Friday, December 30, 2011

Clear As Mud

When is selling not selling? Where is the line between helping your customer and primarily helping yourself? Determining that becomes harder each day.

One of my clients needed to talk. She had received a disturbing phone call at her home and wanted to know if she had handled it correctly and if I knew the back story. Mary (not her real name) was contacted by a national pharmacy. We’ll call the pharmacy chain Mega Rx. Mary was advised that her insurer would no longer cover medications for her and her family from their local Mega Rx. Since they knew that Mary would hate to loose access to Mega Rx, they would be happy to connect her to someone who could help her find an insurance policy that would allow her to retain them. All she had to do was stay on the line. Mary thanked them but said that she already had an agent and hung up.

Think about this for a second. The national drug store chain had fought and lost a battle with a national insurer. They were mining their records for anyone who had that insurer and had had a prescription filled in the last year or so. And if Mary was gullible and not paying attention, she might have somehow been talked into different insurance that would have definitely covered Mega Rx, but might not have covered her doctor, or given her and her family the same level of coverage.

The appointment to change individual health insurance policies usually takes an hour in my office and involves a lot more than whether or not Mega Rx is in the network. This silliness is taking place under our current set of rules. The states and the federal government are still writing the new rules. Some people don’t think we really need licensed agents. Why not let anyone sell insurance?

I just spent twenty minutes completing my application to renew my license to sell life and health insurance. I had to prove that I had completed 21 hours of continuing education and 3 additional hours of ethics training in the last two years. I actually had a total of 42. That does not include the 7 to 9 hours per year for Medicare products or the mandatory additional training for long term care coverage. I then attested that I haven’t been convicted of any crimes, haven’t had my insurance license suspended or revoked, and that I don’t owe back child support. This is true. You can not sell insurance in the State of Ohio if you owe back child support. I paid my $5 and I should get an approval notice some time next week.

All states have seen a value in licensing insurance agents. It is obvious that one value of the requirements is to weed out the part-timers. The public is better served by committed professionals who are willing to take the time and effort to stay current. And though insurance agents (me included) will never be confused with rocket scientist, we do serve an important function in the market as we help the insured public acquire coverage and navigate the process to get the most from their contracts. The insurers long ago (begrudgingly) accepted our value.

This brings us to the Patient Protection and Affordable Care Act (PPACA). The authors of this legislation did not believe that the public is capable of calling an insurance agent or company or shopping online to purchase health insurance. Since finding health insurance was so difficult, insurance exchanges, a marketplace, would be created in each state. As you can see from the Obama administration’s website, the exchanges, an additional layer of bureaucracy, is going to save you money. And how will you get to the exchange and who is going to help you choose the right type of policy for you? That would be the Navigators.

The PPACA is pretty sure that almost anyone that can fog a mirror is capable of doing my job. Any employee of trade association or union can walk you through the process. In fact, the PPACA spends more time on the notion that the Navigators can not be compensated by the insurers than it does on training or qualifications.

A well publicized letter from David M. Casey, Senior Vice President of MAXIMUS, a company that specializes in Medicaid enrollment, details the Patient Protection and Affordable Care Act’s aversion to professional insurance agents.

John Doak, the Oklahoma Insurance Commissioner, is succinct in his judgment. He has consistently challenged the federal government’s intrusion into insurance regulation and health insurance. He has asked what kind of training the Navigators will have in insurance products, health information privacy regulations (HIPAA), or ethics. And of course we already knew the answer, none.

The other question is “Who will be paying the Navigators”? You have two choices. Either the Navigators eventually become employees of an endlessly growing government program, or they are employees of organizations who have something to gain by you and I being steered into one policy versus another. And that brings us back to Mega Rx. The major pharmacy chains are currently exploring ways to have employees become Navigators under the future exchange program. Will they be impartial? Will they be looking out for your best interest? Will the sun rise from the west tomorrow morning?

This is too easy and way too transparent a case of conflict of interest. What if a major insurer is donating money to your local trade group? The employee of that trade group would work to navigate people to that company’s policy. There is a lot of money involved. This won’t be subtle. And it won’t be easily traced.

So when you get that phone call from the drug store, or the doctor’s office, or the Chamber of Commerce, and you will one day, ask yourself why. Slow the process down and try to determine who is getting paid and for what.

In the interest of creating transparency and simplicity, we have failed at both.


Thursday, December 15, 2011

The Day After The House Burned Down

This is a post about someone with cancer. I have not met Ms. Ward, nor do I think that I ever will, but I wish her a successful recovery. This post may take issue with some of her choices and many of her conclusions. These differences should not be interpreted as personal. They are not. Too many of our discussions have devolved into the personal as they abandon fact and reason. This blog champions a polite discussion of the facts.

Spike Dolomite Ward has cancer. Ms. Ward is a forty-nine year old married mother of two. She lives in California. This past Sunday’s Plain Dealer included an article she wrote that initially appeared in the Los Angeles Times. Ms. Ward explained why she hasn’t had health insurance for over two years. Trust her, it is not her fault.

The key element, the point that requires ten paragraphs to justify, is that she has been saved by President Obama and the Patient Protection and Affordable Care Act (PPACA). How you ask? Will the President be administering the Chemo? No, but close. As we have discussed before, the PPACA included the creation of guaranteed issue policies that cover pre-existing conditions for people who have been uninsured for over six months.

  • Significant medical condition like cancer? Check.

  • About to have lots of expensive treatments? Check.

  • Uninsured for over six months? Check.

  • Insurance now seems like a really, really good idea? CHECK.

I completely understand the need to purchase homeowners insurance now that my house has burned to the ground.

Please read Ms. Ward’s article. It is entirely possible that the laws in California are very different from those here in Ohio. It is also possible that there is a touch of exaggeration and hyperbole in those first ten paragraphs. Don’t get lost in the details. They aren’t relevant. This post is about the uninsured and the individual mandate.

We are, or at least should be, responsible for our choices. Ms. Ward is not alone. There are millions of uninsured Americans. The poor have Medicaid, a program that should have received a lot more attention in the last two years. It is the working poor that are falling through our system’s cracks. There is also a large segment of the population who simply choose to spend the money on other stuff. I refuse to speculate as to Ms. Ward and her family’s status.

Ms. Ward is correct. Her life choices, her insurance choices, her and her husband’s job choices could have had devastating consequences. Instead, someone else, you, will pay the bills. Any solution that includes guaranteed issue and the complete coverage of preexisting conditions must include a mandate that requires everyone to have insurance.

The individual mandate has been both championed and disparaged by everyone from Newt Gingrich to Barack Obama. One day they embrace it. The next day they flee from the concept. As an agent, as someone in the system for thirty-three years, I am convinced that requiring people to participate is the only way a guaranteed issue plan would work. This is not limited to private insurance programs. A government plan is just as dependent on universal participation. That is why Medicare Part B and Part D penalize late enrollees.

All of the candidates expressed their hatred of the individual mandate at last week’s Republican debate. I understand. They are running for president. But the time has come to stop telling us that you hate “Obamacare” and to instead offer a realistic alternative. Better yet, there are lots of serious people waiting to hear any viable option that doesn’t include an individual mandate.

Whether or not an alternative is ever proposed and passed, we wish a full and speedy recovery to Ms. Ward. And we wonder how in the world we can afford all of the other Spike Dolomite Wards we are going to be supporting.

Monday, December 5, 2011


We all know people who have invested in $2,500 clothing racks. OK, the store called the equipment an exercise bike or a treadmill. But sitting idly in the bedroom with clothing draped over it, the apparatus is obviously a clothing rack. What a waste of money! If only these people had the discipline to take full advantage of their investment.

Recent studies performed by researchers at Duke University have proven that the above problem may not be shared by physicians. If a doctor purchases equipment, such as expensive heart-testing or imaging equipment, they use it. In fact, it appears that these doctors may be using their equipment regardless of whether the patient needs the testing or not.

That’s what I call discipline.

USA Today reported this past week about a Duke University study of 500 MRI scans that had been performed on patients with lower back pain. The researchers were trying to determine whether doctors who own the equipment order more tests than those who don’t. You bet they did. Almost twice as many normal results (106 vs. 57) were found on scans ordered by doctors with an economic incentive than by those who didn’t.

The article notes that MRI scanning equipment carries a price tag of over $1,000,000 and that the patient or insurer is charged about $2,000 per test. Once you’ve got the equipment, you might as well use it, just to be safe.

Consumer Reports carried a similar story in early November. Duke University researchers reviewed the health insurance records of 18,000 health patients. The original study was published in the Journal of the American Medical Association.

“…the researchers found that patients of doctors who billed for both technical and professional fees – an indication that the doctors owned the medical equipment themselves – were more than twice as likely to undergo a nuclear stress test and more than seven times as likely to undergo stress echocardiography than patients of doctors who did not bill for those fees.”

A July 25th article in Washington Post notes that unnecessary tests don’t just waste money. There are also the risks of false positives that lead to further unneeded procedures including surgery.

Whether we are discussing lower back pain or heart problems, the patient is always his/her best advocate. But when you are in pain or when you have been diagnosed with a heart problem and coming to terms with your own mortality, are you going to ask the doctor if a test is really necessary? Or, are you going to do what you are told, especially if the test is being paid by your insurance?

This is part of cost containment. It doesn’t matter whether insurers or the government is paying the bill. An aging population is going to have more conditions, not less. And doctors, unchecked, are going to order more tests, not less.

There are doctors that will point to the risk of lawsuits as for their motivation to order so many tests. Yes, tort reform is also an important part of cost containment.

As of today, December 5, 2011, there has been precious little done to control costs. The authors of the Patient Protection and Affordable Care Act may not understand why the price of health care continues to rise. But then again, there are lots of suburbanites who don’t understand why they haven’t lost any weight. They bought the StairMaster. It is in their bedroom. Under the towels.



Friday, November 18, 2011

Heads You Win, Tails I Lose

It is November in Northeast Ohio. Homeowners are faced with an annual decision – buy a new snow shovel, buy/tune up the snow plow, or hire a plowing service. I was lucky enough to have always had a snow service when I had my house in Shaker Heights. For $250 a guy in a pick-up truck would magically appear every time there was as little as 2” of snow on my drive. He would clear the drive and make it safe for me and my family. Sometimes he would even sweep the snow off the walkway. $250 for six months. If it snowed only three times - $250. If it snowed thirty times - $250. I wasn’t purchasing the number of times he visited. I was buying peace of mind and security. And if it never snowed in Shaker Heights? Let’s not be silly. One year’s easy winter would surely be followed by a snow belt classic.

If you believe, as I do, that the Patient Protection and Affordable Care Act (PPACA) is designed to change who pays for health care in our country, then you had been waiting anxiously for yesterday’s decision from the Obama administration. Florida has aggressively fought the President’s legislation from day one. The latest salvo was a special request for a waiver of the 80% Minimum Loss Ratio (MLR) regulation. This special waiver has required a mound of paperwork and nearly a year of preparation.

And the verdict from the Centers for Medicare and Medicaid Services (CMS) was (drum roll please) - - - Come back in 30 days.

First, what is an 80% Minimum Loss Ratio? In the simplest of terms it means that for ever dollar of premium an insurance company receives, it must spend 80 cents on health care claims. That leaves 20 cents for taxes, administration, reserves, marketing, advertising, and profits. If the consumer has a good year and has fewer claims, the law requires the insurer to issue a rebate of the excess premiums. If the consumer has a really bad year, oh well.

I think you can see where this is going. Most of my clients are small businesses with fewer than ten employees. Some have only one or two employees. Many of my groups have little to no claims per year, while several of them more than make up the difference.

If a small business consists of three families, each paying $1,000 per month, we have an annual premium of $36,000. What happens if one of the spouses has a quadruple by-pass at $180,000? Where does the insurer get that money if it is returning excess premiums each year to the healthy clients?

The goal is to have a loss ratio between 65% - 80%. This goal is for the entire book of business, not on a client by client basis. We are pooling the risk, sharing the possibility of major accidents and illnesses among a large group of people. The MLR regulation effectively ends that. And in the end, it effectively ends private major medical insurance.

Insurers are threatening to pull out of the states that don’t get the federal waiver. At the very least, they will be forced to significantly restructure their product offerings. It is not an idle threat. This is all part of the process that began in March of 2010.

The Supreme Court will soon hear arguments about the individual mandate, a concept championed by Newt Gingrich and Bob Dole in the early 1990’s and pilloried by the Republicans today. This is a side-show. The Minimum Loss Ratio rulings will have far more impact on who pays for your healthcare in 2015.

I could have purchased a “pay as I go” snow service when I was a homeowner. What I couldn’t afford back then and can’t afford now is “pay as I go” healthcare.


Thursday, November 3, 2011

An Angry Mob

The National Journal, a non-partisan Washington based news magazine, published the story as if it was news. Poll: Majority of Voters Want Medicare Funding Left Untouched The first paragraph noted that 83 percent of the respondents oppose cuts to Medicare and higher beneficiary copayments. 70 percent believe that the government should be more active in fighting waste, fraud, and abuse in both Medicare and Medicaid. It wasn’t until the second paragraph that we got the rest of the story.

The poll was commissioned by Fight Fraud First. One of the members of the collection of groups that created Fight Fraud First just happens to be AARP, the same organization that sponsors an endless series of television spots scaring and/or rallying senior citizens.

So we have three questions.

  1. Is it at all surprising that 83% of the population (assuming that the poll wasn’t weighted with seniors!) want as much money and benefits as they can get with little or no charges?

  2. Would you expect a poll conducted by an organization named Fight Fraud First to release the results of a poll that didn’t strongly endorse the concept of fighting fraud first?

  3. Was this news?

Since the first two questions are obvious, allow me to answer the third. NO!

We want painless solutions to all of our problems and we are at least 83% convinced that someone else should pay for the debts we have all created. I’m not sure if this mindset can be traced to the concept of paying for two wars by shopping or if it is simply more prevalent in today’s society, but it is everywhere we look.

I was in New York City a few weeks ago and had a chance to visit the Occupy Wall Street. Yes, it did remind me of the anti-war protests of the late sixties and early seventies. But at the risk of ticking off most of my readers, I have to tell you that there is little difference between the Occupy Wall Street crowd, a Tea Party rally, and a group of Libyan soldiers firing their rifles straight up into the air with little regard to where the bullets will land. Within each group is a small core that understands and can discuss the issues. There is also a larger faction that has a propagandist’s view of the group’s concerns, but is totally committed for the moment. The rest, the vast majority, have nothing better to do and no place better to be.

The links in the above paragraph will provide you with plenty of laughs whether you are on the Right or the Left.

In a perfect world, in the ideal democracy, those masses gathering at Tea Party rallies and camping out at Occupy sites around the country would be engaged in intellectual policy debates. These citizens would be working hard to find solutions to our country’s economic woes.

That is not happening.

What we have, instead, are people desperately attempting to assert their relevance. It appears to be very easy to confuse one’s self-interest with what is allegedly in the U.S.’s best interest. And this leads us to the current health care debate.

The Patient Protection and Affordable Care Act (PPACA) attempts to change who pays for health care, but does nothing to control the cost of care. Changing the payer doesn’t solve our problem of spiraling health care costs.

The current financial debacle has forced some in Congress to start thinking about reigning in costs. This has resulted in the special interest groups to snap into action.

  • The American Hospital Association has a woman staring into the camera, and our souls, decrying any cuts that could endanger her father’s health.

  • AARP’s commercial supposedly speaks for 50 million seniors who are united to oppose any cuts and will vote, as one, against anyone who dares oppose them.

  • The A.M.A. (American Medical Association) is spending big bucks to remind you that doctors are on your side.

Luckily, as Ohio residents we have been spared the finger pointing and shouting of the Republican presidential primary ads. Better Iowa than us.

The next year is very important. Will the PPACA survive? My guess is still Yes. The rules and regulations are being written and imposed now. It will be very difficult to simply reverse all of this, even if anyone wanted to, in January 2013. What you need to watch, what you need to ask are what cost containment measures, if any, are being implemented?

There is a lot of noise out there. People are marching to retain the life they think they have. Or they might be marching to claim their share of the American largesse that has eluded them. Many of these same people will soon be whipped into action to save their local hospitals or to protest a cut in nurses’ wages. The one constant throughout all of this will be the absence of personal sacrifice.

Ask people to pay more? That might create an angry mob.


Wednesday, October 19, 2011

Pulling The Plug

This blog has campaigned for transparency, honesty, and basic accounting principles. This isn’t a Democrat or a Republican issue. This isn’t Left or Right. Asking for our elected officials to perform at a higher level may, at times, appear child-like and na├»ve, but why would we work so hard, investing our time and money, if we didn’t believe that we were trying to help our country find our best leaders?

Flying to New York this past weekend gave me extra time to read. I need to share an opinion piece from The New York Times and a memo from Health and Human Services. This will take a few minutes. It will be time well spent.

Jane Gross, author of A Bittersweet Season: Caring for Our Aging Parents and Ourselves, discussed the last years of her mother’s life in The New York Times. The article, How Medicare Fails the Elderly, detailed the medical care Medicare paid and the hundreds of thousands of dollars of services that depleted the family’s savings. It was brutal. Ms. Gross lays bare the inefficiencies of a system that rewards unwarranted expensive procedures that may more successfully enhance the medical provider’s life than the patient’s. Please read the article. It is a difficult read and there wasn’t a happy ending.

The memo is also about an ending. Kathy Greenlee, CLASS Administrator, sent a memo to the Secretary of Health and Human Services, Kathleen Sebelius, recommending that the program be suspended. CLASS is the acronym for the Community Living Assistance Services and Support Act. Ms. Greenlee was forced to report that there was no logal way to make this program work.

This was not a shock.

The CLASS Act was an important part of the Patient Protection and Affordable Care Act (PPACA). It was important to consumers because it promised to help pay for long term care. It was even more important to the President because, through a bit of accounting sleight of hand, the CLASS Act generated a $70 billion dollar surplus during the first ten years. That money would cover $70 billion dollars of deficit from the PPACA. See, revenue neutral!

Ms. Greenlee was forced to admit that the numbers did not add up. A voluntary program that didn’t have any underwriting couldn’t be actuarially sound the way the law was written. With no public funding available and healthy people not forced to participate, the independent actuaries predicted disaster. Thankfully, the program will be pulled now before any more money is wasted.

The need for long term care planning and the cost of that care are the themes that tie these two readings together. My fixation on transparency is why I have brought them to your attention.


Monday, October 3, 2011


Prohibition was about human perfectibility, that humans can be perfected. You could have the perfect marriage if you could eliminate alcohol. from Ken Burns' Prohibition

I watched Ken Burns’ Prohibition on PBS last night. A group of people decided what would be best for everyone else. Armed with moralistic fervor inspired in equal parts by their G-d and their fear of others (immigrants and non-whites), they campaigned to eliminate someone else’s vice. And they succeeded in part until they failed entirely.

There is a shocking parallel between the Prohibition movement of one hundred years ago and today’s health care debate.

Part of what drives the current discussion is this concept of perfectibility. If only the profit motive was removed from the delivery of health care, if access was unlimited, then no one would die before his/her time.

  • Can you really remove profit from health care?

  • How unlimited is unlimited?

  • When is it our time?

The simple answers are - NO!, Who knows?, and Gosh, what a silly question.

Doctors need to be paid. Medical equipment suppliers need profits to build their businesses. Pharmaceutical companies risk millions to develop new compounds that may cure illnesses and alleviate pain and suffering. The insurers play a role in all of this, too. Eliminate them, the market organizers, and their function will have to be performed by the government. You may debate whether that would be more efficient that the businesses, but to deny that money is a key element in the delivery of health care is to deny reality.

Heart transplants? Liver transplants? Any age? Any health status? Should a 75 year old overweight diabetic with bad lungs from years of smoking stand in the front of the line waiting for a new heart? There have always been, and always will be, some limits to access. What we have not had, as a country, is an open, honest discussion about limits. We are not talking about death panels. We are talking about realistic expectations. What is society’s responsibility to the sick and injured?

The last part of this is the most difficult. Who amongst us wants to address our own mortality? No amount of health care would keep us alive forever. We are not machines. Yet there are people who claim that changing our health care delivery system will magically enhance our life expectancy.

Which returns us to this concept of human perfectibility. Can we improve the payment and delivery of health care in the United States? Absolutely! The first steps will be transparency and an honest discussion about achievable goals.

Now would be a good time to start.

Thursday, September 15, 2011

Shell Game 2.0

It is important to remember that everything works in theory. Communism, in its purest form, is just as effective as Capitalism, in theory. Reality is a much different story. The Russians and Chinese are now embracing many of the benefits of Capitalism just as the U.S. faced-down the Robber Barons and put an end to such practices as child labor a hundred years ago.

Reality has a habit of rudely poking holes in theories. My favorite piece of Swiss cheese is the Patient Protection and Affordable Care Act (PPACA). Today we are going to revisit the Preexisting Condition Insurance Plan, the stop-gap measure to provide access to coverage to the long-time uninsured.

Eighteen months and millions of dollars later, it might be difficult to recall that the main justification for completely remaking our health care system was to provide coverage for the uninsured. Remember the uninsured? They were of real concern two years ago. The PPACA was supposed to cure this problem.

Last June, in a post entitled The Shell Game, I discussed the five billion dollars the federal government had allocated to the Preexisting Condition Insurance Plan. Of more local relevance, $152,000,000 was given to Ohio for the four year interim program. Even though Ohio had about 17,000 chronically uninsured, state officials were thrilled that $152,000,000 would help 5,000 people get insurance. I felt that they were a touch optimistic.

Theory, meet Reality.

How’s the program working? Initial projections from the Office of the Actuary of the Centers for Medicare and Medicaid had as many as 375,000 uninsured Americans rushing the states and jumping at the opportunity to acquire heavily discounted coverage. As of April that crush was only 21,454. Ohio, with almost 1800 enrollees, is one of the most successful programs. Don’t worry. We may not insure that many people, certainly no where near the governments rosy projections, but all of the money will be spent.

Sunday’s Cleveland Plain Dealer detailed the difficulties Ohio and Medical Mutual of Ohio, the state’s contractor, are having difficulty raising prices and limiting access. The biggest problem was that no one was prepared for the shocking reality that really sick people rack up big claims.

Now we’re paying actual claims and those claims have come in much higher – the loss ratio is much higher – then had been projected, said Carrie Haughawout, assistant director for health policy for the Ohio Department of Insurance.

The claims for 1800 people were more than what they thought 5,000 unhealthy people would incur? That is hard to imagine. The simple math in last year’s blog post showed that premiums for a 60 year old male would need to be around $800, with the subsidy, to have a chance of covering the cost of care. The Ohio High Risk Pool is charging between $416 and $458 for a 60 year old non-smoker! That isn’t even close.

The PPACA does not include any meaningful cost containment. There is also no underwriting and no exclusions for preexisting conditions in the PPACA’s planned future which begins in 2014. So, as theory invades reality, one day all of these incredibly unhealthy individuals will be moved into the common risk pool. How will this impact the premiums you or your employer pays for health insurance?

The theory is that the unhealthy will disappear in the sea of doctor avoiding, health obsessed, average Americans who will hardly notice the difference of adding a couple hundred thousand chronically ill individuals into the mix. And besides, now they will be paying premium instead of just invading the E/R and counting on the kindness of strangers to pay their bills. Yeah, right.

The High Risk Pools, the Preexisting Condition Insurance Plan, was a dry run for the future of the PPACA. No real planning. Not nearly enough honest, transparent public discussion. An idea that meant well, but was underfunded and was neither properly explained nor promoted. The Preexisting Condition Insurance Plans were projected to do so much at what may have almost seemed like a reasonable amount of money. Instead, we have another program that has fallen tragically short.

Reality, meet Theory.


Just a reminder, this post also now appears in the WordPress format on my website. It appears that more people are reading it there and that is where most of the comments are posted.

Thursday, September 8, 2011

The Future Is Fine. I'm Concerned About The Present.

I'm sitting outside of Club Isabella waiting for a friend. There are six medical students at a near by table enjoying food, friendship, and a moment away from their daily stress. What do they talk about? They joke and laugh about doctors and classes, routines and procedures, and their daily grind. They are an interesting group. Two are women. Four appear to be of Asian descent. One, a tall thin white guy with his baseball cap on backwards, appears to have been delivered to us from Central Casting. They wave and shout to their friends walking by. They are incredibly normal.

I find this terribly reassuring. At 56, I am looking at the people who will be caring for me 20 years from now. They are bright, engaged, and sound like they are actually enjoying their work. This is important. If all of this work, time, and effort is just to get a title, a job, and a paycheck, they will never be fulfilled. And they probably won't be very good at the practice of medicine. One can only hope that their discussions of cadavers (over dinner!) is a precursor of great careers.

This concerns me, the general happiness of physicians, because so much is changing in the practice of medicine. Many previously independent doctors are now, in 2011, employees of the major hospitals. Some have adjusted to this change. Some doctors embraced this. Many, however, have not. Being an employee, even a highly compensated one, is not the same as being your own boss. There is a certain freedom in being an independent business owner. And other doctors, like radiologists, have seen specialty treated like a commodity.

I'm not ready to have my health dependent upon the lowest bidder.

Our young doc-to-be's at the next table have not experienced any of this. There is no transition for them. Medicine will be a corporate enterprise for them, complete with signing bonuses and holiday pay.

How will this impact the way they practice medicine? For one, they will have been initiated, from day one, into a system that allocates a specific number of minutes per patient. They will be instructed in profitability. They will always know the origins of their income. And once you are in this system, how hard is it to change employers? If, or when, the government becomes the major or single payer of health care, would these doctors even notice?

Hard to say.

We face a looming shortage of primary care physicians and gerontologists. I didn't ask any of the future docs what they wanted to practice. I only wonder if their future employers will bother to ask.


Monday, August 15, 2011


“…the only way affordable access can be achieved is for every citizen to have some type of health insurance.”

Barack Obama? Nancy Pelosi? No, that would be too easy. The above sentiments were voiced by the former Republican leader of the Senate, Dr. Bill Frist in September 2009.

And that is the problem. Democrat and Republican leaders know that mandating insurance, whether it is from an employer or individually purchased, is a core requirement to meaningful reform. If you accept that the system we had on March 22, 2010 was unsustainable, then getting everyone to participate is an integral part of any solution.

Is the individual mandate of the Patient Protection and Affordable Care Act (PPACA) constitutional? It depends on who you ask.

On Friday, August 12th, a three judge panel with the 11th Circuit Court of Appeals ruled against the President and the mandate. It was a split decision. Two of the judges, Joel Dubina a Bush appointee and Frank Hull who was brought to the bench by President Clinton, issued a 207 page ruling that clearly stated their opposition. “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”

Judge Stanley Marcus, also a Clinton appointee, noted that his peers had ignored “the undeniable fact that Congress’ commerce power has grown exponentially over the past two centuries”.

The White House was quick to point out that insurance rates will skyrocket if all of their changes (free stuff) are implemented without the individual mandate. In other words, if insurance is guaranteed issue and preexisting conditions don’t matter, healthy people won’t bother to buy coverage. This would create a pricing death spiral.

This recent decision is just another step towards the inevitable Supreme Court showdown. In an evenly divided Court, Justice Anthony Kennedy becomes the swing vote. What will he decide? Darned if I know. My guess is that he will note that the individual states have the power to impose this mandate, but that the federal government does not. But that is just a guess.

And, if you have been reading this blog for awhile, you know that this ruling has no impact on my prediction of our final destination.

The federal government, the states, the insurers, and businesses have spent millions of dollars to comply with the PPACA. The Republicans may have won the House last November, but as predicted, they have not taken even the smallest of steps to modify this legislation. Their Bill – H.R. 2 Repealing the Job-Killing Health Care Law Act was neither serious nor constructive. This train has left the station.

If the mandate is struck down, but all of the benefits are retained, rates will continue to climb and the federal government will be forced to offer a competing Public Option. The Public Option will be designed like Medicare Part B, an optional benefit that covers doctors, testing, etc… that almost 90% of all Medicare Beneficiaries accept. There is a heavy fee for failing to purchase Medicare Part B when it is initially offered. Seniors aren’t forced (mandated) to take Medicare Part B. They are just screwed if they don’t. That’s constitutional!

The insurers will dump the individual and small group market on the government and concentrate on the far more profitable supplemental products.

So here we are in August 2011, seventeen months into the PPACA. All of the players are following the script. I suggest you get another popcorn. This show has just begun.


Friday, July 29, 2011


It was war. Ugly. Bloody. And there was plenty of collateral damage. Angela F. Braley, Chair, President, and CEO of Anthem/WellPoint, dug in her heels. She was, after all, the leader of the largest health insurance company in the country. Thirty-four million Americans counted on HER company. Last year’s revenues were $57.8 billion dollars. Yes billion, with a B. And yet, she was fighting a board room coup.

Ken Goulet, Executive Vice President and CEO of the Commercial Business Division, had his own ideas of how the company should be run. His area accounted for twenty-seven million Americans, 80% of the WellPoint’s medical insureds. He and the Executive Vice President and Chief Financial Officer, Wayne DeVeydt, saw a need for an immediate rate increase to protect long-term financial security. They wanted more money in the company coffers, and they wanted that now. Ms. Braley disagreed.

The disagreement erupted at the Board meeting. Angry words were exchanged. Ms. Braley demanded spending cuts and changes in benefits. Goulet and DeVeydt tried to force across the board premium increases. Claims were suspended as the company attempted to sort out its finances and determine a prudent path to take. Insured’s were advised that their policies would be reactivated once a decision was reached, passed by the Board, and signed by the CEO. Until then, the best one could hope for was good health, a quick resolution, and a reasonable rate increase once the bill arrived.

The above is, of course, total fiction. Those are the names and titles of WellPoint’s leaders. The revenue and membership numbers are accurate, too. But the idea that an insurance company would hold up benefits while sorting out an internal conflict is just me being silly. Real businesses are too responsible to behave that way. No, the only place people’s lives are put in jeopardy like this is with the government.

Today is July 29, 2011. The Republicans just passed John Boehner’s bill. The Speaker of the House, the leader of the Republican majority, needed over 24 hours to get an almost meaningless piece of legislation approved by his own troops. In the end, the only thing he accomplished was the final destruction of his own reputation and position. This bill is Dead On Arrival at the Senate. Boehner knows that. His Republican members know that. And the Senate is incredibly clear about the bill’s status. There was only one reason to pass this legislation – political theater. If Boehner could have passed the bill with little effort, with all of the Republicans and a smattering of Blue Dog Democrats, he would have been in position to consolidate power and force a deal more to his members’ liking. Now? Who knows?

I don’t think we are going to default. I certainly hope we don’t. I keep thinking that the adults are going to step in at the last moment and resolve this. At the very least, I keep thinking that this will be kicked down the curb till next March.

Until this is resolved, seniors dependent on Medicare and countless others wait and wonder. Will they be paid next week? Will they be insured next week? Will the government shut down? We have states that have or are close to shut down. Why not Washington? With so many people campaigning against the federal government, what would happen if enough people got elected who wanted to dismantle the great social safety net?

And thus we return to my question – is your health care too important to be entrusted to politicians? This isn’t an unqualified endorsement of insurance companies, just a simple question. John Boehner? Harry Reid? Nancy Pelosi? John McCain? Which of these people would you like to have managing the nation’s health care industry? Which do you want in charge the next time you need a kidney?

Let me be clear, the insurance industry is only as good as the regulations that control it. Ask my friend John about his claims from Hurricane Katrina. Health insurance claims are far less aggravating then car or home insurance claims, but rules and regs play a large part in that. Financial stability comes, in part, from the laws the companies are forced to abide.

So, on Friday the 29th, the idea of Anthem not paying my clients claims is ridiculous. The idea that my friends and neighbors are being threatened by a government default that may or may not cover their claims isn’t ridiculous. It is shameful.


Sunday, July 24, 2011

More Free Stuff

“Unintended pregnancies carry health consequences for the mother - psychological, emotional and physical – and also consequences for the newborn”, said Dr. Linda Rosenstock, panel chairwoman and dean of public health at the University of California, Los Angeles. “The overwhelming evidence was strongly supportive of the health benefit” of contraception.

The above paragraph was part of an Associated Press story that appeared Tuesday at The headline was Panel urges no co-pay insurance coverage for women’s birth control.

Last year’s Patient Protection and Affordable Care Act (PPACA) included a provision for preventive care. Most health insurance plans are now required to cover a list of preventive care exams and tests without any co-payments. FREE! The costs for these services are simply shifted to the insurance company who eventually shifts them back to you or your employer in the form of higher premiums. Knowing that recommendations over and above mammograms and Pap tests would be controversial, the issue was shipped over to the 16 person panel at the Institute of Medicine.

The panel recommended that the following female-specific items be included under the free preventive care benefit:
* All forms of contraception – Birth Control Pills, IUD, and emergency contraception (the morning-after pill)
* At least one “well woman” preventive care visit annually
* Annual HIV counseling and screening for sexually active women
* Annual counseling on sexually transmitted infections for sexually active women
* Screening for and counseling about domestic violence
* Screening every 3 years starting at age 30 for the virus that causes cervical cancer
* Screening for diabetes during pregnancy
* Support for breast feeding mothers, including the cost of renting pumps

The recommendations didn’t have a 16-0 endorsement. Anthony LoSasso, a senior research professor at the University of Illinois School of Public Health, objected. He noted the absence of a cost-benefit analysis. But since money wasn’t relevant, the Rosenstock led panel pushed through their wish list.

There is a very good chance that Kathleen Sebelius, the Secretary of Health and Human Services, will incorporate these recommendations into public policy in the next few weeks. There is an even better chance that Kathleen Sebelius, the Secretary of Health and Human Services, will be attacking the insurance companies next year when your rates go up.

I am not suggesting that giving women information and access is bad. Far from it. The lack of concern over cost bothers me. And, this decision to explore personal habits opens us, as a society, to countless issues.

Dispensing free contraceptives as part of preventive care means, in essence, that any woman physically capable of getting pregnant, but not utilizing some form of contraception, is not following accepted medical care. Should your eleven year old daughter be on the pill or have the patch? IUD at fifteen? I believe that this is a family discussion.

Is sex a choice? Is sex too desirable to avoid?

What about gun ownership? I’ve never owned a gun. I have never fired a real gun. But I know people who feel even more strongly about their guns than I do about the wooden pen I’m using to write this post. We know that children find guns in their homes and accidentally kill themselves, siblings, or playmates. What is to keep Secretary Sebelius from incorporating a gun ownership prevention/education/safety program into every child’s preventive care visit?

It doesn’t stop there. I was a healthy kid, but I had numerous basketball injuries. Should my teenage preventive care exams have come with elbow and knee pads, or should the doctor have just given up and prescribed a 30 minute video on the horrors of knee injuries?

Football is a choice. So is riding a bike. We now require children to wear bicycle helmets. Shouldn’t the doctor just periodically dispense them as the child outgrows them? This is preventive care. The science supports the need.

And Money Is No Object.

We live in a fantasy world where there is an abundance of free stuff. The U.S. is currently fighting two or three (depending on who you talk to) unfunded wars. The party, Democrat or Republican, out of power is always more obsessed with budgets and deficits than whichever is in charge. And wherever there is a microphone you will find a politician promising something for nothing.

We’re adults. We know better. But we still want more free stuff.


Tuesday, July 5, 2011

me Me ME

I couldn’t write. I was too agitated to write. Now for someone like me who seems to write principally to vent, agitation is a useful state. Sometimes it is the starting point. But I have been handcuffed for over a week.

“If Congress really wanted to balance the budget,” I heard an elderly man say. “They could stop spending our money on things like…” an elderly woman continued. Turning my attention to the television, I found a parade of senior citizens complaining about the federal government having the nerve to allocate funds for anything other than their health, welfare, and happiness. Some of the claims were bogus, some merely exaggerations. The total of all of the alleged expenditures wasn’t enough to change anything. The commercial, sponsored by AARP, was simply one more salvo in the ongoing budget debate.

We are all in agreement that sacrifices need to be made. We are waiting for YOU to make them.

The nursing homes in Ohio feel that they are entitled to a larger and larger share of the State of Ohio’s budget. Deliver Medicaid care at home? Unthinkable. Thus we are treated to aged, decrepit seniors crying into the camera. “Please don’t take my dignity,” said the 200 year old guy wearing the Veterans of Foreign War hat. Too late. That ship has already sailed.

I heard the familiar strains of You Only Hurt The One You Love. The television screen was filled with sick people. The American Hospital Association wants you to know that cuts in federal funding will have an immediate impact on the elderly, children and the disabled. And just in case you have the sound off, their ad concludes with the camera focusing on the unhappy child in a wheelchair.

We in Greater Cleveland know how the hospitals have been suffering. It has been almost a week since a new facility opened!

We are in year two of the President’s health care reform. The Patient Protection and Affordable Care Act has succeeded in keeping a smattering of adult children on their parents’ policies. It has eliminated policies that covered only children. It has cost millions of dollars for compliance. But, the PPACA has not reformed health care.

You may not like insurance companies. Hell, I’m an insurance agent. There are lots of days that I don’t like insurance companies. But, you can’t reform health care without addressing the cost of medical care and how it is delivered. And no one is more change resistant than the medical industry when the subject is money.

Every time the government proposes a cut in the funding or even the growth of funding of medical care, we see more costs shifted to those who are covered by private insurance and the television commercials reappear. My goal is to eventually be one of those elderly actors. I bet AARP pays well.

We have yet to have a serious discussion. And it is hard to blame the doctors. Do you want to take a pay cut? Would you want to work more, see more patients, for the same money, or G-d forbid, less? Everyone involved, from the lab techs to the hospital administrators, has the same argument. And until anything happens, all of the participants are staking out their territory.

We are all in agreement that sacrifices need to be made. We are waiting for YOU to make them.

Somewhere there is someone reading this who is pounding the table and yelling, “Take the profit out of healthcare!” Balderdash. There is profit at every step. The doctors aren’t volunteers. The labs, the pharmacies, the drug companies, the equipment manufacturers, the company that cleans the linens, they all expect to be paid for their efforts and rewarded for their risks.

Of course, we could bring all of this under government control. Wouldn’t that solve everything? A recent Wall Street Journal article detailed the incredible cost (waste) when people are covered by both Medicare and Medicaid. Medicare is a federal program. Medicaid is controlled by the individual states with a partial reimbursement from Washington. There are 9.7 million patients covered by both systems. “Dual Eligibles” have disproportionately higher claims as they expose the inefficiencies of the two programs and their inability to effectively coordinate care. The examples in this article will give you pause.

The answer won’t be found in a scary commercial. Old veterans and disabled children are just stage props. We understand that there aren’t any 2011 Cadillacs waiting for us at the corner used car lot. At some point we have to decide what health care we really want and how much we can and will spend. Those tasks are still waiting for Congress, Republicans and Democrats, to tackle with the President. The business models will work themselves out, once those questions are answered.

And will someone please get the child actor in that wheelchair a teddy bear?


Monday, June 13, 2011

Team U.S.A.

Before we begin – The Tony Award Show is serving as background noise as I write this. The Dallas / Miami game may be on, but not in my home. I want the Mavs to win, or more importantly, I want the Heat to lose. I don’t want to invest two hours of my life cheering for someone to fail. That negativity isn’t healthy. For that matter, investing all of your energy praying for the other political party to fail is not only unhealthy for you, it can be devastating for the country.

It is only fair to warn you, dear reader, that this is another post about Medicare. Click. I just lost half of my readers. Medicare is boring and about old people. Since most of my readers are under 65, most don’t care about a program designed to provide health care to senior citizens and the permanently disabled. The average American has a notoriously short attention span. We need good guys and bad guys, winners and losers. There is little interest in nuance and detail.

The path to a true solution is built with patience, compromise, and lots and lots of detail.

Medicare was created in 1965. The business of health care has changed significantly in the last forty-six years. We are living longer, getting lots more treatments, many of which didn’t even exist in the mid-60’s, and we are taking an incredible amount of medications.

Senior citizens, in 1965, were thankful that the U.S. Government was coming to their rescue. Medicare filled a need. That need was very real. Today we take Medicare for granted and whine about copays and deductibles. Medicare is the ultimate entitlement program. Ask everyone on Medicare. They will tell you that they are entitled to all the medical care they could possibly need or want.

How do we pay for this? How do we control costs? Can we limit care without being accused of creating death panels? How much should the U.S. Government pay a doctor, a lab, a hospital? Does a doctor in Akron, Ohio really get paid the same amount as a doctor in Manhattan? Can a government really make all of these decisions, and thousands of others, efficiently?

The answer – Maybe.

The citizens of most of the developed world depend on their governments to make those decisions. We, emphatically, do not. We want choices. We want to feel like we are in control. We just want someone else to pick up the tab.

If Medicare is to survive, the government will need to get control of the cost of care. The insurance companies have had some success in this area. Medicare has not. The government will have to get control of fraud and abuse. The insurance companies have had some success in this area. Medicare has not. As long as the doctors have lobbyists, the hospitals have lobbyists, the labs have lobbyists, and the pharmaceutical companies have Congressmen, meaningful change will not happen easily.

There are almost 50 million Americans on Medicare. The influx of baby boomers with our growing life expectancy means that more and more people will be dependent upon a government that is unprepared and unwilling to change until forced.

Representative Paul Ryan’s plan is to pass the buck. Instead of controlling medical costs or even working with the medical providers and insurers, Representative Ryan would send you a check and tell you that you are on your own. If you view his plan as simply a starting point to a long discussion, then it has some (small) merit. If you view this as the ultimate answer, you might need new glasses. Dumping all of the decisions and problems on to the backs of our senior citizens is not the answer.

So how do we move forward? It will take a Presidential Commission comprised of serious, well-known and well-respected Democrats and Republicans. We desperately need to remove the politics from this if we are to have any chance of success. Some of the questions are:
* Medicare begins at what age?
* How much does it cost?
* Will the price be adjusted by age or assets (means testing)?
* How do we control medical expenses?
* Is every test a doctor orders necessary?

This is a partial list. It will take a fair amount of courage to answer those questions. It will take a historic effort to implement the final recommendations.

And when that time comes, when a bi-partisan group has created a workable framework to save and preserve Medicare, it will be our job to cheer for their success. Because their success will be our success. And their failure would be devastating.

I just snuck a peek. Five minutes are left and Dallas is up by 7!


Wednesday, May 25, 2011

Cliffs and Tsunamis

The patient was being prepped to be transferred to Hillcrest Hospital. It was at this point that the attorney, a senior citizen covered by a Medicare Advantage policy (Medicare Part C) objected. In pain, he had been rushed to Hillcrest. After some initial testing, he was packed up and delivered to Ahuja Medical Center, the new University Hospital facility. And now the administrators wanted to send him back to Hillcrest, part of the Cleveland Clinic system.

What medical condition would cause two of the most advanced hospital systems in the country to treat the patient like a hot potato? He had a tummy ache. Seriously. It wasn’t the medical condition. It was the insurance.

The attorney and his wife had purchased a Brand X Medicare Advantage contract. The company has a well-defined network of providers in its home market several counties from here. There was nothing wrong with the product. The Federal government certified and approved it. Our hospitals were unsure of the network, which meant that both hospitals were unable to determine that they would be properly paid.

Let’s stop and review this:
* Educated consumers evaluated their insurance choices.
* All of the products were government approved.
* Two of the largest, most successful, hospitals in the country reviewed the coverage.
* The insurer’s “Home” territory is less than 100 miles away.

The patient could have been treated by either hospital. There was no reason to transfer him. None.

Representative Paul Ryan would like to reform Medicare. The Democrats claim that he is trying to kill Medicare. Pictures of little old ladies being pushed off cliffs will be on your TV by this weekend. This is, of course, a gross exaggeration. Mr. Ryan would never push elderly people off a cliff. He would, however, lecture tsunami victims for their inability to out swim the wave.

Mr. Ryan introduced his Roadmap for America’s Future in 2008. he has had three years to refine it. He has had three years to learn how to explain it. He has failed on both counts. His Medicare plan does not involve vouchers. In truth, Representative Ryan appears to have borrowed the worst parts of the Medicare Advantage program, Medicare Part D (Rx), and the Charter School Voucher initiative, thrown all of these ingredients into a malfunctioning blender, and poured his concoction into a couple of broken martini glasses. Delicious.

I have read the Congressman’s website several times. I wanted to ask him a couple of questions, but his site only accepts emails from residents of his district. If he wants to be a national leader, he should be nationally accessible.

The current Medicare Advantage program allows senior citizens to acquire coverage online, by phone, by mail, or through a specially trained and licensed agent. There is no difference in price. The attorney went it alone. He was never in any real danger. He was always covered, but there had been better options. Representative Ryan’s plan is far more complicated and it doesn’t carry any guarantee of success. It is important to note that the attorney and his wife CHOSE the Medicare Advantage route. They could have stayed with traditional Medicare and purchased supplements. Mr. Ryan eliminates that choice.

The good news is that there are no cliffs involved. But Paul Ryan thinks that you better learn how to swim.


Saturday, May 14, 2011

Two Questions

The second most frequently asked question of an insurance agent is, “Why did my policy lapse?” The answer is because you didn’t pay the bill. The absolute winner, the question that I am asked at least once a day is, “Why did my rates go up?” There isn’t a simple answer to that question.

Some of the factors that may contribute to a premium increase for an employer are:
* Increased Utilization
* Aging Population
* More Mandated Benefits
* Medical Inflation
* New Insurance Taxes

That is not a complete list. There are more. But today’s post isn’t about price increases. It is about one of the ways to impact costs.

The May 2011 edition of Employee Benefit Adviser, which is not nearly as boring as it sounds, included an article about two employers enjoying 0% renewals this year. We are going to look, briefly, at J. J. Keller & Associates, Inc. of Neenah, Wisconsin.

J. J. Keller & Associates, Inc. is a privately held company with about 1,100 employees. Keller helps companies navigate through the minefields of government regulations. The company enjoys a stable workplace environment. 60% of the employees are over age 40 and the majority have worked for the company for five years or more.

Keller’s commitment to Wellness includes:
* Company sponsored Weight Watchers at Work
* Smoking Cessation programs
* Fitness Challenges
* A Walking Trail available during breaks
* In-house Food Service
* Workout Facility
* In-house Wellness Center staffed by a Nurse Practitioner

You get the idea. They have made the complete and total commitment. J. J. Keller has everything in place for a successful program. Even the fact that it isn’t a publicly traded company helps. Does this mean that the health insurance rates are going to decrease? Are they saving money?

The article doesn’t answer either of those questions. My guess is NO on both counts.

Medical inflation, alone, is going to impact costs at close to 10% per year. Maybe more. The Patient Protection and Affordable Care Act is taking a toll, too. But the most important issue is that we are not discussing machine maintenance. We are talking about human employees, flesh and blood. We are going to get sick or injured. We are going to have claims.

A properly designed Wellness Program can mitigate the type and amount of claims by controlling behavior. Ongoing claims for diabetes, heart disease, stroke and cancer are budget killers. Many of these conditions are controllable through education, medication, and behavioral modification. The Keller program is designed to improve morale and awareness. From here, today, it appears to be working.

There are some local stars in the wellness universe. Kaiser Permanente is returning to its HMO roots. After a bit of soul-searching, the company realized that it was attempting to be all things to all people. Kaiser has recently declared that it will return to its core competency – an integrated medical practice whose mission is to keep people healthy. With a focus on Prevention, Kaiser hopes to reestablish itself as a unique option in the marketplace.

I recently met with Jamie Field of University Hospitals. Ms. Field has created an incredible wellness program for Northeast Ohio employers. She and her team will conduct Health Fairs, Wellness profiles, and Health Screenings at the worksite. The pricing tells the story. U.H. has made the decision to perform community outreach. For example, $20 per employee includes on-site health screenings for:
1. Blood Pressure
2. Blood Sugar
3. Cholesterol
4. BMI
5. Bone Density

Employees who fall outside of the normal range on any of the tests are given useful information designed to answer immediate questions and to spur productive steps towards help or control.

Will this lower the employer’s group health insurance rates? No, at least not anytime soon. But if the goal is to help someone before they have a stroke, heart attack, or other major claim, then a wellness program could be very useful. And yes, it could improve employee morale.

The purpose of group health insurance is to attract and retain good people. A wellness program, one designed to help and educate, could complement your efforts.

The results may be happier employees. You may have healthier employees. But the insurance will still lapse if you don’t pay and the rates may still go up. I'm hoping just a little.


Friday, May 6, 2011

Of Course It Is A Good Idea. I’m Not Paying.

One of the new benefits of the Patient Protection and Affordable Care Act (PPACA) is that dependent children, even if they are married, can be covered on the their parents’ policies until they reach the tender age of 26. Ohio upped the ante and made it 28. Employers are rejoicing.

A provision was built into the law that prevents an employer from passing any of the extra cost of insuring an adult child onto the parental employee. If the employer pays 75% of the cost of insuring a five year old girl, the employer must pay 75% of the cost of insuring a twenty-five year old woman. There is a huge difference in these risks. Neither the State of Ohio nor the US government is concerned.

The insurers are passing the additional cost to cover these adults, much like the other new benefits, to the policyholders. Individual (non-group) contracts are rising. Group policy premiums are climbing. Some employers are absorbing the difference. The recent hike in gas prices will quickly end such largesse.

I am seeing employers tackle this problem by raising their deductibles and co-payments in an effort to retain reasonable premiums. Other clients are asking their employees to pay a larger portion of their premiums. This would appear to be inevitable.

As the costs continue to mount, there are still those who want more. Can we include the spouses of the married children? Shouldn’t we include grandchildren? I’m reminded of my friend Jack who didn’t quit smoking. He simply quit buying!

There are no FREE benefits. There are no Free physicals. No Free colonoscopies. No Free coverage for dependent children. We are all paying for this, directly or indirectly. If this, any of this, makes sense as part of some greater public good, say so. It is time for our political leaders to publicly state their values. We need to be asked to support their choices with out money.

We’ve had subterfuge and deception. Let’s try something entirely different – honesty and transparency. I’m paying. Let me feel like I’m getting my money’s worth.


Thursday, April 21, 2011


10:05. Not Bad. I was right on time for my 10 AM appointment. It had taken me years to do this, to break my habit of arriving early, or at worse, exactly at the scheduled moment for certain clients who are always late. There is a certain comfort in predictability. If we have a chance to prepare, we can deal with almost anything.

Security – Consistency – Predictability

One place Americans beg for a measure of predictability is in the delivery of health care, especially for senior citizens. Sadly, the only consistency of late has been the unrelenting fear mongering delivered by both political parties. And my prediction is that there is no end in sight.

This blog has tackled Medicare numerous times over the last two years. The February 5, 2010 post includes a complete break-down of Medicare Part A and Part B. The Doc-Fix, Medicare Fraud, the need for private coverage, Medicare Advantage policies, and even hospital reimbursements have been addressed. There is no need to rehash any of that today.

Both the Democrats and the Republicans agree that Medicare needs help. Their only other area of agreement is the political value of Medicare. Seniors vote. Each side is willing to manipulate Medicare’s funding, physician reimbursements, and even plan design to garner those votes.

The Democrats have spent much of the last two years demonizing insurance companies. One of their favorite targets is the Medicare Advantage program. Instead of having traditional Medicare, plus a Medicare Supplement that may cost $150 a month or more, and a Medicare Part D (Rx) plan for another $50 + per month, a senior may choose a Medicare Advantage policy that might not cost him a penny. The federal government pays the insurer a set amount to handle all of the senior’s health bills. Medicare Advantage policies may include office and hospital co-payments.

The low monthly premium, or in many cases the total absence of premium, is very attractive to some seniors. In exchange, there may be a network of preferred providers and the possibility of lots of copayments should the senior require multiple hospital stays and doctor visits.

Medicare Advantage policies are not for everyone. Approximately eleven million seniors have chosen this option.

This administration has bemoaned the very existence of Medicare Advantage policies since they took office. Part of the President’s plan has been to cut funding for this program. This week the administration reversed itself and plowed an additional $6.7 Billion into Medicare Advantage.

You may have heard that there is an election next year.

The Republicans have dabbled in Medicare politics, too. Medicare Part D (Rx) was created, in large part, to insure the reelection of George W. Bush in 2004. Their new found interest on deficit reduction arrived long after they created this program.

Representative Paul Ryan is now talking about eventually moving all seniors into a voucher program. I have yet to see the details, but is sounds a whole lot like Medicare Advantage. The Democrats have already begun the campaign against this. They paint a picture of frail, elderly Americans forced to return to work to pay for their insurance. The Republicans are claiming that this is a necessary major step to controlling costs and reducing the deficit.

It is all great theater, but there is precious little truth in any of it. And, there is no security, consistency, or predictability. The cost of care, unaddressed in any of this, continues to rise. Our seniors, our medical providers, and even the insurers suffer from the uncertainty of this process.

If I could monetize frustration, I would be rich.

Instead, I just learned that my client forgot about our appointment. I only predicted that she would be late, not a total no show at her own business. Her employee and I just negotiated an appointment in my office at 2 PM.

I’m positive that she will arrive before 3.


Thursday, April 7, 2011

The World's Worst Lobbyist

She was making a joke. It was her second joke/witticism in the last twenty minutes. And like the first time, I didn’t laugh. I’m not a good fake laugher. At least I smiled. Busted! She again noticed that I wasn’t laughing. Her protests may also have been attempts at humor. Oh well. I had no trouble convincing her that I was not an experienced lobbyist.

About seventy-five members of the Ohio Association of Health Underwriters were at the State House to voice our concerns about pending legislation. The Lieutenant Governor, Mary Taylor, who is also in charge of Ohio’s Department of Insurance, came to talk with us. Even Democrats like me appreciated what we heard as long as she didn’t stray from our particular area of concern.

Like any health insurance agent program, the day began with coffee, juice, and platters upon platters of cakes and pastries. The morning program consisted of several speakers who detailed Ohio’s attempt to deal with the Patient Protection and Affordable Care Act (PPACA), the new exchanges, and where we, professional insurance agents, fit into this evolving system. Next was lunch and another couple of speakers. By three o’clock we were more than eager to meet with legislators for our pre-set appointments.

There were heavy hors d’oeuvres and cocktails waiting for us at the five o’clock finish line. Being a health insurance agent isn’t necessarily healthy, but it can be fun.

I met with two Democratic State Senators and a Republican member of the Ohio House. While waiting for my appointments I bumped into representatives of the credit unions, service unions, YMCA’s, and other interest groups. I found our elected officials to be incredibly generous with their time. They were sincerely interested in talking with me, not at me. They appeared to be committed to doing the people’s business.

I’m not sure that I was up to the task.

I was supposed to talk insurance. The states can not wait to see if the PPACA will be defunded or struck down by the Supreme Court. All 50 states are attempting to create a mechanism to comply with the law that will best serve their particular population. 50 plans. All different. All based on a law and a set of assumptions that could change at any moment. Ohio’s options and my clients’ needs were my topics. All three legislators veered into other areas.

The Republican and the Democrats wanted to talk about S.B. 5, the bill that was pushed through last week. The Republican appeared to be shaken by the vitriolic push-back. The Democrats were shocked by the over-reach of the newly elected, and incredibly partisan, Republican Governor. The similarities between S.B. 5 and the PPACA are striking. In each case the party in power passed a highly partisan, one sided piece of legislation that is opposed by close to 50% of the population. The victory is short-lived. The Democrats paid dearly at the polls last November. The Republicans in states like Wisconsin and Ohio will probably pay for their impudence this November and next.

My message was that whether you love or hate the PPACA, it is our job to make this legislation work for our clients and all Ohioans. The best use of our time and efforts will be programs that will provide greater access and information. That was the message. I don’t know if I was successful in delivering it.

I might have been more effective had I been able to laugh at those jokes.


Thursday, March 24, 2011

PPACA at 1

March 23, 2011

It has been a full year since the Patient Protection and Affordable Care Act was signed into law. A lot has changed in the last year. Were any of those changes good for you?

In the last twelve months:
* Insurance Rates have increased.
* Changed and new policies now cover preventive care without copays or coinsurance.
* Children, Only policies were taken off the market.
* People who have significant preexisting conditions and who have been uninsured for over six months can purchase coverage.
* The Democrats lost the House of Representatives and a large number of state houses.

Confusion and uncertainty have dominated the last year. Polls show that a majority of Americans dislike the PPACA, but a majority also dislikes the Republican’s plan to repeal the law. Much like Iraq, the public doesn’t want to be here, but is afraid to leave without a plan.

A Plan. The government doesn’t have any idea how to reform the payment and delivery of healthcare. The people in charge do not appear to be up to the task. And, do all of our so-called leaders have clean hands? Are we being provided an accurate view of the problem and the possible solution?

Vice-President Biden sent an email today to me and millions of other Democrats. He was eager to celebrate this anniversary. The bulk of the email was the story of a young child born with significant health problems. According to our VP, the family is no longer worried about the child’s future due to the passage of this legislation.

I am glad this child’s parents are no longer worried. Of course, if the child is really that disabled, he would qualify for SSI benefits and his health would be covered by the government or the parent’s policy. Nothing changed.

Only in government is over-promising and under-delivering a given.

It has been a year. The Doc-Fix and the 1099 Problem are still unresolved. The Individual Mandate might not be constitutional. The Democrats and the President are stalling in the hope that the PPACA will become accepted, if not loved. The Republicans made a faint attempt at repeal and then returned to their #1 focus, abortion. Regulations and rules are now in the hands of the bureaucrats. The final result may be as clean and organized as the tax code.

The PPACA link in today’s blog is the current amended version of the legislation as of December 10, 2010. Millions have been squandered by insurance companies and major employers attempting to comply with the ever-changing regulations. Those costs will be passed along to you in higher prices for insurance, food, and other necessities.

We can only hope that there will be more clarity and an actual plan by this time next year.


Sunday, March 13, 2011

A Clean Bill Of Health

Before we begin this next installment of Health Insurance Issues With Dave, we must briefly mention New Hampshire State Representative Martin Harty. When confronted by constituent Sharon Ormond about planned cuts in local mental health, Representative Harty opined that “there are too many defective people”. He went on to express his wish that we could ship the disabled, the retarded, and people with physical disabilities to Siberia.

Yes, Representative Harty is a fershimmeled 91 year old. Yes, he will serve one, and only one, term. I bring this up to again note that the moment health care is placed into the hands of politicians; the good, the bad and the Harty’s, medical treatment is politicized.


I had my annual physical this week. I ran in Tuesday morning and had my blood drawn. On Wednesday I spent over a half an hour with Dr. Ken Goodman who performed a thorough exam and an EKG. Let me brag for a second. The results were excellent. The costs for all of this, however, may surprise you.

I haven’t seen this year’s bills yet, but I have last year’s. Last year the Cleveland Clinic billed me and Medical Mutual of Ohio $802.78. MMO has a contract with the Clinic, so they only paid $417.13. I was left with a bill of $32. That is my policy. Technically, preventive care exams are completely covered on my policy, but the Cleveland Clinic always runs a blood test that isn’t part of the package. So I am always left with a small charge.

Many of my clients have similar coverage. Many, but not all. The new law, the Patient Protection and Affordable Care Act, has changed that. All non-grandfathered health insurance policies now cover preventive care completely. How will that impact your policy?

In the simplest of terms, we are adding $417 to $803 of claims and the cost to process the paperwork to your policy. That is up to $67 per month. You and I understand that that will have an impact on your premium. It is true that only a fraction of Americans will take advantage of their free physicals. So you can get yours and hope that all of your friends skip theirs.

The federal government operates in a parallel universe. Their numbers are far different. The Department of the Treasury released interim final rules and regulations on July 19, 2010. This link takes you to thirty plus pages of the Federal Register. Section 5 details Costs and Transfers.

The government determined that individuals with employer-sponsored insurance have, on average, $264 in covered preventive care services. Of that, $240 was paid by insurance and $24 was paid by the patient as a copayment. Making this change, mandating that the exam is totally free, will only result in a $24 shortfall.

My exam, which doesn’t cover all of the stuff that falls under the new law, was a lot more than $264. Yours will be, too. That’s a gap of at least $153. If your current plan covered less than $264 of preventive care, or even no preventive care at all, your gap is much higher. Who will be charged for your free physical? You, of course, will be funding your free exam through higher health insurance premiums.

I believe in the value of routine physical exams. I have been poked and prodded annually for over twenty years. I also believe in routine auto maintenance and oil changes for my cars, but I don’t expect State Farm to cover them. I made a conscious decision to purchase a health insurance policy that includes preventive care. I chose to pay extra.

I believe that you are smart enough to make your own decisions, too. But, the government believes that the benefits of an annual exam, especially the opportunity to have a doctor educate you on the dangers of smoking and obesity, are too important to leave to chance. OK. Sell that.

It is time for the government to explain to the American people how much this program is going to cost us. The answer is not $24. If this really is beneficial, if it is truly warranted, the facts will win out. I believe in the American people. I trust our judgment. We will spend money if we understand why it is in our best interest. But the PPACA has been sold to us as a way to lower our costs and premiums.

That is clearly not true.

My numbers were great. Blood Pressure – 107/74! Resting heart rate of 65. No medications. Anticipated bill - $35. I hope your numbers are just as good, if not better. Diet and exercise can help to control your blood pressure. There may be no way to control that last number, the cost, under the new legislation.


This blog post is now appearing on my website in a word press format. Those of you who use a reader might prefer that format. Please let me know what you think.

Friday, February 25, 2011

Promises Promises

When is a contract a contract? When is a promise a promise? The answer in 2011 is “It Depends”.

Public employees have contracts. Some of their contracts promised adequate wages with really good fringe benefits and generous retirements. Almost all of their contracts guaranteed stability. Governments; cities, states and the feds, and public institutions such as schools, often took the easy route. Our leaders and elected officials pushed these payroll costs back twenty or thirty years when funding would be someone else’s problem. This strategy was so popular at the steel mills and the auto plants that it had to be a good idea.

The future is now.

Vice-President Dick Cheney once said the deficits don’t matter. And they didn’t. To him. In 2011, after ten years of unfunded wars, unregulated banking, and reckless spending, we are in a real mess. We could reassess our priorities and then align our income (taxes) to pay our bills, but that would be difficult. That would take courage. Instead, we tear up contracts, de-certify unions, and cut heating oil subsidies for the poor.

What does all of this have to do with the delivery of health care? After all, this is Health Insurance Issues With Dave. In a word, everything.

The recent election gave us Republican governors in Wisconsin, Ohio, etc… Elected to create jobs and right their ships of state, these new governors have chosen a different path. They have decided to target their public employees and to eliminate the unions that represent them. We are being told that these contracts are too expensive to honor. We don’t have the money. Their jobs, and the incomes that paid their bills, will disappear. The pensions they were promised may be gone.

Why is this different than government’s promise of health care? We haven’t properly funded the health care we have promised to the poor and the elderly. We have deferred the expenses and punted every time a difficult decision has been on the table. A quick example is the Medicare Doc Fix.

In an effort to make a dent in the fiscal mess that is Medicare, a decision was made in 1997 to control the escalating costs of medical care. The Sustainable Growth Rate was a payment formula designed to keep doctors’ rates in check. Unfortunately, the formula didn’t work in the real world. The adjusted payment rates would have forced a large number of doctors to not accept Medicare and to leave the system. One option would have been to correct the formula. Another option would have been to scrap the Sustainable Growth Rate and start over. Congress, Republicans and Democrats, chose a third option. They passed periodic fixes to the bill and pushed the tough decisions back for someone else to handle. The Sustainable Growth Rate was passed in 1997. How much have we saved to date? Nothing. The implementation is still getting postponed every month.

Is the Doc Fix a good idea? Would the Doc Fix solve Medicare’s problems? Probably not. But if Congress doesn’t get Medicare’s costs and funding under control, we will eventually be facing the same problems, and the same decisions, that the states are grappling with today.

Can the federal government be entrusted with more responsibility for our health care? What promises are too important to break?