Archive | June, 2010

Early Retire Reinsurance Program Application – here it is

30 Jun

Ready to get your share of the retire reinsurance money?  Employers need to act fast and be 100% accurate with their application.  Retirees will share in this benefit as well, ask your employer.

Here is the site to get your application.   Retiree Reinsurance Application

An HMO by any other name, except Medicare beneficiaries won’t have a choice-Accountable Care Organizations and Community Health Teams

30 Jun

Coordinated, managed care is a good thing and something that is sorely lacking. 

However, the government should tell people the truth about  Accountable Care Organizations (ACO)  and Community Health Teams rather than burying the ACO in the PPACA  or just alluding to the health teams in a Joe Biden e-mail. The goal of PPACA is to greatly change not only the way health care is paid for, but how it is delivered.  This effort is not new, the concept of the pure HMO was tried forty years ago (HMOs for the most part are no longer true coordinated care organizations).  I say tried because the goal of managing care through coordination among physicians in a somewhat closed environment was roundly rejected by both physicians and Americans.  That is not to say the concept is bad, in fact the opposite is true. 

The questions are how much do we want the federal government in this process and is there any reason to believe that these new experiments will work any better than past attempts?  One could argue that we are in a different environment, that costs really matter and yet back in the 1980s health care inflation was higher than it is today. The one factor that has not changed is people and their perception of health care and how it should be provided.  During the health reform debate politicians were very careful to avoid the “R” word – rationing, but the truth be told there is no way to control health care costs other than with some form of rationing.  Managing health care, coordinating care is a form of rationing, most likely good rationing, but rationing nevertheless.    The real trick is to change the way health care is perceived by both patients and physicians. Is government control the best way to do that?  There is one other key factor in all this that is rarely mentioned, if we are successful in our desire to change health care in America physician income is likely to decline. Should we discuss the consequences of that happening?

From Bloomberg Newsweek:

In the meantime, doctors are being driven together in practice by health reform and “solo practices could be on the way out,” National Journal reports. “The health care reform law created pilot programs within Medicare to test [accountable care organization] models, with the expectation that they will begin to revolutionize the way that all doctors and hospitals deliver medical care. Better coordination between medical providers, the theory goes, should result in higher-quality care and lower costs. Beginning in 2012, the participating organizations, which will include doctors and hospitals, will be responsible for the overall care of the Medicare beneficiaries they serve. If an ACO measures up, its medical providers will share in the savings.”

Doctors are increasingly looking to band together in ACOs to reduce costs and put themselves in line for the Medicare money such organizations are likely to see after health reform is implemented. “The big question now is not whether accountable care organizations are the future, but who will control that future” (Werber Serafini, 6/26

More on Accountable Care Organizations here and here.

Why the value of your health benefits is on your 2011 W-2, thank the Senate Finance Committee

29 Jun

Wow, that is a lot of money!

How much does your health care cost, how much does your employer pay for your coverage?  The chances are you do not know the answer to either question.  You may not even know what you are paying through payroll deduction.

The government wants to educate you on those matters and that is the reason why the value of your health benefits will appear on your 2011 W-2. The requirement to put this information on the W-2 originated in the Senate Finance Committee version of reform.

The purpose of the provision is to provide employees with greater awareness of the costs of health care, presumably on the premise that an informed consumer might engage in conversations with the company to find less costly options. if any employer needs encouragement to find a less costly option. Whether one agrees with that or not, that was the intent, to provide employees with more information on the cost of their health care. Some employer organizations argued that if that really is the only reason for it, then employers (mostly large employers) that already provide that info on an annual total comp statement for employees should not also be required to do so on the W-2.  That argument was ignored.

How will the health value amount on your W-2 be calculated? It will reflect the value of the coverage you have based on the COBRA premium for that coverage.  Therefore, if you have a plan that would cost you $1,000 a month if you lost your job and continued benefits under COBRA, then $12,000 will appear on your W-2 at the end of 2011.  The 2% administrative cost added to COBRA premiums is not included in the value reported.

Adding this information to the W-2 will mean a great deal of effort on the part of employers and considerable administrative expense as well. If you think about it, coverage does not stay the same for an entire year, employees are hired, terminate employment, add children, get married, get divorced, etc.  In addition, many employers offer one or more alternative plan to choose from each with a different value.

Some people believe there are secondary reasons such as data collection, tracking medical inflation, and better determining the revenue loss due to the tax-free status of these benefits.

Regardless of the reasons, one thing is clear the value of health benefits placed on the W-2 is not added to gross income and is not taxable.

Health insurnace companies really deserve the beating they are getting…just for being stupid

28 Jun

If there were bonuses offered for being dumb, executives in health insurance companies would be up there with the wealthiest people in the world (no, despite politically rhetoric they are not there yet).

Now I got them right by the . . .

First we have the WellPoint 39% rate increase in the middle of the health care debate, then we have other insurers withdrawing their rate increase requests because they found errors in their calculations, “simple human errors” in one case we are told.  In light of the fact that every eye in the nation is on health insurance premiums as the cause of all our woes short of war, wouldn’t you think that insurance companies would check their math.  Give me a break; you people deserve to be chastised just for being stupid.

In addition, the insurance industry has done a miserable job of explaining the reality of insurance and why some things are contained in a policy and what they do.  They have said little to the public about rising health care costs and instead have let the public be inundated with stories of insurance company “abuses” and “discrimination”.  They have said nothing in response to charges of interfering between the patient and doctor or taking away the patients right to be in charge of his care. 

Corporate America is noted for doing stupid things and then complaining about new laws and regulations to address the results of those actions.  The case of health insurance companies and health care is a classic (likely to be over shadowed only by BP).

Here is an idea, while the politicians were beating up the insurance industry for higher health care costs via premiums, insurance companies could have pointed out that 70 million Americans enrolled in self-insured plans experience the same high increases in health care costs while many workers in those plans were seeing their payroll deductions rise by double digits – without the existence of health insurance!  Duh? On the other hand, they could also have just pointed to Medicare cost increases, no insurance there.

That’s it, I have tried to explain the facts and realities of insurance, I give up, you are on your own health insurance companies of America. Pssssst, in a few years there will be far fewer of you out there.

America deserves better than street politics

26 Jun

I listened to the President the other night when he talked about the BP oil spill and then I listened to members of Congress grill the BP CEO.  In the first instance, I said to myself, “what an arrogant person he is.”  In the second instance I said, “Who the hell do these people think they are and why are they going through this now while the oil is still spewing into the ocean?”

In the first instance, it is not hard to conclude that we do not have a leader in the White House; we have a politician who will take just about any tact to look good and be popular.  We have a person who apparently does not understand the value of the private sector in our world.  He is neither a visionary nor an idealist; he does not seek people to follow, he bullies into conquest. His agenda seems to be just passing as much legislation as possible to make good on his “change” promise without regard to the long-term implications of the laws and certainly without considering opposing views.

He surrounds himself with manipulators and those who are concerned with “not letting a good crisis go to waste.”  We now have a government that fires a CEO as in the case of GM, but says little about the president of the UAW, who had at least equal culpability in the demise of General Motors.

They circumvent the law and bully a company to create an escrow account, where a government employee will decide who is paid and how much.  This administration pushes through a health reform law while telling people nothing bad will happen when in reality millions of Americans will not be able to keep the coverage they have and like. Millions more will pay considerably more for the coverage they do keep. All the while, we expand coverage and do little to change the health care system and its cost drivers. Instead, we do our best to convince Americans that the problem is health insurance premiums.

Members of the House grill a CEO for not knowing every detail involved in drilling one of many oil wells; yet these are the same people who vote for a massive law changing health care in American with few, if any, of them reading each word of the legislation.  Who is more irresponsible, the CEO or the members of Congress?

What did we have to do with it?

Congress and the Administration bash banks and financial firms, blame them for the housing bubble and following fiasco, and ignore their part in creating the environment that let all this happen and continue to do so through Fannie and Freddie.

We hear our President rail about the environment, build wind turbines and solar panels all over the land and yet we hear little about the cost of all that on the average consumer.  Like the rest of the world, we could stimulate the economy, help the environment and use far less land to do it if we embrace nuclear power (including not backtracking on the disposal of waste).

It is not a matter of letting BP or any other corporation off the hook, if they are liable they pay, they may even go out of business.   This Country needs health care reform, but we are still waiting.  We need a comprehensive energy policy and we need to do better for the environment.  There is no question about the things we need to do.  The question is how we do them and about telling the American people the truth and the consequences of what we do.

Yelling, kicking ass, creating scapegoats from Wall Street to insurance companies, diverting focus from the real issues and attacking individuals is not leadership, it is down and dirty street politics.  America deserves better. The President would do well to focus his legacy on assuring that the United States retains it world leadership position in all respects and that includes financial integrity and a functioning political system based on the fundamental structure of our democracy.

Say it again Sam, PPACA is not health care reform and it cannot keep the promises being made

26 Jun

You are no doubt tired of hearing me point out the many flaws in health care reform, perhaps you don’t care any more.  That certainly seems the case with the Administration as HHS and DOL crank out regulations designed to promote their ideas taking full advantage of the many open ended provisions of PPACA .  HHS’s latest effort, the Patient Bill of Rights is yet another indication they just don’t get it or don’t’ care.  The Bill of Rights is no more than a rehash of all the changes designed to eliminate insurance company “abuses.” - or another way to look at it, underwriting rules designed to protect the insurance company and all its customers from risk.  Here is a thought, if you buy a policy from an insurance company, you are not its patient, you are its customer.  You are the doctor and hospital’s patient. 

 James C. Capretta, Fellow, Ethics and Public Policy Center writing for the Kaiser Health News does an excellent job of summarizing the serious flaws in PPACA and why the promises made by the President and members of Congress cannot be kept.  Here is a sample from About Those Presidential Promises, but I urge you to view the entire article.

No, your costs are not going down

First, during the presidential campaign, Obama promised on numerous occasions that families with existing coverage would see their annual premiums fall, on average, by $2,500 per household. Jason Furman, an adviser to candidate Obama and now an economic aide in the White House, even said that the Obama campaign team believed this level of premium savings could be fully achieved, or nearly so, by the end of an Obama first term.

Squeeze the balloon in one place and it will expand in another

A recent story in the New York Times reported that employee benefit professionals expect the health law’s new insurance requirements will add 2 to 3 percent to job-based premium costs next year. One way or another, firms will pass on these added costs to their workers, in higher premiums, higher cost-sharing requirements or reduced cash wages. With the cost of family coverage at about $14,000 per year, that means the new law will cost households $400 or more in 2011. And that doesn’t yet account for the new taxes on the health sector that will get passed on to consumers, or the large premium increases expected to be imposed on younger and healthier people from the more sweeping insurance changes coming in 2014.

Changing the health care system means someone does come between you and your doctor, and that’s the truth (and not all bad).

In the meantime, the only plausible cost-cutting ideas are the “delivery system changes” promoted through Medicare. The law’s proponents are especially keen on the potential of Accountable Care Organizations.

Under the new law, ACOs are a concept to be tested, starting in Medicare. The hope is that they will induce physicians and hospitals to practice less expensive managed care through payment incentives. But it’s far from certain that the provider community will embrace them, given the inevitable red-tape that comes with government-initiated “reforms.” Moreover, Medicare’s enrollees may rebel when they find out that the test allows the assignment of Medicare patients to ACO networks without their consent or even their knowledge. Banking on big savings from something with so many question marks and implausible assumptions is wishful thinking in the extreme. At best, it will be many years before ACOs make a difference, and there’s a good chance they never will at all.

Your employer-based health plan is at risk, your employer will react to PPACA and you will see changes and likely higher costs

In a nod toward the other key presidential promise — that you can keep what you have today — the new law includes a provision that allows “grandfathered” plans to remain in place even as new sweeping insurance regulations impose requirements, and costs, on other insurance products. But the Department of Health and Human Services has wide discretion to define what constitutes a qualified grandfathered plan under the law. And last week, HHS Secretary Kathleen Sebelius used that discretion to essentially make it impossible for most job-based plans to qualify for the designation. Small changes in benefits and cost-sharing — the kinds of changes most employers are forced to make every year to address changing circumstances — will disqualify those plans from the grandfather designation. That means virtually all job-based health insurance will be forced to comply with the federal government’s new regulatory requirements in just two or three years — something the administration has all but admitted was their intention all along.


The Patient’s Bill of Rights-the government version and a real version

25 Jun

The Administration recently released its version of a Patients Bill of Rights making the announcement in part via a global e-mail  Following is the text of that e-mail.  There are links within the e-mail to see the actual Bill of Rights which you will find is not more than a restatement of the insurance reforms contained in PPACA.   The problem is that the insurance company or plan administrator is not involved in your health care, you are not the insurance company’s patient, you are its customer and you are buying insurance against unforeseen risk just as you buy auto and homeowners insurance.  Of course, we all know that is not true, health insurance is different we need to be protected from each and every cost no matter how minor or routine or even preventive – but that is another story and the ship has sailed on that one. 

Here is what the HHS website says about the Patient Bill of Rights.  When did any health insurance ever prevent Americans from being in charge of their own health? Regulators should stick to regulating and stop politicizing.

Patient’s Bill of Rights
On June 22, 2010, President Obama announced new regulations that include a set of protections that apply to health coverage starting on or after September 23, 2010, six months after the enactment of the Affordable Care Act. These new protections create an important foundation of patients’ rights in the private health insurance market that puts Americans in charge of their own health.

Nevertheless we do need a patient bill of rights.  At the end of this article I have listed what I believe should be in such a document.

Good afternoon,

It seems like everywhere you go in this country, you hear story after story of Americans who have been let down by the private health insurance system.  Parents in Texas unable to buy coverage for their infant born with a heart defect.  A Los Angeles woman forced to stop chemotherapy for months while fighting her insurer’s claim that her cancer was a pre-existing condition. Patients whose life-saving treatments and therapies are cut short due to annual or lifetime coverage limits.

Yesterday, President Obama put an end to these unfair practices once and for all by announcing new rules made possible by the Affordable Care Act. These new rules will take effect for most plans starting on or after September 23rd. They will remove barriers between you and your doctor and help provide the peace of mind that health insurance will be there when you need it the most. You can watch the President and me speak about the people who these rules will help and why we fought so hard to make them part of the new law:

A major goal of the Affordable Care Act is to put American consumers back in charge of their coverage and care.

Here are a few key ways these new rules will help do that:

  • Stop insurance companies from imposing pre-existing condition exclusions on your children;
  • Prohibit insurers from rescinding or taking away your coverage based on an unintentional mistake on an application;
  • Ban insurers from setting lifetime limits on your coverage and restrict their use of annual limits on coverage;
  • Ensure that you can choose the primary care doctor or pediatrician you want from your plan’s provider network;
  • Eliminate the need for a referral to see an ob-gyn;
  • Prohibit insurance companies from requiring “prior approval” before you seek emergency care at a hospital outside your plan’s network.

These rules effectively put in place a basic set of consumer protections known over the years as the “Patient’s Bill of Rights.” This is a concept introduced 15 years ago and supported by both Democrats and Republicans. After years of effort and the passage of the Affordable Care Act, I’m proud to say we are finally protecting those rights and putting health care back in the right hands: yours.

Now, let me touch on a few other updates about what we’re doing to implement health care reform.

Over the past several weeks, we have:

  • Ensured that if you like your current health care plan, you can keep it — by issuing some new regulations for insurance plans that give you, your family, and your business more control over your health care choices;
  • Worked to get coverage to one of the groups who is least insured, young people, through a new provision that will allow children up to the age of 26 to stay on their parents health care plan (a benefit that we successfully persuaded many insurers to implement ahead of schedule);
  • Announced tax credits that will benefit millions of small businesses that have been struggling to provide care to their employees;
  • Begun mailing $250 checks to tens of thousands of seniors who have reached the ‘donut hole’ — a term used to describe the gap in Medicare Part D prescription coverage — to help seniors manage their health care costs;
  • Announced new support to strengthen and expand the health care workforce, including increasing the number of primary care doctors and nurses.

You can learn more at:

The passage of the Affordable Care Act was an historic victory for the American people, laying a new foundation for relief from skyrocketing health insurance costs and for secure, stable, and affordable health care coverage. But passage brought us an important new challenge — implementation — and I look forward to sharing additional news and updates as we steadily turn the promise of health reform into reality.


Kathleen Sebelius
Secretary of Health and Human Services


A real Patient Bill of Rights


The patient: 

  1. has a right to know the cost of services before they are preformed.
  2. must know that no services will be performed unless they are medically necessary for the diagnoses and treatment of an illness.
  3. has a right to expect that his or her physician operates an efficient practice designed to minimize costs
  4. should receive a full and clear explanation of all the implications and potential affects of a medication that is prescribed.
  5. must know in advance if he is being referred to a facility in which the doctor has a financial interests.
  6. must have an easily accessible way to evaluate the quality of the care being provided and of the individual provider of care.
  7. will not be placed on a prescription drug because of the influence of pharmaceutical marketing.
  8. has a right to expect that the health care provider charges a fair and reasonable fee and knows the cost of each procedure or test being ordered
  9. has a right to a clean clinical setting employing every known procedure to eliminate the possibility of infection
  10. has a right to know the location of care is not influenced by unsubtantiated advertising or solely because physician affiliation
  11. has a right to avoid duplicate testing merely because of referral to a new physician or specialist

If the PPACA actually reformed health care in the United States, a patient’s bill of rights would look more like the above.

High Risk Pools created by PPACA may not cost what we think and may not cover who we think..and for good reason

24 Jun

Some of us have accused those who put together the Patient Protection Affordable Care Act of not knowing what they were doing, of misleading Americans and of basing costs on  inaccurate assumptions and using accounting gimmicks. We believe the result is legislation that does not control health care costs and adds considerably more to the federal deficit than we are told.

Here is a letter from the Director of the CBO in answer to a question about the cost and assumptions for the high-risk pools created under PPACA. The cost to the government for the pools is capped under the law at $5 billion, but CBO estimates that the money will be gone before 2014. In fact, the assumptions used by the CBO assume that the government will limit the number of people who can enroll. If not, then the $5 billion will have to be increased before 2014 to cover all the people who may want such coverage.

How do you like them apples, Mike?

Have you heard before that the high-risk pools are likely underfunded, that enrollment will be limited, or the budget increased? Do you think the people who rally around this legislation understand these types of things?  I don’t.

I have placed in bold those statements that I believe reflect the concerns many of us have expressed, take a look.

June 21, 2010

Honorable Michael B. Enzi

Ranking Member

Committee on Health, Education,

Labor, and Pensions

United States Senate

Washington, DC 20510

Dear Senator: 

This letter responds to your request for additional information about the provisions of the Patient Protection and Affordable Care Act (PPACA, Public Law 111-148) regarding high-risk insurance pools. 

PPACA appropriated $5 billion for the Department of Health and Human Services (HHS) to implement a temporary program to operate such pools. To be eligible to enroll,  applicants must have been uninsured for at least 6 months and must have a preexisting medical condition. Enrollees will be charged a standard premium—one that is based on the expected costs of covering a broadly representative population, rather than the costs of covering high-risk enrollees. Federal subsidies to the pools will cover the difference between the enrollees’ premiums and the costs of providing their insurance. The program is scheduled to commence later this year and may continue to operate through 2013 (after which time qualified enrollees could switch to a health plan offered through newly created insurance exchanges). 

In its analysis of PPACA released in March, the Congressional Budget Office (CBO) estimated that all of the $5 billion appropriated for the program would be spent. CBO concluded that the new pools would be more attractive than the high-risk pools that now exist in many states, both because the premium would be lower (state high-risk pools typically charge a premium between 125 percent and 200 percent of the standard premium) and because the new pools would provide immediate coverage for

enrollees’ preexisting medical conditions (current high-risk pools generally do not do so). Reflecting that assessment, CBO estimated that the funding available for subsidies would not be sufficient to cover the costs of all applicants through 2013, so CBO assumed that HHS would use the authority given to it under the act to limit enrollment in the program. On that basis, CBO expects that the number of enrollees in the program will average about 200,000 over the 2011–2013 period. If, instead, more people are allowed to sign up initially, the available funds will probably be exhausted prior to 2013, but total spending for the program will still be capped at $5 billion. 

You also asked about the federal costs of implementing a similar program for high-risk pools that did not cap the funding available. Estimating those costs is difficult not only because of the uncertainty surrounding the number and types of people who would want to enroll but also because several of the program’s features have not been precisely defined. For example, the new high-risk pools are supposed to cover at least 65 percent of enrollees’ costs for health care, on average, but could cover a higher share. The larger the share of costs that the program would cover, the more attractive it would be to potential enrollees and the more expensive it would be to implement—because there would be more enrollees and higher costs per enrollee. Similarly, the law provides little guidance about how the requirement for participants to have a preexisting condition will be met, how applicants’ lack of insurance coverage will be monitored, and how the program will interact with existing high-risk pools

The resulting uncertainty about the program’s design did not affect CBO’s cost estimate with the $5 billion funding cap in place, but how those features are ultimately defined would affect the estimated cost of an uncapped program. At this point, therefore, CBO can provide only a preliminary range of estimates reflecting some assumptions about an uncapped program’s specifications. If the program covered about 65 percent of enrollees’ costs for health care, federal spending through 2013 would probably fall between $10 billion and $15 billion—or $5 billion to $10 billion more than the cap specified in PPACA. Total enrollment in the federal high-risk pool program would be expected to grow from roughly 400,000 in 2011 to about 600,000 or 700,000 in 2013. 

Several factors affect the estimate of enrollment. The number of people who may be eligible for the program is in the millions—much greater than the estimates of participation—but CBO focused its analysis on those people who would be likely to enroll and has not estimated the total size of the eligible population. In the absence of the program, most of those enrollees would have been uninsured, but some would have had coverage from an individually purchased or employment-based plan. (Reductions in

employment-based coverage tend to raise federal revenues because that coverage receives favorable tax treatment, but CBO has not estimated the effects of an uncapped program on revenues.) Although enrollees will be subsidized, many potential applicants will be discouraged from enrolling by the premium they would have to pay and the cost-sharing requirements they would face in the program. Others might be eligible for the program but not aware of it. 

I hope that this analysis is helpful. If you have any questions, please contact me or CBO staff. The primary staff contacts for this analysis are Philip Ellis and Holly Harvey. 


Douglas W. Elmendorf


Once again the lessons are there to be learned and we ignore them

23 Jun

Take a look at this article on Politico.  It is about the health care cost experience in Massachusetts.  That State’s version of reform was to expand coverage and that it has done, but as with the national effort little was done to control costs and instead the blame game was focused on insurance premiums. 

Repeatedly, policy makers ignore basic facts that the real problem is the underlying cost of health care, a complicated problem in itself covering everything from technology, to perceptions of good health care to the lifestyles of Americans.  Yet, we hear over and over that insurance companies must do more to control costs and their premiums.  The expectations many Americans have for low premiums and lower health care costs beginning in 2014 will not be fulfilled.  While many will see their premiums subsidized by the government, the underlying cost of health care will continue to increase and we will come to the point where the money needed to maintain the subsidies will be unsustainable.

The reality is that patients and health care providers must do more to control health care costs.

Too much of a good thing, the disappearing pension and promises that can’t be kept

22 Jun

In a perfect world, we would work for a company for a career, retire and receive a monthly pension for life. That world never existed for most people and for those who came close it is rapidly disappearing.  Employers began eliminating the defined benefit pension shortly after ERISA came to be and the ongoing decline has continued.  Most employers probably wish they did not have a pension plan at all given current interest rates and gyrations of the stock market.  That is not good news for workers who as we know, are increasingly on the hook for their own retirement income.  

There is one exception and that is government workers who typically enjoy not only a traditional pension, but also a quite generous one, frequently with guaranteed cost of living adjustments, something unheard of in the private sector.  However, there is trouble in paradise as governments are now (finally) coming to realize they cannot pay for all the promises made by politicians over the years to government workers and their unions.   

This is not the fault of the workers who like all of us seek the best deal they can get, but that does not change the reality or the facts.  Somebody has to pay for this generosity, today the taxpayers are not inclined to do so, and the states are not likely to go deeper in debt. 

Here is a broader perspective of the problem from the New York Times

Here is an extract from Bloomberg News about San Diego’s struggle with the problem. 

San Diego May Use Bankruptcy to Roll Back Benefits: Joe Mysak 

June 16 (Bloomberg) — The city of San Diego should consider Chapter 9 municipal bankruptcy to help it reduce fringe benefits, pension and health obligations. 

That’s one of the suggestions made by the San Diego County Grand Jury, which does the normal duties of recommending indictments as well as reporting on local governments and special districts. San Diego is the fifth major city in the U.S. this year, and the second in California, where people are talking about bankruptcy as a means to “restructure and reorganize their assets and debts while providing relief from current and future obligations,” in the words of the grand jury’s 22-page report, published on June 8. San Diego has unfunded liabilities of $2.2 billion in its pension plan and $1.3 billion for health care, which the report calls “unsustainable.” More than two years of cutting budgets and the mounting public pension crisis have made the unthinkable an option, maybe even an attractive one. “Municipalities are not required to raise taxes or cut costs to the bone before filing for reorganization under Chapter 9,” the grand jury report says, quoting from a presentation at an October 2009, San Diego County Taxpayers Association seminar.

Open Discussion

San Diego has been wrestling with pension and benefits costs for years. In 2006, the city settled fraud allegations by the Securities and Exchange Commission for failing to disclose to investors that its pension system was underfunded.

I get a check on the first, third and fourth Wednesday each month. Keep um commin!

There is a lesson here.  Never forget that the promises made by politicians are not free and ever expanding entitlements will be paid for one way or the other (and there are many “others” to consider). This is not unique to state and local governments, the best example is the federal government.  We all slop at the trough of entitlements, we better hope there are sufficient farmers left to keep it filled.

Insurance reforms and adult child coverage to age 26 DO NOT extend to retiree only health benefit plans

21 Jun

If you are thinking of retiring early and have an adult child covered under your health benefits who you plan to cover to age 26, think twice about retiring.

 Regulations issued by the Department of HHS make it clear that the insurance reforms that are part of PPACA, including the requirement to allow enrollment of adult children to age 26, DO NOT apply to retiree only plans.  These plans do not have any active employees enrolled, but only retired employees of a company and are typical of large employers.  The adult child requirement also does not apply to Medicare.

While relatively few people are affected, individuals with adult children planning on retiring early will have to look to COBRA and pay the full cost.

This conclusion by HHS is somewhat strange given the Administration’s push to expand coverage and the pressure it has placed on insurers and employers to accelerate the effective date for adult children coverage.  There are many aspects of PPACA left to regulations and interpretation by the Secretary of HHS.

Unnece$$ary health care, who ever heard of $uch a thing?

20 Jun

Who wants a medical test unless it is absolutely necessary, would any doctor order a test just to placate a patient (or make money), would a patient ask for a specific prescription drug because they saw it advertised on television?  Of course not you say, well the truth is that up to 30% of all health care is unnecessary and all of the above things do happen. 

But doc, I swallowed that button when I was six.

Now the question is why.  Fear of being sued comes to mind, but it is more than that.  Americans have become conditioned to think more is always better and coupled with near total insulation from the cost, hey why not another MRI…just to be sure.  There is the array of technology at our disposal, somebody paid for it and it has to be used, the more we have the more we use.  But it is even more than that.  When you have an MRI or a scan or some other test, the chances are they will find something. Often that something is not significant and without the test you would live with it without further incident not even knowing it exists, but now that you do know it is there, well now you may end up in the system and more care is prescribed. 

We know we have a problem with over utilization and now we are adding thirty million more people to the covered insurance roles with the increased demand that goes along with it, and you think we are going to control health care costs.

Here is an interesting article from the New York Times   Law May Do Little to Help Curb Unnecessary Care

What are the consequences, no comment

18 Jun

Problem solved. Read the following and see if you can find the unintended consequences of the Senate’s version of the “doc fix.”

“Senate Majority Leader [Harry] Reid and Senate Finance Chairman Max Baucus expressed relief that part of the legislative package moved forward before the weekend,” CongressDaily reports. Baucus said, “Now doctors will be paid, and more importantly, seniors will get the benefits they deserve.” Also, “[t]he $6.5 billion ‘doc fix’ price tag is fully offset with two revenue-raising provisions. One would ban hospitals from charging Medicare for outpatient and inpatient services rendered within 72 hours of a hospital admission, estimated to save $4.2 billion. The other would raise $2.8 billion by allowing companies to spread out their pension fund obligations over a longer period” (McCarthy, 6/18).

As a “senior” I am amazed I deserve so much. When I was raising four children, going to school at night for nine years and then paying for 18 years of college I apparently didn’t deserve much. How about you?

Who says health care is unaffordable – nip and tuck anyone?

18 Jun

They are in, they are out, did they go to the lips?

While we know Americans cannot afford health care and we certainly know that the problem is with insurance premiums, perhaps the real problem is priorities.  Human nature being what it is, we all like to spend money on things that make us happy and that extends to health care.  Well, certain health care in any case.  

There were almost 10 million surgical and nonsurgical cosmetic procedures performed in the United States in 2009, as reported by the American Society for Aesthetic Plastic Surgery (ASAPS) for which Americans spent almost $10.5 billion.  And if you think these surgeries and procedures are confined to the rich and famous, you are wrong. On the other hand, the number of procedures did decline slightly in 2009, do we need a stimulas plan?  We have had them before so why not another boob tax credit?

Don’t spend if your worried, worry if you dont spend

17 Jun
I am reading in the paper that U.S companies are holding $1.84 trillion in cash and liquid assets. They are hesitant to hire new workers or expand. They are concerned about the economy, government actions, Europe and who knows what else. Come to think of it companies are not unlike the rest of us. We have curtailed (for now) our free spending ways and increased our savings. The irony may be that both the actions of individuals and companies are hampering the recovery that we seek.

Uncertainty is the name of the game. Sadly, the folks in Washington are not helping to ease concerns, but instead heighten the possibility of more poorly conceived laws and regulation, higher deficits and higher taxes.

We don’t spend because we are worried about the future and we have more to worry about because we don’t spend.  Too bad we can’t all get on the same page.

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