Ohio Insurance News Update

No surprise here, really, but current DOI Director Mary Jo Hudson is bailing effective next Monday (the 10th). In Ohio, the DDOI is an appointed position (Hi, John! Sure, I'd love that slot!); MJ, a Miami University grad (just like me!) was named to her current position by then-Governor Ted Strickland.

No word yet on who will take her place, but knowledgeable sources tell me that keeping the MU-grad tradition going is considered paramount (did I mention that I'm an alum?), as is well-rounded experience in the field (such as, but not limited to, continuing education provider, veteran agent, outstanding blogger).

We'll keep you posted.

STOLI Ooops!

A few weeks ago, we wrote about the newest "twist" in Stranger Owned Life Insurance (STOLI). One of the conclusions we drew was that the only real "losers" in these schemes were "the poor saps who bought into this idea, and forked over $50,000 (minimum!) to do so."

We stand corrected:

"New investor lawsuits are emerging amid the wreckage of an investment boom in life-insurance policies that spectacularly collapsed ... Since the bust in the market, insurers have portrayed themselves as the victims."

[ed: the rest of the story is behind a $link]

And, having played the victim card, they're raising the stakes: over the past couple of years, insurers have filed hundreds of suits and agitated state regulators to clamp down on these after-market sales. Their rationale is that the actuarial assumptions on which these plans were based are somehow negated by the change in ownership of the plans.

I call BS: the nature of the risk hasn't changed one iota; John Doe is still John Doe, and his health and mortality risk is what it is regardless of who owns the policy. The idea that he'll meet an untimely demise at the hands of an unhappy investor is silly; the law's very clear that one can't profit from one's crimes in that way.

And of course, it's not just the insurers playing that card, "suits also have been filed by relatives of some of the deceased elderly, alleging that death benefits belong to the family members."

No, they do not. The death benefit belongs to the named beneficiary, which may well have been a family member (or members), but the owner of the policy makes that call, not his kids. Yes, an "irrevocable beneficiary" would have those rights, but then if there was such, the transaction couldn't have been completed in the first place.

And then there's this egregious misstatement: "State insurable-interest laws require an insurance buyer to have a bigger stake in the insured person's continued well-being than in his death."

No, they don't: "insurable interest" is only relevant at the time of application. Once the policy is issued, it is no longer relevant, or applicable. It's Insurance 101 stuff, and the media can't even get that right.

Now, as to the propriety and/or appropriateness of these schemes, I'll leave that to our readers' sensitivities. But the bottom line is that there's nothing inherently illegal, immoral or fattening about them.

[Hat Tip: FoIB Holly R]

MVNHS©: "Hello, Tech Support?"

Behold the new face of the Much Vaunted National Health System©:

"The NHS should move more call centres and offices to India if it wants to beat the spending cuts, a key government health adviser has claimed."

Leaving aside all the inevitable tech support jokes, the move would have the benefit of potentially lowering the cost of health care delivery under the financially-strapped MVNHS©. According to that "key advisor," the problem isn't the quality of the sub-continent's workers, but a reluctance among the Brits to discuss personal health issues, and make doctor appointments, with "foreign operators." The upside, though, is a projected savings of over $30 billion.

Such moves are nothing new on this side of The Pond: as Bob noted over 4 years ago, "In an effort to hold down costs, hospitals and other medical practices are outsourcing certain functions half way around the globe." Aside from privacy and HIPAA concerns, there's the potential for security breaches. But these are, perhaps, offset by cost savings and efficiencies of scale. Of course, a key difference here is that, should such a security problem arise, our legal system is available for remedies. The Brits', though, are stuck with a government-run system which is much more difficult to prosecute.

Have a nice day!

Are ya ready for some Grand Rounds?!

Glenn Laffel has the play-by-play of great year-end medblog posts. Grab a dog and a brew, and root for your favorite teams, er, bloggers.

It's On (ObamaCare© Repeal)! [UPDATED]

I'll leave it to the polibloggers to dissect the partisan aspects of this (not to mention its viability), but a few thoughts strike me. That it will pass the House, I have little doubt. Once it hits the Upper Body, however, it faces (at least) two significant parliamentary hurdles:

1) 61 votes to invoke cloture

2) 50+1 votes to pass

If the first is accomplished, what doubt is there of the second?

But as to that second, the calculus is, um, interesting:

There are now 47 Republicans in the Senate. If one assumes (and this is, perhaps, a leap of faith) that they vote en bloc, they're still 4 shy of the required 51 votes to pass. So the question becomes: are there perhaps 4 Democrat Senators, facing re-election either 2 or 4 years hence, who can be persuaded to vote for repeal?

ADDED: Saw this at one of the aforementioned polibloggers:

"Eliminate the exemptions. That will make them squeal."

Yup.

COURTESY OF MICHELLE MALKIN: The "ObamaCare© Waiver For The Rest Of Us" bill:



HR__-Repeal -

What the heck is VBID?

Caution: extreme wonkery ahead. Which is not to say that that there's extreme clarity ahead: after all, on what planet does this phrase make sense:

"Value-based insurance design (VBID) has emerged as an important tool for tamping down health care spending by lowering consumer cost-sharing."

Get that? Spend more, cost less.

But that's the kind of mental gymnastics in which the folks behind ObamaCare© must engage. It's basic economics: make something more available and cheaper, and demand will rise. When demand rises, one of two things will occur:

One, prices will continue to decline (e.g. e-Books, flat-screen TV's), or

Two, prices will increase (e.g. insurance, health care)

Which path a given product will follow is a function, as Bob's pointed out, of its "elasticity:"

"Sugar has price elasticity. As the price of sugar rises, demand decreases since there are substitutes for sugar ... Gasoline is inelastic ... At this time, there really is no substitute for gasoline."

Same for health care: there is no "substitute" for it, like Equal or Truvia (or honey, for that matter). When you remove an insured's "skin in the game," their own share in the cost, then there's no reason for the consumer to refrain from accessing the benefit. The problem is that there is a finite, and steadily shrinking, supply of providers who can, well, provide these services. Short of capping physicians' wages (and who believes that this is beyond the pale when it comes to HHS Secretary Shecantbeserious?), how does increasing the demand for health care translate to lowering its cost?

And so I would propose a somewhat more accurate translation for the aforementioned acronym: Very Bad Idea, Dimwits.

Ringing in the New Year

Upon opening my email this morning, I was greeted with the following. A young lady had visited my site a few days ago and ran rates on health insurance. We were unable to connect by phone but she wanted to make sure I was aware of her interest, therefore her email.

I'm 30 need health INS but I have asthma and a hyper thyroid, so no INS will cover me fully, I would need everything to be mostly covered

Asthma comes in various forms and can be very expensive to treat. As such, carriers that are still able to issue exclusionary riders for the condition usually will do so to keep the premium affordable.

Those who do not offer riders will calculate the maximum rate up and determine if the new premium is sufficient to cover the risk. If so, they will make an offer. If not, they will decline the application.

Sometimes people tell me they have hyperthyroid when in fact it is hypothyroid, a distinctly different condition. Normally I would ask which they have, but under the new Obamacrap reduced compensation levels, I no longer have the luxury of taking the time for an extensive dialogue.

Plus, I assume this is her illness, so she should know which she has.

Hyperthyroid can lead to a host of symptoms and related conditions including muscular weakness, considerable weight loss and rapid heart beat.

Because of the complexity of hyperthyroid, the range of treatment protocol and potential side effects of a "run away thryroid", most carriers will decline the application and I told her what she would encounter.

Her response follows:

Which is why I will die young from heart disease like my mom did at 49 yes old. cause this country doesn't care! thanks anyway'

This type of response is somewhat typical and I usually just ignore it and block their email. No sense in ruining my day, or year.

Instead, I simply sent her a link to the Obamacrap risk pool . . . and then blocked her email address.