Archive | June, 2009

To the Congressional Staff-no time for a pig in the poke

30 Jun


To the Congressional Staff:

As you participate in the process to reform health care in America, I hope you will consider the realities of the system, and of the people who use health care.  Not all that is important is in studies and statistics.  What people say they want is not always what they really want or understand they are getting. 

Above all is the law of unintended consequences, which is a common pitfall of legislation.

In 1961, I began my career processing major medical claims; in the 1980s, I was on the Board of Directors of four HMOs, where one of my jobs was to negotiate contracts with physician groups. I also consulted for the federal Office of HMOs and have written and published over 200 articles on employee benefits, mostly on health benefits.  Since 1993, I have participated on the task forces of three of New Jersey’s governors to evaluate the employee benefits program for state employees.  I have been designing and managing health benefits for over forty-seven years.

What is the point of all this information? It is simply to provide a frame of reference for my position on health care reform legislation.

Allow me to address a few issues:

A government plan is more efficient

Medicare is cited as having lower administrative costs than private insurance and that is true, but it is also true that it is not an apple to apples comparison.  Many of the expenses associated with running Medicare are not included in its administrative costs (advertising, some salaries, and websites, etc.).  In addition, some experts argue that program costs should be higher, in part, so there is more oversight over fraudulent claims.

Medicare is providing coverage to the oldest and sickest segment of the population, which means more hospitalization and less high volume lower dollar claims such as pediatric care, obstetrics, etc.  In other words, Medicare is processing a different variety of claim allowing lower administration costs relative to dollars spent.  That will not be the case for a broader government option.

Some claim that the federal government will do a better job negotiating fees.  I never knew the government to negotiate at all when it comes to health plans, the fees are set, and often lowered to meet budget requirements.  Medicare and Medicaid payments result in higher billing to the private sector. In the absence of the ability to shift costs to the private sector, the government’s desire to control costs must result in some form of rationing.  It happens in every government run health system and it will happen in the U.S. as well.  The American people do not understand this; they also do not understand that eventually they will need to carry supplemental coverage as many people in the UK do.  That is not efficiency.

While there may be some initial savings in a government plan, absent doing exactly what the private sector does to control costs, a government run plan will continue to experience escalation substantially above the general rate of inflation. A government plan will be influenced by the political winds of the time and well meaning people will see their efforts subverted by political objectives and pressures, just as they are in existing federal and state run programs.  It happens in every function in which the government operates.  By the very nature of government, (politically driven decision-making) it cannot truly be more efficient than the private sector.

It is said that a government plan will introduce competition, but it will never be a level playing field.  More important, if there are insurance cooperatives to make it feasible for anyone to get coverage, an individual and or employer mandate and a level playing field among private insurers as proposed in pending legislation, there will be plenty of competition, real competition.

Also, see the next section.

Profit is bad

Everyone one of the HMOs on which I served on the Board of Directors eventually went out of business.  In large part, it was because they were all non-profit.  The mentality to run a non-profit or government organization is quite different from the real world.  There is far less reason to take needed action, to be efficient or to look for innovative ways to control costs (note that employers have been driving all the innovation in health benefits in attempting to control health care costs because they have a financial need to do so).

Let us look at NJ for an example of government in the employee benefits business.  New Jersey has one of the most inefficient, high cost health plans I have ever seen. Politics and the unions have driven costs higher and higher.  Recently, the State changed its rules to allow couples both enrolled in the State Health Benefits Plan to apply coordination of benefits.  So, the plan is now spending an extra $12,000,000 so that a relatively few married couples can enjoy benefits with little or no out of pocket costs while the rest of the participants and taxpayers pay more.  New Jersey still uses paper enrollment forms each year and until recently, they were not even scanned, but individually entered into a record keeping system.  Politicians in response to union pressure prevent automation, outsourcing and use of a website, which is common in the private sector. The plan is fraught with disincentives for participants to be efficient in obtaining health care. Virtually all retirees have free coverage, as do many active employees, all this while the State has accumulated a $50 billion liability just for retiree coverage.

This would not happen in a profit driven environment (the auto industry being the notable and quite similar exception) and if it did, the consequences would be dire (again the auto industry). In government, it simply means higher costs, higher taxes and budget deficits.  The CEO pay at Aetna or United Healthcare may make good press, but is not driving health care premiums higher; it is the cost of health care, just as those costs drive Medicare into insolvency.

Finally, keep in mind that nearly 70 million Americans are covered by self-insured employer health plans.  The administrator, be it an Aetna, United Healthcare or a Blue Cross plan has no profit motive to deny claims. They do not determine the co-pays and deductibles.  The employer and the collective bargaining process do. These are ERISA plans run for the benefit of participants.  There is no pre-existing condition exclusion or premiums based on health status. The administrator receives a fixed fee per employee per month to adjudicate claims on behalf of the plan.  No profit motive, but a strong desire to control costs on the part of the employer, and yet all these plans struggle with the cost of health care because the underlying cost of that care, the inefficient delivery of health care and the health status of Americans is what drives premiums.  Those three items must be the primary focus of health care reform.

No deductibles, no co-pays and no denied claims

Some proponents of a government run system make the point that with such a plan the claim denying and co-pay raising tactics of insurance companies will be non-existent.  Medicare and Medicaid do not deny claims or raise deductibles?  Of course they do and why not?  Do people think the Medicare deductible should be the same as it was in 1965, and if so who pays the increased cost?     

To have even the slightest hope of controlling costs; deductibles, co-pays and coinsurance must keep up with inflation, claims must be fairly and aggressively adjudicated and that means some claims will be denied (unless one believes that every doctor and every patient work together to provide the most efficient and necessary health care).

The truth is that patients demand the “best” in health care and they want what they want when they want it.  Health care providers are all too willing to provide those services and in addition have their own motives to do so.  Any semblance of controlling costs must include some patient cost sharing and oversight for the appropriate level and intensity of claims.  In short, is the care medically necessary; is the most appropriate level care being provided?  This is the root cause of many denied claims and that will not change under a government run system.

I once had a claim by a family with an eleven-year-old girl receiving IV treatment for Lyme disease.  The costs were several thousand dollars a month and went on for nearly a year. Finally, our plan administrator denied the claims as not medically necessary.  Our benefits committee heard the appeal after we requested an independent third party review.  I will never forget the comment by the independent reviewer that what they were doing to that girl bordered on child abuse.  Of course, with private insurance these are the stories that make good headlines.  The truth is that the vast majority of claims are valid (at least by today’s treatment standards) and paid by the health insurance plan.

Unintended Consequences

The greatest mistake we can make is to allow Americans to think that a government run plan, coverage mandates or low co-pays have solved the health care problem.  Without a visible and fair direct stake in the cost and utilization of health care, the cost to America will continue to grow out of control, but the true cost will be in hidden taxes, and in deficits and eventually in some form of rationing.  If we continue to let people think that coverage for 47 million Americans, (a questionable number) is the primary issue or that government alone can solve the cost issue, we are headed for a fiscal disaster down the road.

A final note

Today, we are caught in the moment focused on health care reform with a short timeline to change a major segment of the US economy and one of the most emotional aspects of personal consumption.  We know we have a cost problem, and a quality problem.  However, we also have another problem.  America is mortgaging its future.  The fiscal well being of the United States is the most important issue we face, more important than health care reform and more important than expanding coverage. The first priority must be to control our costs.  Legislation that expands coverage in the short term with unproven cost control measures effective only several years in the future will not serve the best interests of the Country.  Paying for something at the federal level by shifting costs in any form to the private sector does not solve the problem, but passes a burden within the economy.  Saving money by lowering what the government pays in Medicare and then using those savings to fund more entitlements does not help the overall economy.  This is all one health care system, not a public and a private system.  Savings, just like the cost must be shared equally. 

This is no time to buy a pig in a poke.


An employee benefits professional

A seasoned citizen

A taxpayer


This is Murder

30 Jun

What is the typical sentence for first degree murder?  Twenty-five years to life in prison (or in some states death).

What is the sentence for ripping off a large number of rich people?  150 years in prison which any way you calculate it is a life sentence?

This is the maids job, this is the maids job.

This is the maids job, this is the maids job.

Hey, don’t get me wrong I have no sympathy for Bernie, but give me a break 150 years, what’s the point?

Take all his assets, give him a dose of his own medicine and send him to prison for 25 years (not that it matters at his age), but 150 years?

Perhaps on appeal he can get it lowered to the lesser of 150 years or life.

If you are under age 65 or an employer providing prescription drug coverage, beware!

29 Jun

The recent agreement between the pharmaceutical companies and Sen Max Baucus to provide a 50% discount on prescriptions to people on Medicare who find they are within the so-called donut hole is interesting.

Interesting because no one seems to question the consequences of the companies giving away $50 billion, like higher cost for the rest of us.

In additi0n, what about employers who have opted for the federal rebate in return for continuing prescription coverage for their retirees.  Do they share in the discounts? The agreement contains a yet to be explained incentive for employers to stay in the game.

Read more here:  Senate Press release

Does this building look like a college campus?

29 Jun


Capital U

Capital U

I was wandering the halls of Congress recently (yes, with a specific purpose) and I was immediately struck by the environment.  Where was I anyway, this looked familiar.  Then it dawned on me, what I was feeling was the environment on a college campus.  Walk through the various House and Senate office buildings and you immediately notice that it is likely you are the oldest person in the area except for the actual Members of Congress.   I swear the average age cannot exceed thirty and there appear to be many a lot younger than that.  

My mission was to “educate” some of the staff as to the pitfalls of proposals for health care reform.  As I sat across the table explaining our views on this important topic, it was like looking at my daughter in her senior year of college.  Here I am a member in good standing of the AARP…good standing may be a stretch…and the fate of my health care (and a great deal more I suspect) is in the hands of an ingénue who has never held a real job.  Now, don’t get me wrong these are very bright, motivated people, perhaps a little too motivated.  They are committed and out to change the world. They believe that if the studies, projections and reports say it will happen, it is going to happen.  You know, almost like a project plan at work or implementation of a long-term vision.  They think that if people agree to something they are actually going to do it.  Do they teach that in real world 101? 

Many of these folks are “fellows.” Fellowships are like on the job training for intelligent people who have yet to learn that being intelligent is often not sufficient, you have to be smart as well.  Fellows are typically recent college graduates who are on the job for a relatively short period and then move on to bigger and better things. They are paid very little.  They are in short idealists.  In fact, one website where you can find fellowships is called “” 

How do you feel now, your fate is in the hands of twenty-somethings, politicians (many whom are lawyers) and special interest groups, but I bet you knew that already.  Smile and hold on to your wallet.laughingcharacters

The Employer Mandate

29 Jun


Several years ago, I wrote an article supporting an employer mandate as the least objectionable way to expand health care coverage in America.  Small business owners roundly disparaged me.  They could not afford it they claimed. 

Did I say 8%?

Did I say 8%?

Indeed, it would be a financial burden, but given everyone would have the same obligation I argued, costs go up for everyone and thus no one player is disadvantaged.  In lieu of that, others argued that it would be better to have a government plan.  However, said I, to do that you would have to pay for it and by my calculation that would be about 8% of payroll and once that was in place the employer would lose all control over future costs.  Now, given that health care costs typically rise much faster than wages, it is not hard to see that with pay going up say 3 to 3.5% a year and health care going up at least twice that rate, the 8% would quickly be inadequate. 

To my amazement and in confirmation of my considerable prognostication skills (hey, I sound like Rush), the current version of the House Tri Committee health care reform legislation requires employers to offer health benefits or pay an 8% payroll tax

Pay with some control or pay with no control over future costs, take your choice.

A Decision You Can’t Affrord to get Wrong

29 Jun


Over the years, I have had employees routinely tell me they took a full distribution from the 401(k) plan upon leaving the company or retiring and rolled it over into an IRA.  My typically reaction was, why?  I tried to say this gently as I did not want to put the person on the defensive. 

Know where it is going

Know where it is going

The most common answer was that they had gone to “someone” who advised them that was the best course of action, as they would have more choices in investments.   Umm, best course of action for whom?   I wonder if the “someone” also told them that he or she made a commission on the deal or is compensated based on the total assets under management or that the fees within the IRA and the funds would likely be higher than within their employer plan.  I am guessing not so much. 

The plan I am talking about has total expenses and I do mean total of 0.18% and through a brokerage window access to several thousand mutual funds, plus three pre-mixed portfolios, seven core funds and target retirement funds, an array well suited to meet just about anyone’s needs. 

I have also had people retire and immediately convert their 401(k) balance into an annuity.  That may not be a bad idea if your 401(k) plan is your sole source of retirement income, but I am referring to people who have a defined benefit pension as well.  Such a move may look good at the start, but that larger total annuity income is still not going to keep up with inflation.  In today’s economy it is hard to tell people to stick with a growth strategy involving the stock market, but that is what has to be done.  One of the biggest mistakes people make is setting their investment horizon at the date of retirement when in fact for many people the 401(k) plan will not be in play as a source of income for several years later. 

Many if not most employers who sponsor a 401(k) plan allow terminated participants to maintain the account at least until age 70 and often for life.  It is good business to allow the account to remain in effect because the higher the assets in the fund the lower the fixed costs are as a percentage of assets. 

It is also good business to communicate the issues and alternatives to employees with regard to plan distributions.

We are All Socialist at Heart…it’s easier

27 Jun


According to the Wall Street Journal (May 4, 2009) a recent Rasmussen Reports poll shows only 53% of Americans prefer capitalism to socialism; 27% were unsure and 20% preferred socialism. That may explain the results of the last election.

Assuming, of course, Americans ever felt differently, what happened? Well, when things get tough and the poor personal decisions people have made come to roost socialism can be appealing.  It minimizes personal responsibility and it is a lot easier to rely on the other person.

Socialism is easier it is that simple. Look at it this way, once you get used to paying more than half of your income in taxes to the government, your worries are over. You don’t know or care that the money is being spent inefficiently or that you have turned over control of a large part of your life to the state, all you know is that you do not have to worry any more about health care, retirement income, education, childcare, disability or unemployment. It is all quite appealing is it not? In Sweden, the average worker takes 40 days a year off enjoying the generous disability benefits and that is in addition holidays (vacation). 

Nobody has to be an ant, we can all be grasshoppers. Why work hard, just work hard enough to pay your taxes and save a little energy to march from time to time in a protest to preserve your benefits at all cost.  That cost of course is mediocrity, disincentives to achieve, to create, to innovate. 

What happened to America that we all seem to have our hand out from mega companies to members of the AARP?  Is that what America is all about?  Is being average the new goal?

Your 401(k) plan is in the tank, who cares, you have a good government pension. Your employer is screwing you and taking away your health care that you thought would be part of your future retirement, so what? You bust your butt to work hard and save more, no need, half of what you make is gone before you have it so why bother? There is always someone else to worry about where the money is coming from and of course, that 50% tax rate can always go up.

There are added benefits too, we are all equal. The mediocre among us no longer stand out, the slackers are no longer at risk and the real achievers; well they may get to pay 70% of their income in taxes. 

Umm, do I really need to go to work today?

Umm, do I really need to go to work today?

Socialism is so easy I think more and more Americans will conclude, hey why not? There is one big test coming and that is health care. Keep your ears open and listen to how many people you hear say they want “free” health care from the government.  That is what they have in England after all. I have people there tell me their health care is free.  They go to the doctors and pay nothing, and they like it that way.

Socialism is not only easy it can also be free.

The Message

26 Jun

 I, like most Americans, spend a fair amount of time watching TV and much of that time is watching commercials, not by choice of course.  Thank God for Tivo ® and fast forward. 

I wonder, do commercials reflect our society or simply the morons who think them up?  I know most are straightforward, and some are actually entertaining, some are just dumb especially the homemade variety for auto dealerships, but I can understand that. On the other hand, some send a disturbing message. Oh, I don’t know like destroying property, doing stupid things, or simply trying to get away stealing. 

Here are a few examples, a child is playing in the yard and covered with mud, the mother says as soon as you get cleaned up we can go for ice cream, so the father simply turns the garden hose on his son and when he falls backward he sprays him again.  

A women is checking out at IKEA and notices her bill with surprise, the screen reads “It’s not a mistake” but the women thinking it is runs out of the store screaming, “Start the car, start the car” jumps in and speeds off yelling with delight thinking she has just ripped off the store. 

A young woman stops her car pulls out a chain saw and cuts down a telephone pole that falls into a string of polls all of which come tumbling down.  I bet the phone company loves that and no doubt, some imitator will try it.  Where is a cop when you need them? 

Oh hell, I don't need him anyway

Oh hell, I don't need him anyway

However, it is not only those that send an absurd message, we are now heading into new territory with television advertising.  I was watching the Lifetime network recently and could not believe my eyes (or ears).  Two young women were discussing and whispering about the benefits of a new product.  An older woman overhears the conversation and says, “I ‘love’ mine.”  I bet she does, no pun intended.  What could it be, new nail polish remover, new hair remover, or a fantastic new diet pill? 

Hey be creative, see for yourself what’s advertised on TV these days. You may want to get a bottle of wine and turn on some mood music first. 

Here’s the link:  Fun With Dick and Jane, or at least Jane

What are these advertisers thinking?

Monkey Business

26 Jun


The political partisanship in the US is at an all time high (I do not know that for sure, but it sure seems like it). How did we get to the point where a view different from the party in power is only perceived as obstructionist? We cannot agree on anything and doesn’t it seem strange that regardless of the topic all the Democrats see an issue one way and all the Republicans the other.

Are there no free thinkers? Is it just coincidence that your political party affiliation aligns perfectly with your views on just about any subject? How quickly a new member of Congress seems beaten into submission. As General George Patton said, “If everybody is thinking alike then nobody is thinking.” Boy if that is true, is Nancy Pelosi the only person who is thinking in the House of Representatives?

It didn’t start out that way, the first few meetings of the Congress went quite well with widespread cooperation, and these folks had not the slightest idea what they were doing or how to do it. One thing was different however; they saw serving in Congress as an obligation and for many it was a tremendous financial and other hardship. They did their duty for a term and moved on. Today politics is a career, a power trip and often quite lucrative if you play your cards right.

No, I'm not going to tell you how I voted

No, I'm not going to tell you how I voted

However, don’t lose hope; there appears one area where there is total and complete bi-partisanship. When it comes adultery, philandering or just plain reprehensible behavior, the party affiliation melts away. Actually, for a short (very short) period the party heads in the other direction. I suppose there is nothing new in all this, but I am getting tired of seeing powerful men fake contrition and tears. Are there no female politicians who cheat on their spouse?

Ten Years After the Summer of 2009

26 Jun


On June 24, for the first time listening to Barack Obama I was left with a ho hum feeling.  Typically you are either jumping with enthusiasm (maybe you, not me), or you are left with a modest depression.  Last night he discussed health care reform, a topic I do know something about.  Sure everyone raised their hand when asked if the system needs fixing, but we all know that.  The President’s replies to tough questions were rather bland I thought and of course they did not address the real issue or answer the question, but then again neither did the CEO of AEtna. 

Obama danced around the question related to the government option being proposed relying mostly on the competition theme from no profit motive and no large overhead, but ignoring the issue of underpaying for medical care as does Medicare.  Although no one asked the question specifically as I recall, it would be interesting to learn why we need a government plan other than to get the government into the health care business more than it already is, especially in the face of an employer mandate, a connector to make coverage available to individuals and subsidized coverage for lower income  Americans.  I was pleasantly surprised at the low key nature of the sales job, there were no horror stories. A man from Massachusetts stood up and said he did not have health coverage and could not afford it.  I do wish the President asked him how that was possible given that Massachusetts has an individual mandate to obtain health insurance, but that wasn’t going to happen.

It is hard to argue with a point of view that supports higher quality health care, health and wellness programs, and administrative efficiency.  The little secret is that any benefits from those initiatives will take years and years to attain, while the cost of expanding coverage, of subsidizing the lower income (defined quite generously by the way) and generating an increased demand for health care services will be immediate.

A private group analyzed the cost of the House of Representatives draft legislation and came up with $3.5 trillion over ten years (compared with $1.5 trillion for the Senate version).  The truth is that the problem is so complex the time frame so long and the variables so great nobody knows which begs the question, why the three month rush to figure this out?

Mr. Obama, slow down and get this right because you won’t be in office when we know whether what you want to do worked or not, but the rest of America will be stuck with the results of the summer 09.

How do I get to be the customer that is actually being assisted?

25 Jun


“All of our representatives are busy assisting other customers,” sound familiar?  

“Your call is important to us, please stay on the line.”  Funny, I do not feel important.  

“We are experiencing unusually high caller volume.”  Yeah, right.  If you have such high call volume, maybe all your services are screwed up and that is why so many people have to talk to the next available representative. 

I just spent 15 minutes (yes I timed it) on the phone with a bank waiting to be one of those lucky customers.  When I finally reached a real person, I was placed on hold and then transferred to another person.  However, there is a game you have to play just to hear that uplifting message. You have to figure out the correct number to enter, and it truly appears that they have the systems designed to keep you in a never-ending loop.  Take notice the next time you get into a voice system how infrequently you hear the instructions on how to get to a real person.  There are times I feel like I am building a meaningful relationship with the digital voice (notice it is always a women). 

My phone company is the worst. It is nearly impossible to get further than the instructions on how you can go check your own phone before you can have any hope of talking with a person.  When you do get to a person the first thing they ask is if you want instructions on how to check your own phone for the problem.  No thank you, it is pouring rain and I do not want to take a handset out to the box on the side of my house and plug it into the jack to see if there is a tone.  CAN YOU HEAR ME NOW? 



When you do figure out how to reach a representative they are always “assisting…”   After banging your phone for a while try just 0 or #0 or *0 or even 88 at any point.  Of course, you run the risk of going back to the top of the tree or worse you may be asked if you want to hear the instructions in English.  I’ll try anything. Are there fewer customers being assisted on the Spanish line, I wonder? 

I have a solution, if my call is so important then put more customer service representatives on the damn phone.  Of course, my call is not important, they don’t want to talk to me for fear that I may have a questions or problem that pressing 1, or 6, or 8 will not resolve and instead requires some human being to think and that generally presents a problem.  

The next time you reach a customer service representative, try this, ask if they can hold for a few minutes as you have been waiting so long you have to take a pee. Then you will find out just how important you really are.

What’s that they say about the details?

24 Jun


Controlling cost is in the eye of the beholder

Controlling cost is in the eye of the beholder

Where are we headed with health care?  Here is a small sample of the language contained in the draft House bill that is 852 pages long.  For those of you who have operated a health benefits plan the following easily indicates that added costs are on the way.  The goals are noble in health care reform, especially those to raise the quality of health care and to remove the incentive to provide more sometimes unnecessary care.  However, the health care legislation as drafted will increase costs even excluding the cost of adding coverage for the currently uninsured.  The question then becomes can we afford the time it will take (assume it works) to change the fundamental delivery system.


Some required covered services:

7 (10) Well baby and well child care and oral

8 health, vision, and hearing services, equipment, and

9 supplies at least for children under 21 years of age.






13 There shall be no cost-sharing under the

14 essential benefits package for preventive items and

15 services (as specified under the benefit standards),

16 including well baby and well child care.


7 (C) USE OF COPAYMENTS.—In establishing

8 cost-sharing levels for basic, enhanced, and pre

9  mium plans under this subsection, the Commis

10  sioner shall, to the maximum extent possible,

11 use only copayments and not coinsurance.

Note the request to use only co-payments and not coinsurance.  Here is another prescription for growing costs.

The AARP wants more…so what’s new?

24 Jun


When I came home today there was a message on my answering machine, oh no another salesmen (my Word spell checker says to use salesperson or sales clerk, but I think I will stick to the original). Well, not exactly.

It was a call from the President of the AARP, at first I was truly flattered after all how many times does a seasoned (I refuse to use senior) citizen get a call from THE president.

I was urged to make a difference.  It seems millions of seasoned citizens are stuck in the gap, in the donut hole as they say with prescription drugs.  I was told that these people were required to pay the full cost of their prescription drugs “even while they continued to pay their Medicare premium”  That sounds like the rest of us who pay a premium even while we still have a deductible to meet or we have reached the limit on a portion of our benefits.

I have to pay for what?

Even though I can empathize with these Medicare beneficiaries struggling with the cost of prescription drugs, the AARP seems a bit out of touch.  First, the country could not afford Part D of Medicare in the first place.  Yes, it is imperfect, but yes, it does provide coverage that did not exist before and yes, it does protect against the most catastrophic prescription drug expenses.  How can the AARP seriously think that the American taxpayer in a time of growing deficits and about to happen higher taxes can afford to add more to the obligations of Medicare?  Oh, and at the same time the administration is attempting to fix health care with another $1.6 trillion in deficit spending (I always wanted to use the word trillion and now it seems as common as million, inflation I guess).

The AARP makes it very convenient to help in this effort.  I am told to call and I will be connected to my representative in Congress.  I am sure they will be thrilled to hear from me.

Feel free to call the 800 number and tell your representative what you think about adding to the cost of Medicare.

I never thought much of the AARP; it is a bogus organization in my opinion, now I think even less of it.

CORRECTION You Won’t Pay for My Liposuction – see you in court

23 Jun

 It now appears that the following will only apply to those plans which purchase coverage through the new proposed health insurance connectors.

The just released House version of health care reform contains a section with regard to ERISA pre-emption that applies to self-insured plans as well.  

Simply put, this change would allow employees to file a claim in state court against the plan sponsor not only for the value of the claim, but for damages as well.  In other words, the potential liability for employers is no longer limited to the value of the denied benefit as it is under ERISA via federal court.  

Home sweet home

Home sweet home

If this provision is contained in the final version of health care reform it is a good bet that lawyers will find this a source for new income at the employers expense and unions may find this an interesting tool to encourage their members to seek legal redress for what now is a mere claim appeal. 

Think of the open ended possibilities.  An employee is denied a certain service as not medially necessary; an appeal is made to the employer and denied based on medical evidence.  The employee then has additional medical problems; claims they are related to the previous services which were denied and files a lawsuit in state court for damages, pain and suffering and who knows what else. 

How many employers will tolerate that kind of liability? 

Of course, the proposed legislation bars this type of action from occurring under the new government option health plan.

Just Negotiate

22 Jun


I was reading the Op—Ed piece by Paul Krugman in the New York Times this morning, something about democrats, centrists, health care and we need a government run health care program, silly stuff like that.  Then I read words about the government having better bargaining power with health care providers.  That got me interested.  Umm, bargain, negotiate, like the federal government does with Medicare and Medicaid providers?  Let me see, in this context bargain means that Congress passes a law reducing Medicare payments by 11% and then the providers who are losing money on the deal pass the costs they can’t get from the government on to the private sector which is then blamed for rising health care costs.  Boy, those doctors and hospitals must be lousy negotiators. 

Now, if there were a single payer system the governments negotiating skills would have even more of an impact.  Budget overruns and costs too high; just reduce payments, limit coverage, delay care, and raise deductibles.  My mind must be wandering, am I in Canada? 

I hope that you are a good negotiator.

The Times also contains an editorial on the subject and again the insurance companies take the hit with the government held out as the entity better able to get lower fees from providers and not have the profit motive.  Let’s point out again, Medicare is only as bad off as it is without major cuts in benefits and higher premiums and higher deductibles because it is able pay below market fees with the private sector picking up the difference.

The just released House version of health care reform includes a provision under which the public plan option would be allowed to reimburse at Medicare rates for the first three years with no requirement to pay competitively after that. 

Do you see where this is going?

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