive that we couldn’t afford to continue benefits to the out of work. He implied that it was a waste of money. He opined that the unemployed wouldn’t stimulate the economy since they would just hoard the money.

Mike Barnicle: “Let’s get back to what you said about unemployment checks. People don’t spend that money?”

Representative Shadegg: “No, they will spend as little as they can because they’ll hold on to it as long as they can. In reality, they don’t create jobs.”

Yes, this is Health Insurance Issues With Dave and yes, the above has everything to do with the delivery of health care in this country. Watching Representative Shadegg the other day reminded me of why I have always been concerned about single payer, government run health care.

If nothing else, the last ten years have shown us that you may have to be thirty years old to serve in the U. S. Senate, but you don’t have to be an adult. Ten years ago, at the end of a major financial growth spurt, instead of saving money for the upcoming lean period (think Joseph’s interpretation of Pharaoh’s dream), we cut taxes. When we were attacked and went to war, our youth were asked to sacrifice twice, first in blood and secondly by being saddled with incredible debt. We then invaded Iraq, but still didn’t ask the American public for any sacrifice.

Somewhere along the way we screwed up the housing market, forgot the real purpose of banks, and sold our financial soul to China. And now we have well over 10% of our workforce unemployed and we are debating whether their food and shelter are national priorities.

Ten years from now. Twenty years from now. At some point when we have all been herded into a government run health care system, will your surgery be a future Congressman Shadegg’s priority? Will this government program, unlike all other government programs, be properly funded?

You don’t have to like Medical Mutual, Anthem, or UnitedHealth Care. You may even be really ticked at the annual rate increases. But, your policy will perform as per your contract and the insurer will always have the money to pay your claim.

Keith Olbermann has been highlighting the current mess in Arizona. Governor Jan Brewer has eliminated coverage for transplants from the State’s Medicaid program. Arizona can’t afford transplants. The eighty-some people who were waiting for lungs, kidneys or livers aren’t her priority.

The President and Congress have a lot of issues to tackle in the next few weeks during the lame duck session. Tax Cuts. Unemployment Benefits. Estate Taxes. Don’t Ask, Don’t Tell. A war or two. And, Harry Reid wants to talk about gambling. They all have their own agendas. Compromises will be made. Some bills will be signed.

And somewhere in Arizona there is a young woman with Cystic Fibrosis waiting for a lung…


DAVE

www.bogartcunix.com

The Blind Leading The Visually Impaired

The “grandfathered” rules have changed. Let the celebration begin! Ok, maybe not.

New information was released this week further detailing which companies can or can not remain grandfathered. This is an amendment to the interim final regulations that were issued on June 17, 2010 by the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury.

This is the link to the thirty-five page summary.

This is the quick version of what changed: Businesses are now allowed to change insurance companies as long as nothing else substantially changes.

My posts of August 2nd and August 16th provided a quick list of requirements to retain your grandfathered status and how difficult that may prove to be. A key point of contention was that unions could change insurers, but small businesses and individuals could not, even if the insurance company left the market or made significant changes to its products. This amendment reverses that for businesses, but not for individuals. Heck, it’s a start.

The rules, this one, the set issued in June, and all future regulations, are subject to change or reversal. Long term planning is based purely on educated guesses.

The enforcement regulations and delineation of potential penalties will quickly follow.

My prediction: The forms, the cost to remain in compliance, and the penalties will all be far more expensive than simply opting out of private insurance for small business. Paying an annual “No Insurance” penalty (TAX) to the federal government will be cheaper and easier.

You are now up to date. This really is the blind leading the blind. No one really knows how this is going to play out. We are all guessing. Some of us may be better guessers than others, but no one really knows for sure. The recent election may have a real impact on the Patient Protection and Affordable Care Act or it may not change a thing. That can be said of every variable. All we can do, as business owners, as employees, as health care consumers, is to pay attention and hope for the best.

It is time to review the process.

March 23, 2010 – Congress passed and the President signed a far-reaching piece of legislation that affects 1/6 of our economy and the health and well-being of every American.
June 17, 2010 – The Departments of Health and Human Services, Labor, and the Treasury issued rules that apply to all business and individual health insurance policies, RETROACTIVELY from March 23, 2010. The rules also allowed for Public Comment.
June 17, 2010 – Some businesses and individuals learned that the changes they have made, or have been forced to make, preclude grandfathering from the new regulations. Businesses enact new plans accordingly.
November 16, 2010 – New rules. You might have been grandfathered after all, but now that you have made other changes, you aren’t!

Sometime in the next three to six months – Final rules will be issued.

Next Steps:
* Compliance
* Enforcement
* Penalties

Once the rules are final, how will the government and your insurance company know that you are complying? My guess will be FORMS. The Patient Protection and Affordable Care Act, with the onerous 1099 requirements, is a printer’s dream. Clients are already asking if there will be notarized affidavits required to certify their status. Not yet, but that could be coming soon.

Change can be useful. Change can be difficult. Ill-conceived, disorganized, rushed change is bound to cause unnecessary stress. Yes, this really is the blind leading the blind, but we appear to be going around in circles and there isn’t a whole lot any of us can do about it. Relax. Concentrate on your business. This isn’t war. Bullets aren’t flying. We will get through this. Together.

DAVE

www.bogartcunix.com

National Greatness and David Brooks

Today’s Health Insurance Issues With Dave is being replaced by the latest New York Times column from David Brooks. The Title is National Greatness Agenda. It is, on the surface, more about politics than health care or health insurance. Dig deeper dear reader. If we are not more responsible, if we don’t get our government’s finances under control, none of these new government mandated and totally unfunded programs will survive.

As the health care debate reignites, it is time to once again demand transparency, accountability, and clear, definable goals.

We may all agree that we are a great nation, but are we willing to work towards National Greatness?

http://www.nytimes.com/2010/11/12/opinion/12brooks.html?ref=davidbrooks

DAVE

www.bogartcunix.com

OK. Now What?

Barry, my friend the CPA, is undoubtedly smiling. Barry formed a Tea Party of one, almost twenty years ago. His goal was to always have divided government. As long as the Democrats or Republicans were restrained, were kept from controlling both Houses of Congress and the Presidency, there would be some level of gridlock. Only the most important legislation could be passed. The moment either side had real power, all Hell broke loose. Last night was a good night for Barry and the many people who long for a smaller government.

This blog, however, is about health insurance and health care, not politics, so I will leave the list of winners and losers to others. Politics do play a huge role in how health care is delivered in this country and an even larger part in the foreseeable future. And health insurance, health care, and our system of entitlements had equally large roles in last night’s results. They are intertwined. The Republicans took the House last night. They almost captured the Senate. How will this impact health care?

The short answer may be “Not Too Much”.

President Obama came to office in the midst of a financial meltdown. He had three paths in front of him – a Crisis, a Disaster, and an Issue. He faced a divided country and had the chance to invest his political capital into only one. The Crisis was the economy and unemployment. The Disaster was Americans fighting and dying in two wars. The Issue was health care and specifically the uninsured and underinsured of our country. He chose the issue and spent the majority of his first two years and political good will pushing through an unpopular, poorly designed piece of legislation.

The Patient Protection and Affordable Care Act succeeded in energizing the opposition. Even centrist Democrats and Republicans were outraged by this combination of government overreach and intellectual dishonesty. Democrats representing swing districts, like John Boccieri, were pressured into supporting a bill that almost single-handedly caused their defeat.

Republicans have campaigned against the PPACA. Some have implied, some have even promised, to repeal this legislation. Can this legislation, passed only seven and a half months ago, be reversed? And, more importantly, do the Republicans want to?

NO and NO.

The Patient Protection and Affordable Care Act is not going to be repealed or reversed anytime soon. Oh, I’m sure Speaker-designate John Boehner will run a bill through the House. It will be great political theater. And, it will be risk free. The legislation won’t get through the Senate, and even if it did, it would be vetoed by the President.

I sincerely doubt that the Republicans would want to repeal this legislation. This is a fundraising bonanza. Campaigning against PPACA is far more profitable than solving the problems that necessitated the law.

So, we have a bad bill and the real possibility that cynicism may rule the day. Plus, we have yet to mention the insurers who have already spent millions to comply with the new rules and regulations. I firmly believe that the insurers have devised a path to real success under a government run health plan where they provide supplementary coverages. The major insurance companies would then have no desire to repeal the law.

We are quickly approaching the next calendar triggers of the health care legislation. It is possible that the Republican lead House of Representatives, far more interested in extending the Bush era tax cuts than anything else, might tackle meaningful reform in early spring. In a yet to be exhibited act of political maturity, the House could even draft a bill to limit and refine the PPACA. Such legislation could be passed by the Senate and signed by the President. It is possible. I leave the question of probability to you.

We had a major governmental change last night, a massive swing from the left to the right. What has changed in regards to the delivery of health care, the affordability of health insurance and the access to needed medical care? Alas, not much.

DAVE

www.bogartcunix.com

How Much Will Free Cost You?

I looked at the Medical Mutual form again. Yes, I was a bit flustered by the beautiful woman with the deep dark eyes sitting there, next to me, in my office. But thirty-two years of experience kicked in and I continued to study the form. The numbers did not make sense. It took a call to the insurance company to solve the mystery.

I understood the answer immediately. Natasha’s health insurance policy renews November 1st. One premium, $510.96, is for her current “grandfathered” policy covering her and her college student son. The non-grandfathered version of the same policy is $547.75, a difference of $36.79 per month.

Welcome to the next phase of the implementation of the Patient Protection and Affordable Care Act. New provisions became effective on September 23rd. Like day following night, new prices became effective on September 24th.

In my post, Addicted to Other People’s Money, I wondered how much the new free basic preventive care services would cost us. We now have the initial price tag.

First, let’s detail what changed on September 23, 2010. The two key elements are Essential Benefits and Preventive Care. The definitions, below, come courtesy of Medical Mutual of Ohio. The email quoted in my July 20th post from Mrs. Obama bragged of even more comprehensive (expensive) benefits.

Essential Benefits: The law requires plans to remove lifetime limits on what the government defines as “essential” benefits. The law will also prohibit annual dollar limits, but not until 2014, which allows insurers to phase lifetime limits out by implementing annual dollar limits that will be incrementally increased each year until 2014. Essential benefits include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services, chronic disease management and pediatric services (including oral, vision and hearing examinations).

Preventive Health Services: Plans may not impose any cost-sharing requirements (e.g., copay, coinsurance or deductible) on preventive health services, as defined by the U.S. Preventive Services Task Force, when administered by a network provider.

Quick summary:
Essential Benefits become limitless.
Preventive Care Services become free.

Natasha (all names changed) and her son would be forced to pay $431 more over the next year for this. Another client, Paul, had a much more expensive experience. His new Anthem policy was effective September 20th. The premium for Paul, his wife, and two children for a high deductible contract is $402.55 per month. Since he had already paid his September and October premiums for his old policy, he wanted to re-date the new policy to November 1st. The premium for the exact same policy, enhanced with the new Free benefits, would be $480.77, an increase of $78.22. Are these new provisions worth almost $1,000? Not to Paul. And probably not to you.

So here we are, less than a year into the new law, and we are already seeing the impact of the new Patient Protection and Affordable Care Act. It is harder, not easier, to insure Americans. Insurance is more expensive, not less. And the words Cost Containment are still missing from the President’s vernacular.

The September 23rd changes are just becoming effective. More mandated changes are due for January 1st. And the rules are still being written, on the fly, as we reinvent the delivery of healthcare. I’m just hoping that nothing else is Free. We can’t afford free.

DAVE

www.bogartcunix.com

By the way, Jeff, my business partner, was concerned that this post was too dry and contained too much detail. I told him that I could trust my readers to not only plow through a fact laden piece, I could even count on some of you to add pithy, timely comments.

We Have To Destroy This Village To Save It

Insurance is real. My job is to work with real people, everyday, to solve real problems. I get angry and frustrated when the theoretical and the hypothetical invade my space and get in my way. Yes, I have an agenda. All but the apathetic have an agenda. The undeclared and disorganized agenda of the national Democrats interfered with my work this week. And I am more than just a little upset.

Jimmy (yes, the name is changed) is a healthy eleven year old living in Greater Cleveland. I have no idea where his dad lives. Jimmy lives with his mother, Wendy, a woman who has not worked since her unfortunate skiing accident of a few years ago. Jimmy’s major bills, like school, are paid by a generous aunt. Jimmy is uninsured.

Wendy had insurance for her son and herself, but she let it lapse in August. She didn’t pay the insurance and she didn’t tell her sister until last Monday. Why are the dates important? Because now we have a problem.

Wendy’s sister would have kept the old policy active, had she been notified in a timely manner. Though Wendy has recovered, for the most part, from her serious injuries, she is difficult to insure at this time. Due to the new health bill, we can not write a Child, Only policy on Jimmy. We could two weeks ago. A comprehensive policy on a healthy eleven year old used to be around $100 a month. That policy no longer exists.

Proponents of the new health care legislation, the Patient Protection and Affordable Care Act, love to cite the new provisions for covering children. No underwriting. No limits on preexisting conditions. Totally free preventive care. How do you price that policy? How do you properly build reserves for the sudden, and massive, shift of risk as parents currently paying for underwritten policies move to blindly issued contracts? You can’t. The insurance companies eliminated all Child, Only policies.

How many unhealthy kids are there? How many of my clients, small businesses in Northeast Ohio, are paying higher premiums because the owner’s child has a heart condition or a genetic disorder or some other ailment that requires substantial care? LOTS. And if the insurers didn’t play self-defense, if the companies unthinkingly threw open the doors and took all of them at a standard rates, the results would be devastating.

So where does that leave Jimmy, our healthy eleven year old? I can write, for the moment, short term, catastrophic coverage on Wendy and Jimmy. G-d forbid insurance. It is the best I can do. Governor Strickland, realizing the mess Washington has created, signed an emergency order this week to force the insurance companies to have a special “open enrollment” for Child, Only policies. Medical Mutual of Ohio, Anthem Blue Cross, and UnitedHealth Care have yet to determine how to comply with this order or how to price the product.

We had a health care system. It was uniquely American and it served 80% to 85% of us. It was hardly perfect, but it was ours and, like it or not, it reflected our values and our tastes. We needed to improve the system we had to better serve all Americans. Instead, we are in the process of dismantling our method of paying for health care and interacting with our medical providers.

Jimmy is just, to use the proper term, collateral damage.

DAVE

www.bogartcunix.com

Random Thoughts Column

A few short posts about life as I know it.

Sprinkling a Little Holy Water

Boundaries. I noted a few weeks ago in my other blog, Again? Really?, that neither Reverend Kenneth Chaulker nor I should comment on the Catholic Church’s ongoing problems. I was reacting to his letter in the Plain Dealer. My suggestion was to leave the discussion of Catholicism to Catholics. Last Friday’s Plain Dealer gave us an opinion column from Sister Simone Campbell, the executive director of a Catholic social justice lobbying group based in Washington, D.C. If I compare her level of understanding of the real world issues involved in the health insurance debate, I am now qualified to lead Mass.

Just as I might be able to mouth the words in Latin, Sister Simone Campbell provided us, the readers, with another copy of the talking points from the Democratic Party’s campaign. About a third of the essay is a defense of the politicians who voted for the bill and an attack against those of us who have yet to be converted.

There are real discussions taking place around this country among business owners who will be forced to pay higher premiums, taxpayers asked to subsidize unfunded mandates, and legislators challenged to justify their decisions. Sister Campbell, like me in a church, is just another kibitzer.

Addicted? We’ve Got a Cure!

A series of emails arrived last week to alert me about an issue that could affect my clients. The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) applies to group insurance plans covering 50 or more employees. The law went into effect last October. The rules were issued three months later in January 2010. I printed the key email, a white paper from Milliman, the independent actuarial and consulting firm, and noticed an important sentence at the bottom of the page:

This document was sponsored and commissioned by Pfizer, Inc.

Pfizer? The name of the paper: The Mental Health Parity and Addiction Equity Act: Key Elements and Implications for Smoking Cessation.

Plan sponsors and their service providers and advisors need to be diligent when identifying insured benefits to be compliant with MHPAEA. For instance, it is easy to overlook smoking cessation benefits: they are covered by the act because they are a treatment for nicotine addiction, a substance use disorder.

Now it makes sense. Smoking isn’t a bad habit. It is a sickness. And we’ve got prescriptions for that. Guess who makes them?


The Good News – You’re Living Longer
The Bad News – That’s Gonna Cost You

John Hancock, a leader in Long Term Care Insurance (LTCi), recently announced a price increase. A careful study of all of their long term care claims (both group and individual) of the last twenty years forced them to make this decision.

Morbidity is up. Mortality is down.

Long Term Care Insurance pays when the insured is unable to perform two out of six of the Activities of Daily Living – bathing, dressing, using the toilet, transferring (to and from bed or chair), caring for incontinence, and eating. Hancock has seen an increase in claims and the claims are lasting longer. People are living longer after they begin to receive benefits. More people are living to an age where claims are almost inevitable.

The higher than anticipated utilization proves the need for the product. It also forced the reevaluation of the premium. John Hancock has been selling LTCi for less than thirty years, but has already paid out more than $3 billion in claims.

Why should you care? Because, insurance isn’t as easy as it looks. For every profitable line, there are types of coverages with very thin margins. And we want our insurers to be here, solvent, when we need them to write that check to us or our family. The insurers must maintain secure reserves. Their books have to balance. Their numbers have to be real.

All of the wishing and praying in the world can’t change the nature of basic mathematics.

DAVE

www.bogartcunix.com

By the way, I know that Mass is now done in English, but just as I prefer Hebrew in the synagogue, if I was going to celebrate Mass, I would go for the Latin.

If You Don't Know What To Do, Do Nothing

My business is on hold. I’m not talking about the phones. I’m not talking figuratively. Literally, a major portion of my business is on hold. There is so much uncertainty, so little clarity, that I am, for the next few days, unable to write new individual health insurance policies through the largest insurers in this area.

I first noticed this about a week ago. One of my Anthem clients has a policy renewing October 1st. The new premium wasn’t too bad, but she wanted to know about other options. I couldn’t locate the link on their website. Admitting computer illiteracy, I sent a request in to Agency Services. I was shocked by Anthem’s response. The link was removed because there are no options. I was asked to resubmit my request after September 23rd. Anthem is waiting to see what the federal government is going to do.

Thirty-two years in the business and this is the first time I’ve ever seen an insurer tread water. I decided to run a quote for her as if she was a new client. My software said “Tilt”. Anthem’s online quoting had this note: “Plans and rates effective 9/23/10 and after will be available as soon as our Health Care Reform compliant plans are available for sale." If you need a new health insurance policy, Anthem is not an option. At least, not today.

Medical Mutual of Ohio is still quoting. In fact, MMO will quote their entire product line, but all applications with an effective date of September 23rd or later won’t be issued if children are to be included in the plan. Family policies are put on Underwriting Hold. The applications aren’t declined. They certainly aren’t issued. These potential policies are in limbo.

What can the insurer’s do? The Patient Protection and Affordable Care Act is a shell of goals and half-baked concepts. The rules and regs are still being written and many will apply, retroactively, to March 21, 2010. And, the insurers had better not complain. Kathleen Sebelius, the Secretary of U.S. Health and Human Services, is threatening any insurer who informs its clients of the actual costs associated with this scheme.

We have discussed the whole grandfather issue in previous posts. Grandfathering separates which business might escape some of these new rules for awhile and who will be impacted immediately. Businesses covered by Aetna don’t have to waste anytime studying the grandfather provisions. Between the recently written regulations and a couple of Aetna’s decisions, no Aetna small group health policy qualifies to be grandfathered.

Children are a key part of next week’s problems. Can they be underwritten? Can the insurance industry really cover every preexisting condition for every child, with no limits, without raising the price of policies? How much is enough? Who is going to pay?

Since we have never had an honest discussion about price or goals, we have arrived, six months into this grand experiment, at a crossroads. Some form of nationalized health care still appears inevitable, but the President and Congress refuse to put their cards on the table. Without taking the time to clearly define the goals and costs, we are at the first of several predictable impasses.

The insurers will be happy to sell supplements to the future government health plan. UNUM has already released the first plans specifically designed for that. Assurant and UnitedHealth One have new accident and dental policies. What are they supplementing? The federal government has done a great job of pressuring the insurance companies, but it is ill prepared to handle its part of the program.

So, a major portion of my business is on hold. If you and your family need coverage as of October 1st, I may, or may not, be able to help you. I hope to know more by next Thursday.

DAVE

www.bogartcunix.com

True Equality

The Heck with building better highways for better Negro marchers. What we need is to get our fair share of the crooked contracts that build those highways.

Godfrey Cambridge

How do you define equal opportunity? In Cuyahoga County, the right last name and a lack of scruples guaranteed a safe and secure government job. These positions may not have paid very well, but attendance appears to have been optional.

I am happy to report that you don’t have to settle for county money. The federal government is dedicated to equal opportunity for all Americans willing to engage in criminal activity. If you are ready to make serious money, Medicare Fraud could be your big break.

A recent report on 60 Minutes detailed the scope of Medicare Fraud, how easy it is to steal from the U.S., and our government’s inability to control a program that insures almost 50 million Americans. It is estimated that WE, the U.S. taxpayers, are losing about $60,000,000,000 a year to Medicare Fraud.

Medicare Fraud could be overbilling or double billing. Unfortunately, it is most often the filing of claims for goods or services that were never provided. These aren’t errors. We are discussing the theft of billions of dollars.

The politicians will tell you that they are doing a great job. Sure Medicare Fraud is a huge problem, but they are holding Summits and making arrests. Kathleen Sebelius, the Secretary of U.S. Health and Human Services, posted her August 26th speech at the Stop Medicare Fraud Summit. Read her speech where she described band-aids like an excited four year old.

Last Friday The Miami Herald reported that Ernesto Montaner was sentenced to four years in prison and Jose Varona , three. The two men were also ordered to repay a total of $4 million. They were billing Medicare for rehabilitation services that never took place. Montaner’s father, the brains of the group, is in Costa Rica. What the story doesn’t say is how much money they really stole and what, if any, will ever be repaid.

Medicare Fraud is out of control because the government won’t allocate the necessary resources. Congressmen, like Anthony Weiner, often cite Medicare’s overhead as only 4%. As noted in the February 5, 2010 posting of this blog, Mr. Weiner has even claimed a preposterous 1% overhead.

* Let’s pretend that 4% is accurate.
* Let’s pretend that much of Medicare’s actual expenses don’t fall into other parts of the federal budget.
* Let’s forget about all of the costs shifted to our law enforcement agencies and courts.

Medicare paid approximately $430 billion in claims last year. $60 billion went to thieves. That is 14%! That money didn’t go to care. That money didn’t go to prevention. That money wasn’t even spent on taxable salaries. It is money, your money, flushed down the toilet.

The new health care bill, the Patient Protection and Affordable Care Act, attempts to level the playing field. Insurers are being forced to reduce their overhead expenses. Part of the savings will come from a reduction in agent compensation (ouch). Home Office personnel will also be cut. But the insurers, unlike the government, will never pay out 10% or more of their claims to crooks.

As long as there are cars, there will be ample opportunities to scam big money as a construction contractor. But I think if Godfrey Cambridge was delivering that stand-up comedy routine today about equal opportunity, he would want to know whether Blacks in Detroit or Los Angeles were getting their fair share of the Medicare Fraud largesse.

Rest in Peace Mr. Cambridge. Everyone’s getting their cut.

DAVE

www.bogartcunix.com

Herding Cats

My friend Mitch, who lives in Montreal, was stuck overnight in Cleveland. Mitch used to live on Solon. He misses his friends, our shopping, and our health care – in that order. While visiting him at the airport Marriott, he once again regaled me with his stories of fighting for the attention of Canadian doctors and hospital staff. He hopes to return to the U.S. one day. He is counting on our system to still be here for him.

Mitch and my friends on the far right are very worried that we will one day have a single payer, rigid system like Canada’s. My one word answer is to RELAX. If you would like proof that their fears are in vain, I give you an article in yesterday’s Plain Dealer.

The story, a reprint of a New York Times article, was about medical marijuana. Medical marijuana is legal in some states, illegal in others. It is banned by some employers while ignored by others. The federal government has raided distribution centers while giving lip-service to states’ rights.

We are Americans. We could never tolerate an absence of choice. We would never accept a one-way, the only way, type of health care system. We are contrarians by nature. Our rules constantly change because we are constantly changing.

The short article included a brief description of Nick Stennet’s employment problem. Mr. Stennet told his employer about his health problems and his daily use of medical marijuana. He was later fired when, surprise, he failed the drug test. The lawyers should have a field day with this.

The laws in Rhode Island might be like the laws in Hawaii, but very different than those in Utah or Alabama. People in Maine choose to live in Maine, not New Hampshire. And California is constantly at war with itself. That’s us. This is the essence of the United States.

Rigid? Choiceless? Single-payer with no other options? That’s just not our style.

DAVE

www.bogartcunix.com

As Seen In The Plain Dealer

My last post on Health Insurance Issues With Dave generated a lot of responses. Some people were frustrated with yet another under-publicized provision of the Patient Protection and Affordable Care Act. Some used my article as an opportunity to complain about the Democrats, in general, and the President, in particular. But the phone calls all went something like this:

Dave, OK I’m scared. This doesn’t apply to me, right? I’m grandfathered.
No, it does and you aren’t!

There was an excellent article about the rules to be eligible to retain grandfathered status in the August 8th Plain Dealer Forum Section. It was written by Michael P. Coyne. The article tied in so well with my blog and my clients’ concerns that I felt compelled to write a Letter to the Editor. This appeared Saturday, August 14th.

Michael P. Coyne's article about "grandfathered" health plans (Forum, Sunday) shed some light on the challenges small businesses face with the Patient Protection and Affordable Care Act. Please let me add a real-world example.
A client called recently to verify that his plan still qualified as "grandfathered." It didn't. He employees about 25 skilled and semiskilled workers and has always provided health insurance. His June renewal with a major carrier included a rate increase of 23.7 percent. Luckily for his employees, another carrier with a little better coverage was less expensive. The employees won. The employer won. Everyone is happy -- except Washington.
You lose your "grandfathered" status if you change insurance carriers.
"Why should I be punished?" my client asked. "They now have better coverage."
The answer, of course, is simple. None of this is about coverage.

Is it really that simple? Yes. Unions can change insurance carriers without forfeiting their grandfathered status. Businesses can not. Will this affect the client’s employees and how he does business? Definitely. I’m positive that this legislation will have a significant impact on the payment and delivery of health care.

The rules may be written on the fly, but the outcome appears to be predetermined.

DAVE

www.bogartcunix.com

By the way, special thanks to those of you who followed ALL of the links in the last post. Even the most serious of topics needs a little levity.

Don't Cry Uncle, Stay Grandfathered

Grandfathered - The right to stay under the old rules and regulations that new policies must follow. The more onerous the new rules and regulations, the more desirable it is to be grandfathered.

The new rules are coming. In a rush to change the delivery and payment of health care as quickly and as irrevocably as possible, Congress made the Patient Protection and Affordable Care Act effective the day it was signed into law, march 23, 2010. The rules have yet to be written. The U.S. Departments of Treasury, Labor, and Health and Human Services are issuing interim final rules. Nothing is set in stone, except that all of the rules they create will apply to all group and individual health insurance policies that aren't grandfathered.

Policies on the books as of March 23, 2010 may be grandfathered, may be exempted from some of the new rules. Which rules? Who knows? The rules and regs are fluid. The insurers are being pressured to institute some changes "voluntarily".

How important is grandfathered status? There is no way to assess the value at this point, but the government is attempting to make it very difficult to maintain. So difficult in fact, that the rules to keep that status got my attention. When Washington erects this many roadblocks, and a damaged bridge isn't involved, you might want to see what is on the other side.

The following, courtesy of Medical Mutual of Ohio, is a synopsis of the Interim Final Rule for the maintenance of the status of a grandfathered plan. The following changes will cause individual and employer plans to no longer be grandfathered:
* A merger, acquisition or similar business restructuring, if the principal purpose of the action is to cover new individuals under the grandfathered plan.
* A substantial elimination of benefits to diagnose or treat a particular condition.
* Any increase in cost-sharing percentage requirements (such as coinsurance) above the level in effect as of March 23, 2010.
* An increase in the fixed-amount, cost-sharing requirements (e.g., deductible or out-of-pocket limits) above the level in effect on March 23, 2010, other than copayments, that exceeds the sum of medical inflation plus 15 percent.
* An increase in copayments above the level in effect on March 23, 2010, by an amount that exceeds the greater of the sum of medical inflation plus 15 percent or $5, adjusted annually by medical inflation.
* A contribution rate decrease by an employer or employee organization of more than 5 percent below the contribution rate on March 23, 2010, for any tier of coverage and any class of similarly situated individuals.
* The addition of an overall annual limit on the dollar value of benefits if the plan was not imposing an overall annual or lifetime limit on the dollar value of benefits on March 23, 2010.
* The addition of an overall annual limit on the dollar value that is lower than the dollar value of the lifetime limit on March 23, 2010.
* Any decrease in dollar value of the overall annual limit (regardless of whether the plan had an overall lifetime limit on March 23, 2010), if the plan imposed an overall annual limit on the dollar value of all benefits.
* A change in health plan carriers (changing a third party administrator has no effect).

Almost any change made since March 23, 2010 disqualifies your plan from being grandfathered. Did you know that in April when you raised your deductible? Have you changed your copays lately? Even replacing the exact same benefits with a different insurance carrier causes you to forfeit your grandfathered status. This isn't about you, your business, or your employees. It certainly is not about making your current policy more effective.

Will there be any benefit to having a grandfathered health plan? I don't know. But, the government thinks that there will be a real value and Washington is working very hard to take it away from you.

DAVE

www.bogartcunix.com

Addicted To Other People’s Money

Three minutes. Citizens are allowed three minutes to address the Beachwood City Council at regularly scheduled meetings. This isn’t a Q & A. If the Councilmen deign to respond to the concerns raised or answer the questions asked, it will happen whenever they choose. The agenda designates this as Citizens’ Remarks. The microphone is yours. You have three minutes.

I used to attend every Council meeting. A special entry was added to the City’s agenda, Chamber Report, for me to address Council. But I am no longer the president of the chamber of commerce and I have other ways to spend two Monday evenings a month. I forced myself to attend last night’s (July 19th) meeting.

The City of Beachwood is ready to take a 33% income tax hike. Beachwood would jump from one and a half percent to two. City revenues are down in these tough economic times. The goal is to tax the people who work here, but can’t vote, as opposed to the people who live here and can. I was at the meeting to watch City Council sing and dance.

I had no intention of speaking at the meeting until I saw item 9 on the agenda:

An Ordinance extending a Contract with Medical Mutual of Ohio (MMO) for renewal of health insurance coverage for City employees, declaring the existence of an emergency condition regarding health insurance coverage and further waiving competitive bidding.

I read that paragraph several times. This was easily one of the most ridiculous things I had seen in thirty-two years in the insurance business. Ticked off, I waited for the Citizens’ Remarks portion of the meeting.

I began by clearly stating that I don’t work with municipalities. My interest was strictly that of a taxpayer. I noted that there are no insurance emergencies. The City had plenty of time to get bids from countless other insurers. Anthem? UnitedHealth Care? Aetna? They simply didn’t bother. Why would they? They’ve got us to pay the bills.

As the meeting dragged on, we eventually learned that the City never negotiated with the employees to accept a less expensive policy. The City never negotiated with the employees to increase their contribution. Beachwood hasn’t solicited for bids in years. The Mayor and Council can’t help themselves. They are addicted to other people’s money.

Other people’s money is a common addiction. I was thinking about it earlier yesterday as I was reading an email from Michelle Obama. Yes, I’m on her email list. She and other members of the White House send me emails all of the time.

Anyway, Michelle (she calls me David) wanted me to know about all of the great ways that the new health care bill was going to help my family and lower costs.

So much of what makes this law great is its emphasis on preventive care--right now, too many people aren’t getting the check-ups or the screenings they need to stay healthy. Twelve percent of kids haven’t seen a doctor in the past year. And 59 million adults--and 11 million children--depend on an insurance plan that does not cover basic immunizations.

Health reform is changing that. Under this new law, all new private plans will provide basic preventive services--things like childhood immunizations and checkups, mammograms, colonoscopies, cervical screenings, and treatment for high blood pressure--absolutely free of charge. No copay. No deductible. No co-insurance needed.

Does this mean that America’s doctors will be providing free exams? Will labs dedicate entire months to free blood work? Will pharmacies dispense free blood pressure medications? Of course not. Our medical providers expect to be paid for their time and efforts. Rightfully so. These tests, services, and products aren’t free. Your insurance will pay for them. And you will pay more for your insurance.

Nothing is free save your mother’s love. But when you are addicted to other people’s money, you lose sight of the real cost of anything. There is always someone there to pick up the tab. And eventually the addicts forget that there is a cost. But actions have consequences. Goods and services and not free.

Beachwood, and countless other municipalities around the country, will get a crash course in effective budget management. They may even be forced to make some tough decisions. The new health bill has already begun to force business owners to make tough decisions. The only Americans unaffected are like my email buddy, Michelle, the ones addicted to other people’s money.

DAVE
www.bogartcunix.com

The Blind Squirrel

Should all businesses provide health insurance benefits to their employees? As a guy who makes his living selling group health policies to employers, you might think that I would answer with an emphatic “YES”. In theory, all businesses should provide benefits. In practice, not necessarily.

Sunday’s Plain Dealer included an article about the White Castle hamburger chain and the unintended/intended consequences of the recent health care legislation. According to the article, White Castle has been providing health insurance coverage to its full-time employees for a very long time. And, they are more than generous, paying 70% to 89% of the cost. By these measures, White Castle is a good corporate citizen.

But it is not enough. The Patient Protection and Affordable Care Act imposes a $3,000 per employee penalty on companies whose workers pay more than 9.5% of household income in premiums for company provided insurance. “White Castle estimates that this new rule could cost as much as 55% of its yearly net income."

Before we go any further, it is important to note that a recent study found that 78.9% of all statistics were created at the moment of their citation.

So I may not be certain about the actual pain White Castle may experience. Of course, when Nancy-Ann DeParle, Director of the White House Office of Health Reform, is quoted later in that same article that 97% of the nation’s companies won’t pay any penalties, I am equally skeptical.

Let’s talk real numbers. There are lots and lots of people earning $9 an hour. Is that right? Should they be paid more? I don’t know. You hire them and let me know. Today we’ll simply work with reality.

$9 an hour times 35 hours per week times 52 weeks per year equals $16,380. This person could only be charged $30 per week to participate in the company health plan. Anything more and the employer is charged $3,000 per employee. Restaurant worker, Retail employee. Clerk. There are a lot of people earning less than $20,000 per year. Their employers have a problem. Or a choice.

Will employers absorb even more of the rising health insurance premiums? Will employers make do with fewer workers? Or, will businesses cancel their private insurance and pay the lower $2,000 per employee penalty for not providing coverage?

The cheapest option, even less than providing high quality health insurance to its employees, may be to pay the $2,000 per employee penalty and to cancel the benefits. This just funnels more people into the government plan.

The article also quotes Steven Kreisberg of the American Federation of State, County, and Municipal Employees Union (AFSCME). Uniquely unqualified to address the concerns of any business, Mr. Kreisberg assures us that the young and healthy will simply opt out of their employers’ plans. The employers would then save premium dollars by paying $2,000 per employee per year for nothing. Forgetting that businesses hate to spend money for nothing, we still understand that taking the young and the healthy out of the employers’ groups will only make their premiums skyrocket.

The structure of these penalties only make sense if the ultimate goal is a government run health care system.

There were other experts and ax-grinders quoted in the Plain Dealer article. One was the number one Republican in the House of Representatives, John Boehner (Oh). Mr. Boehner is the George Hamilton of national politics. While Mr. Hamilton’s movies feature his tan and a lightweight plot, Mr. Boehner’s TV appearances tend to feature his tan and his lightweight logic. I have always thought that his job was to keep the seat warm till a real leader emerges. I am not a fan.

Imagine my surprise when I read this quote from Mr. Boehner. “The irony is that in the name of expanding health care coverage, the administration is making it harder than ever for unskilled workers to get started in the workforce.”

Sure the populism is feigned. But truth is truth. In a rush to achieve a goal with little thought to the consequences or collateral damage, this administration has begun to implement its health care takeover. And, as per Mr. Boehner, it is true. Even a blind squirrel can eventually find a nut.

DAVE

www.bogartcunix.com

The Shell Game

The recently passed Patient Protection and Affordable Care Act forces the State of Ohio to re-address our uninsured. Of particular interest is our population of high risk uninsured. These individuals are very unhealthy and have not been insured for over six months. The previous options available to our high-risk pool were both mediocre and expensive. Still, many of our unhealthiest accepted the available state mandated option. Today we are talking about those who did not.

According to the report published in the Plain Dealer this past Saturday, the federal government has allocated $152,000,000 to help cover these Ohioans until the new rules kick in, about four years from now. Medical Mutual of Ohio, a local not-for-profit, won the contract to manage the policies.

This is not free insurance. The individuals will be required to pay some yet to be determined premium. What does one hundred fifty-two million get you? The State’s best guess is 5,000 insureds. Based on my knowledge of the current premiums and benefits available to these individuals, that number might be a touch optimistic.

In a post dated June 29, 2009, The Real World, I noted that Governor Strickland’s budget included a premium reduction for the open enrollment policies available to Ohio’s unhealthiest citizens under age 65. The cost for this would be borne by Ohioans who pay for their own health coverage. We would, according to the State’s actuary, pay 5.5% more to help our neighbors acquire insurance. My clients can attest to their rising premiums.

The one hundred fifty-two million dollars is part of a total five billion dollar four year program. Let’s pretend that 5,000 is a real number. For our purposes, let’s pretend that all of these numbers are real, the federal government really has five billion dollars, and we really get our hundred fifty million. 5,000 beneficiaries would get only $30,400 towards their coverage. This is only $7,600 per year, a little over $600 per month. Is that even close to the actual cost of insuring these individuals?

The current Medical Mutual of Ohio premium for the Ohio Standard policy for a 60 year old male in Cuyahoga County is $1,403.08 per month after the recent rate reduction. We already know that that is not sufficient to pay claims. Will our soon to be insured make up the $800 per month difference? And, will the new federally designed policy be as awful as our current contract or will it be more generous and costly?

This, of course, does not even begin to address the fact that there are far more than 5,000 Ohioans who are both very unhealthy and in need of a different way to pay for their health care.

There was a time, not so long ago, that we were told that one of the main reasons we had to go to war was because of the way the Taliban treated the women of Afghanistan. We have been told that the purpose of health care reform was to cover the uninsured. The selectivity of our focus and actions make both arguments seem specious. Our government is perfectly happy to ignore the abuses of cooperative tyrants who provide us with cheap oil. And we have yet to show any real interest in devising, and FUNDING, a program to truly cover our unhealthiest and uninsured.

What we have is a shell game. More and more costs are being shifted to those of us with private insurance. All the while the federal government attempts to block insurers from raising rates to cover the true costs. Books must balance, at least in business.

My predictions of a few months ago still stand.

DAVE

www.bogartcunix.com

A Knight In Shining Armor

Dr. Ballard made the cover. The current issue of Cleveland Scene featured a story about Robert Ballard, M.D. It appears that Dr. Ballard, age 69, was recently fired. This was not the first time he was fired or defunded, just the most recent and, in his mind, most surprising. Scene depicts him as a good doctor, a caring physician, a practitioner committed to Wellness. He just wants a salary. Is that so awful? Forty-three years since his graduation from a Cleveland medical school and he still hasn’t grasped how and why he gets paid. In essence, he is the poster grandparent for single payer health care.

I bring up Dr. Ballard because of Scene’s cover. There, in four color, is the unemployed doctor dressed in a lab coat walking his dog. I have developed a real appreciation for lab coats.

You can’t be a real doctor, or even a real fake doctor, or even a good stage prop without a lab coat.

I was in China for nine days this past April. My tour took me to Beijing, Shanghai, Suzhou, and Hangzhou. I was at the Great Wall (amazing pictures), a Ming Tomb, and the Buddhist Temple LingYin. Other cultural/shopping destinations included a jade factory, a silk factory, and a Cloisonné factory. You get the idea. We also stopped in the offices of the purveyors of Traditional Chinese Medicine.



The doctor explained the efficacy of Traditional Chinese Medicine and we were each given the opportunity for a free exam. No blood tests. No sample jars or paper cups. The doctor diagnosed each person, one at a time, by simply taking the patient’s pulse. Then he prescribed the appropriate herbs each inevitably needed.

The doctor took my pulse and asked about my blood pressure medication. “None”, I replied. He was baffled. Me? I was totally relaxed and trying hard not to laugh. I love a good sales pitch. No blood tests. No tests at all. Why was he wearing a lab coat? Our doctor was in costume for his American audience.

My fascination with lab coats can be traced to the recent health care debate. My local Congresswoman, Marcia Fudge, was hoping that her vote was going to be news. It wasn’t. Our Congressional Representatives, even those in safe districts, need to make the six o’clock news now and then, if only for their egos and fundraising. The “White Coat Doctors”, Doctors Organized for Health Care Solutions, were ready to play their part. This is the group that instructs its members to keep their lab coats in their cars and to be ready at a moment’s notice. Their job is to show up at the press conference, coats on, and to nod approvingly. It took tens of thousands of dollars of education for these people to be stage props. But if you call them, they will ride in, like knights in shining armor.

DAVE

www.bogartcunix.com

No One Is Above The Fray

Jennifer, my lovely daughter, had a wonderful orthodontist. He was the dental equivalent of Mr. Rogers. Gentle. Caring. The kids loved him. The parents respected him. We, the parents, just hated going to his office.

Jen and her fellow patients were all in middle school. They would check in and find their way back to an open room and an array of colored rubber bands. The parents would sit and wait, hoping to not be noticed by the doctor’s office manager, a young woman who had a habit of standing in the doorway and calling out to us.

“Mr. Cunix.” Uh oh. “Doctor says that Jenny should do a better job brushing her teeth.”

“Mrs. Smith.” It was someone else’s turn. “Your insurance wasn’t approved.”

I began waiting for Jen in the building’s atrium. I was not alone.

Great dentist. Happy kid. All was right in the world right up till my insurance got screwed up. I had to go in. Ms. Noisy was sure that I had a problem. I quickly determined what she had done wrong. Now she was both loud and unhappy. It was time to meet with the doctor.

With childlike innocence, the orthodontist explained to me that he only dealt with the teeth. He didn’t know anything about the paperwork. He didn’t touch it. I looked him in the eye and reminded him that he owned a business. He couldn’t divorce himself from the hard part. He couldn’t keep his hands clean.

The paperwork got better and the consultations with the parents became private.

I was reminded of this long ago confrontation by Dr. Johnathan Ross’s rant in this past Sunday’s Plain Dealer. Dr. Ross is identified as the past president of Physicians for a National Health Plan and a leader of Single Payer Action Network in Ohio. I have provided the links. Take a moment to read the article and research the groups.

Dr. Ross is positive that our health care delivery system’s only problem is our method of payment. It’s the insurance companies. If only we had a single payer system. Our costs would plummet and all would be right in the world.

“So what's the alternative? It's building on the solid foundation of our tax-financed, low-overhead Medicare system, and extending it to cover everyone without exception. The administrative savings from such a streamlined system would amount to $400 billion per year, enough to provide comprehensive coverage to all with no significant out-of-pocket expenses and with complete choice of doctor and hospital.
A single-payer system would also have the clout to negotiate drug prices and provider fees, and to allocate resources efficiently and wisely. It would possess powerful tools for improving quality and controlling costs.”

At the risk of sounding like a Saturday Night Live Skit, REALLY?

We would save $400 billion a year?
Really?

Comprehensive coverage to all with no significant out of pocket expenses?
Really?

Clout to negotiate drug prices and provider fees?
Really?

Allocate resources efficiently and wisely?
ENOUGH!

Somehow our federal government would suddenly repair its abysmal record of fraud prevention, negotiate drug prices and provider fees, and reorganize our entire health care delivery system with no increase in administration costs or personnel. G-d knows, when I think efficiency, I think Washington.

Is this all a lot of hooey? Not quite. Dr. Ross is hoping that we, like my daughter’s orthodontist, will forget that medicine is a business. Big business. Dr. Ross, and physicians like him, are offended that the insurance industry is part of their business. A large part. I don’t take it personally. Sometimes I’m offended that the doctors are a part of mine.

Dr. Ross wants to be paid better, faster, and with less paperwork and oversight. Can we take the risk out of being a business owner? Can we just guarantee him a steady, predictable income free of hassle and concern? Give him that and he promises to check the blood pressure and pulse of little old ladies for years to come.

It doesn’t work that way, at least not yet. Administrative costs are probably higher than they need to be. But we should also check out the building costs for the new doctors’ offices and hospital palaces popping up all over Greater Cleveland. All those TV commercials for the newest drugs cost lots and lots of money. The system is also fueled, in part, with unnecessary tests and expensive, futile procedures.

Attack all or attack none.

DAVE

www.bogartcunix.com

The Resurrection Post

Health Insurance Issues With Dave may have run its course. My April post was designed to have been my last. I had called my shot. I had made my prediction for the delivery and payment of health care in the United States. Short of a major U-turn, the changes I have described seem inevitable. So having said what I had to say, it was time to sit back and monitor the conversation.

Published Comments – O! Don’t get me wrong, the post was well read and generated lots and lots of feedback. Sadly, the phone conversations and emails were all private. Thoughtful. Concerned. Interesting. Private. No one wanted to go on record. No one wanted to have his/her ideas examined, the conclusions challenged.

We, all of us, need to continue talking, and even occasionally listening. Well, listening may be just pie in the sky, but I will provide the opportunity for further communication.

In other words, I’m back.

I received an email from a client last week. Janet (name changed to make my attorney happy) is a member of a grassroots organization called The Ohio Project. Would I sign their petition? Did I want to participate? Their goal is to pass an amendment to the Ohio Constitution that would give Ohioans the right to opt our of health insurance, especially government mandated coverage.

I went to the site and read all of it, the amendment, the petition, even the training material. I DID NOT SIGN THE PETITION and I can not participate.

My problem was that I could not find any solutions on the Ohio Project’s website. There is a focus on being “forced” to participate in the system as a responsible player. My perspective has always been that our system won’t ever work if people can opt out up until the moment they need care. This blog has consistently delivered that message, most notably in the August 21, 2009 post. We need everyone to participate, the sick and the healthy, the young and the old.

My client’s concern, first and foremost, was to stop the government from forcing her to buy insurance. I asked Janet what plans The Ohio Project had to fix the system. She told me that they don’t have any solutions and that solutions aren’t their problem. The Ohio Project views the requirement to purchase insurance invasive and unconstitutional. I should note that Janet is well insured. Always has been. Always will be. This is a battle built on principle. Janet, and many like her, have drawn a line in the sand. This is where they have chosen to take a stand.

I strongly disagree with the members of The Ohio Project, but I welcome their participation. There is a natural progression from objecting to a government program or policy, to actively challenging said program or policy, to thinking about a more functional solution. And that is what we need. It has been said that the opposite of love isn’t hate. It is apathy. I am thrilled to have the members of The Ohio Project out and about. I am hoping that their energy will generate new ideas.

So I’m back. Let’s ride out this storm together.

DAVE

www.bogartcunix.com

Over The Tree, Close To The Front Of The Green

I was lucky. My poorly hit tee shot smacked the right tree at the perfect angle and my ball landed in the middle of the fairway. It wasn’t real far from where I had started, and number four at Astorhurst is a dogleg to the left, but I was on short grass and only had one big tree in my path to the green. I wasn’t going to just try to defy the odds with my sand wedge, I called my shot. "Over the tree, close to the front of the green." Good or bad, right or wrong, I always believe that we should call our shots.

What will the new health care legislation accomplish? I have been asked daily for close to a month what I think will happen next. I’ve been working on an answer. The talking heads on TV all seem to know, and oddly enough, the results tie in perfectly with their political persuasion. The Republicans are predicting significant changes in both the House and Senate this fall. They sense real anger. I saw a liberal commentator predict that the Democrats will reap the benefit of the hoards of now grateful constituents, as if Obama and health care is the equivalent of Moses and manna.

So, I think it is time to call my shot. Everyone can be a genius in hindsight. Five years or so from now you will have the opportunity to tell me how wrong I was. I also realize that by taking a particular position and clearly extrapolating results from the recent activities of our President and Congress I will offend, or at the very least, anger, a fair number of my readers. Oh Well. I apologize, in advance, if I anger or offend. Feel free to give voice to your feelings in the comment section. I just ask that you remain civil and to remember that I have readers of all ages.

Rules to live by:
• There are no accidents
• Insurance executives are very smart people
• Insurance companies must balance their books
• Horse-trading is necessary to pass legislation
• If the above is true, then the end justifies the means

It is my belief that the ultimate goal of the Congressional leadership and the President is to have most Americans insured by a government run program and that this legislation is a major first step in that direction. It is also my belief that the major insurance companies are totally onboard.

Is that good or bad? My opinion doesn’t matter. I think the fix is in and our job will be to learn how to game the system.

I know. I know. You’ve seen the political shows where Democratic strategists talked about the insurance company windfall – 32 million new clients. What a bunch of malarkey. The young and healthy can already get cheap health insurance. They don’t need an act of Congress. The young, healthy and lazy can also get cheap insurance. Their moms call my office all of the time. Who we are about to get are the unhealthy. The initial batch have to be both unhealthy and uninsured for over six months. Since the federal government is unprepared, these unhealthy people will be funneled, initially, to the same state high-risk pools they have already avoided. The federal government has set aside 5 billion to help cover them. The insurers, recently forced by states like Ohio, to reduce the premium for their high risk clients, will simply have more losses to be shifted to the healthy population’s policies.

You may have noticed that Massachusetts refused to allow any insurance company price increases. Massachusetts is important. They are about five years ahead of the rest of us. The combination of new taxes on insurance companies, new policy requirements, and the removal of underwriting GUARANTEE HIGHER PRICES. This is very important. There are very few provisions in the legislation to limit or control the cost of health care. Since insurance is nothing more than a middleman, a negotiator, and a paper shuffler, the price of insurance is directly attributable to the cost of care. If the price of care increases unabatedly, the cost of insurance must also increase. Add in maternity and other desirable coverages and you have a hefty jump in price. This is not an accident.

As the price increases, Washington will fan the flames of discontent, blaming greedy insurers for the pain the consumer is feeling. There could be only one solution – The Public Option. If will be at that point that President Obama et al will be forced to create this alternative. Underpriced and underfunded, the public option will gain ground as the insurers reluctantly leave the market.

Why would the insurers, the Anthems and United Health Cares, be in favor of this? What do insurers do well?
• Manage risk
• Shuffle paper

Individual and small group health insurance are crappy businesses. There is lots of exposure, tons of paperwork, and a distribution system that demands way too much service. They are incredibly inefficient. If the eventual public option looks anything like the Swiss cheese we call Medicare, there will be a fortune to be made in SUPPLEMENTS. Low risk, controlled exposure, and sellable from phone units, online, and in the mail, supplemental policies are very profitable.

The federal government would be forced to contract with the major insurers to process a new mountain of paperwork. Pure profit. The contracts would be on a cost plus basis.

The final profit center for the major insurers will be for those people who wish, with the aid of private insurance, to opt out of the government system. This grouping of new products will not be price sensitive and should be particularly profitable.

The final legislation to make all of this happen will mirror the Medicare Part D debacle. Did the Republicans who pushed through Med D really care about doughnut holes or that my clients would be paying more for their medications? Of course not. Did they know that the legislation was a goldmine for the pharmaceutical industry and the major insurers? Probably not. Nor do I think that they cared. The Republicans had a goal, six years ago, to run on a new entitlement for senior citizens. They certainly weren’t going to let a little horse-trading get in the way. Expecting anything different from our Democratic leadership is unreasonable.

The end will justify the means. I am positive that most involved will feign total surprise at the outcome. They may even claim, facetiously, that they were forced by the market to act.

Again, is this good or bad? I don’t know. I am offended by the lack of honesty that I perceive. If this really is such a good idea, sell it. Go before the American people and tell us why we need to go in this direction and how we will pay for it. Since that didn’t happen, I doubt that the outcome will be all that great. Of course, any major political change in the next two years could negate all of this. That wouldn’t guarantee better outcomes, just a different cast of characters and results.

I gripped my sand wedge, swung as hard as I could, and lifted the ball up through the branches. I didn’t quite get over the tree as much as I got through it. The ball landed in the fairway just before the green.

Got to call your shots. Got to tell people what you really believe.

DAVE

www.bogartcunix.com

We Can Always Count On Florida

Health Insurance Issues With Dave has been on a self-imposed hiatus. Two and a half weeks with no posts. This was my small attempt to lower the noise level. The country appeared to be suffering from health care fatigue and I decided to be part of the solution as opposed to being a part of the problem.

I’m back. I simply can not resist writing about Dr. Jack Cassell and Congressman Alan Grayson. Everything you need to know about the recently passed health care legislation is contained within the story of these two gentlemen. And yes, to tell the whole tale we need both of these otherwise well-educated, bright guys who suddenly turned stupid once they became infected by the health care debate.

Dr. Jack Cassell is adamantly opposed to the recently passed health care legislation. Why? Who knows? Could be on general principle. Could be because Congress failed to “fix” Medicare again last week and specialists, like urologist Dr. Cassell, are facing a 21% cut in reimbursements from the federal government. As I said, who knows. In an effort to share his displeasure, Dr. Cassell posted a typewritten note that read: "If you voted for Obama, seek urologic care elsewhere. Changes to your healthcare begin right now, not in four years."

Tacky? You betcha. A little heavy handed? Sure. But is it really a big deal? I don’t think so. First and most importantly, we still have a secret ballot. He isn’t asking people to tell him who they voted for in the election. He has no way of knowing whether the patient voted for the Democrat, the Republican, or failed to participate in the election process. Sure his waiting room is littered with Republican pamphlets detailing one side of the debate. But, this is still the United States. If you don’t like his politics you have every right to find another doctor.

My daughter Jennifer was born twenty-nine years ago this month in Saint Elizabeth’s Hospital in Youngstown, Ohio. St. E’s was the best hospital in the area and Jen’s mom had had problems in the past. Every single room in this Catholic hospital had a crucifix on the wall. Hope was in there for two days. Frankly, we found the wooden statues on the walls a bit disconcerting. But we didn’t make a fuss and we didn’t ask them to take them down, not even in our room. If you wanted the doctor and the facility, the religious decorations were part of the deal.

Of course, Dr. Cassell couldn’t keep this discussion at that high a level. “I think there’s a real, real problem that’s going on here in this country and unfortunately Obamacare fatally compromises my ability or any doctor’s ability to uphold the Hippocratic Oath.” Not enough hyperbole for you? How about this gem of a sign he posted above a stack of Republican literature describing the bill? "This is what the morons in Washington have done to your health care. Take one, read it and vote out anyone who voted for it."

If you are keeping score, we have doctors who won’t be able to properly treat their patients and the morons responsible. Would the other side laugh at this silliness and let the whole issue disappear within a couple of days? Of course not.

First to weigh in was Dr. William Allen, a professor of bioethics, law and medical professionalism at the University of Florida’s College of Medicine. A man with a great bio but no patients and who will not be immediately impacted by the changes in the law, Dr. Allen is quoted as saying that even though Dr. Cassell hasn’t turned anyone away and hasn’t even quizzed his patients, he is still “pushing the limit”.

Pushing the limit? Our friends on the left were hoping for a stronger rebuke. Who could be counted on to take this to the illogical extreme? The safe bet in Central Florida is Orlando Democrat Alan Grayson. He is remembered for this constructive remark about the Republican’s program from last summer, “If you get sick, America…Die quickly.”

Congressman Grayson appeared on Countdown With Keith Olbermann yesterday evening. I skipped the Duke / Butler game to watch the two of them harrumph over Dr. Cassell’s sign. Grayson did not disappoint. He planned to complain to every medical board and government authority available. In the original Orlando Sentinel article Congressman Grayson is quoted as saying, “Maybe he thinks the Hippocratic Oath says, ‘Do no good.’ If this is the face of the right wing in America, it’s the face of cruelty…Why don’t they change the name of the Republican Party to the Sore Loser Party?”

And that is the whole issue with the other extreme. Those people who disagreed with this legislation, for whatever reason, are relegated to the “right wing”. We should all be grateful that the bill passed. We should get over it and move on. An excellent example would be the way so many of us in the middle and on the left got over it and moved on with our lives after President Bush declared Mission Accomplished and ended the war in Iraq. G-d knows Mr. Olbermann hasn’t mentioned it since. We should all model our future actions after his measured response.

Vice-President Joe Biden was correct. This is a big deal. It is huge. And yet, the details are in short supply and the costs seem to grow daily. The newest exaggeration comes from the Republicans who claim that the IRS needs to hire 16,000 more agents to monitor compliance. It is probably twice more than we actually need, but it really doesn’t matter. One side will use it as a rallying point while the other side will conveniently ignore that they haven’t properly funded any new agents.

And so it goes. We are still in campaign mode. The two extremes are scoring points and wasting our time and millions of dollars of our money. In a perfect world, Congressman Grayson would suffer a mild bladder infection the next time he is back in Florida and you know who would be on call that weekend. Not that I would wish for anyone to be sick, but they deserve each other.

And we deserve better.

DAVE

www.bogartcunix.com

Co-opted and Placated

Dennis Kucinich is very good at being Dennis Kucinich. An acquired taste, Dennis never pretends to be anyone but Dennis. I’m not a big fan and I seldom agree with him, but I respect his unrelenting desire to fight windmills. The Cleveland Plain Dealer carried an op-ed piece written by Congressman Kucinich on March 14, 2010 that was vintage Dennis.

Congressman Kucinich is a strong advocate of a single payer health care system. He is not bashful about this. His distrust of insurance companies in 2010 rivals his love affair with the banks and CEI in the late 70’s. He is nothing if not consistent. As a leading member of the Progressive Caucus of the Democratic Party, he added numerous amendments to the House’s health care bill that would have pushed our country in a direction most of us would want to avoid. As his extreme measures were stripped from the bill, he and his fellow Progressives swore that they would not vote for any bill that failed to include a strong public option.

We’ve discussed the public option several times over the last year. There is little need to revisit the weakness of this concept again in this post. What is relevant today is Congressman Kucinich’s adamant opposition to the poorly written bill passed by the U.S. House of Representatives and the unrestrained vitriol he unleashed on the hodgepodge that emerged from the Senate.

As President Obama and Speaker Pelosi rushed to find 216 votes to pass the Senate bill in the House, Congressman Kucinich suddenly became relevant. The Today Show and other morning broadcasts, the Sunday new shows, and the weekday opinion programs all discovered Dennis. Congressman Kucinich was going to vote NO, even if he was the deciding vote. Fox News and Michael Moore (!) applauded his gumption, though for entirely different reasons. Democratic Party leaders rushed to Countdown with Keith Olbermann and the Rachel Maddow Show to declare that Dennis Kucinich led a group of one. They sneered at his presidential runs and other solitary crusades.

What a difference a plane ride makes. President Obama visited Strongsville this week. Several local members of Congress got a ride from Washington aboard Air Force One. Air Force One, the magic plane. Do you remember the Newt Gingrich melt down after Bill Clinton gave him a ride on AFO? Dennis didn’t have a chance. By the time the plane landed, Congressman Kucinich was UNDECIDED. His move to YES was a forgone conclusion. Now cited for his leadership just a week after he was dismissed by the party’s chiefs, Dennis Kucinich was co-opted. It turns out that some strongly held positions are no match for a really cool plane ride.

My representative in Congress is Marcia Fudge. Many of my fellow insurance agents have contacted their Congressman. Most of my clients are small business owners and some of them have tried to talk to their representative. I know that other chamber of commerce presidents have called Congress. Not me. I resisted calling Congresswoman Fudge as a constituent, agent, business owner, or even as President of the Beachwood Chamber of Commerce. Why? There didn’t seem to be any reason to waste the time. Marcia Fudge’s vote was never a doubt. I couldn’t see any value in the exercise and I didn’t want to get aggravated.

I can’t explain why, but I changed my mind on Monday. Maybe it was Dennis’s conversion. Perhaps it was the mindless attacks on my industry or my disdain of smoke and mirrors. Whatever the reason, I finally contacted Congresswoman Fudge’s office on Tuesday. I spoke with legislative aide Beverly Charles.

I started our conversation by establishing my Democratic Party bona fides. Regular readers of this blog know that they are extensive.

I asked Ms. Charles a very simple question. “What is Congresswoman Fudge’s position on the health care legislation?” I was told that she was UNDECIDED. I was surprised. I talked with Ms. Charles for about thirty minutes. She was fully versed in the Speaker’s talking points. Her knowledge on the subject appeared to be a mile wide and an inch deep. She emailed her thanks the next day. I offered this blog and the opportunity to meet in person to provide more useful info.

Was Congresswoman Fudge really UNDECIDED? Absolutely not. According to the New York Times and Doctors for Health Care Solutions, she had already made her decision. DOHCS had been asked to have 75 members, all wearing white lab coats, to appear on short notice to serve as stage props when Marcia holds her press conference. This assumes that she gets a press conference. Since she was always counted as a YES, her announcement is hardly news. But my question is does Ms Charles know as much about her boss’s position on the issue as she does about this legislation, or was I simply being placated? I think we know the answer.

President Obama asked Congress for Courage at this week’s pep rally in Strongsville. There has been very little courage exhibited by this Congress.

No Short Cuts

In “Dreams From My Father”, future president Barack Obama introduces his readers to his entire family. We meet both of his grandfathers, Stanley Dunham of Hawaii by way of Kansas and Hussein Onyango Obama of Kenya. We learn how these two men influenced both him and his father. The central theme of the book was about making your own way in the world, a task made more possible with hard work and clear thinking. Every corner cut resulted in failure. Every job done well led to greater success. I just finished the book while on vacation. It was terrific.

In fact, the book should be read by lots of people. I’m going to give my copy to my girlfriend’s son, Alec. Someone else who should read the book, someone else who might benefit from the lesson on “Dreams From My Father” would be the guy who wrote it, Barack Obama.

President Obama was on TV again this morning. The news was showing a clip from yesterday’s pep rally. Can’t tell you where this one was. They all look alike. The president rails against the evil insurance companies. The President complains about insurance company rate increases. Someone is brought up to cry about losing his/her insurance after getting sick and getting dropped for not paying the premium. The solution to all of our problems is to pass the BILL. Crowd cheers. Cut to commercial.

Will someone please call Barack Obama? We need the young, brilliant, hard worker to push aside our current president. We need real leadership, not just on this issue, health care, but on jobs, finance reform, national security, and all of the other major issues of our time. Right now we have slogans and scapegoats. We are cutting corners and racing towards disaster.

I’ve been busy this week and have only seen bits and pieces of Countdown with Keith Olbermann and the Rachel Maddow Show. Both had guest hosts. Here is what I saw and what you may have missed:
1. Dennis Kucinich (D-OH) said “The insurance companies are the problem”.
2. Dr. Howard Dean said “The insurance companies are the problem”.
3. Bart Stupak (D-Mi) is leading a group of 12 anti-abortion fanatics.
4. Diana Degette (D-Co) leads the Pro-Choice Caucus, 190 strong, who won’t give up any more ground.
5. If the BILL doesn’t pass, it will be all (fill in the blank)’s fault.
6. Liz Cheney is so much like her father, even Kenneth Starr is repulsed. (Nothing to do with health care, but truly weird and interesting.)

We are contemplating the overhaul of nearly 20% of our economy and the participants are locked in their little battles, digging in their heels, and shouting out their slogans. No matter how many of these shows you watch, you will never learn how we are going to provide health care for 300+ million Americans and, more importantly, how we are going to pay for it. Really. Taxes that kick in eight years from now aren’t real. Creating massive changes and hoping that the good stuff, the parts you like, aren’t impacted is simply childish.

WWOD? What would Obama do? Maybe the real question is what would the real Obama do? The guy from the book might have, like his father before him, first tried to just bluff his way through the battle. But once he encountered a set-back or two, the book’s Barack Obama would have realized that he needed to fully apply himself to the task. He would have succeeded by out-thinking and out-working his opponents. He would have built a consensus and found a feasible solution to our health care morass. Not a plan that merely sounded good, but one that actually could succeed.

We’ve seen the bluffs, the set-backs, and the short cuts. The guy demonizing the insurance companies isn’t going to get the job done. Now is the time for the other Obama to emerge. The one we elected. The one we, as a country, need.

DAVE

www.bogartcunix.com