The D'unh and the Elephant

FoIB Holly R sends us two seemingly unrelated links which, upon closer inspection, are actually inextricably intertwined.

The D'unh:

"The Congressional Budget Office (CBO) released its Budget and Economic Outlook for years 2012 to 2022 yesterday ... as a result of increasing federal spending on health care, which will more than double between 2012 and 2022."

And the Elephant:

"Federal Reserve Chairman Ben Bernanke warned Thursday that rising health care costs must be curbed ... The elephant in the room is really health care costs."

Now let's try a little exercise: what major piece of recent legislation could possibly have been passed that would cause health care spending to increase so dramatically?

See, it's not so difficult.

Cavalcade of Risk #150: Call for submissions

My Wealth Builder hosts next week's CavRisk. Entries are due by Monday (the 23rd).

Just click here to submit your post.

You'll need to provide:

* Your post's url and title
* Your blog's url and name
* Your name and email
* A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

January Surprise - Medicare Edition

Industry pundits predicted a dismal year for Medicare Advantage plans but SURPRISE . . . premiums are down and enrollment up.

Forget that many PFFS model Advantage plans pulled out of some counties due to strict CMS requirements. According to Bloomberg, net enrollment in Advantage plans increased.

The enrollment rise to 12.8 million exceeded Medicare projections in May that membership would peak at 12.5 million in 2012 before falling to about 9.2 million by 2018 as cuts kick in on federal subsidies to insurers. The average premiums dropped to $31.54 per month, the U.S. Department of Health and Human Services said in a statement.

Enrollment up in 2011 followed by a slight projected drop for 2012. Final 2012 enrollment won't be known for a few more months.

My own observation is many seniors living on a fixed income are motivated by the lower premiums (as low as $0) and will buy these plans in spite of the shortfalls.

Medicare Advantage plans have a lot of moving parts, are not portable from state to state or even within a state if you use non-par providers, and have a LOT of out of pocket.

But seniors are willing to gamble on their health remaining relatively good in hopes of saving money on a net basis by purchasing an Advantage plan vs. original Medicare plus a Medigap plan.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group in Washington, wrote in an e-mail that plan members will face “higher out-of-pocket costs, reduced benefits and fewer health-care choices” as the health law’s payment cuts accelerate

.

Some earlier studies predicted the number of seniors enrolled in Advantage plans by 2018 would be half current levels, and that prediction may become true.

As providers become less willing to accept patients with these plans and out of pocket costs rise, seniors who get stung by these plans may be willing to return to Medicare and a supplement plan . . . assuming they can qualify.

And therein lies the rub.

If you have a Medicare Advantage plan and move out of their service area, or the plan withdraws from the market in your area, you have a guaranteed right to return to Medicare and a Medigap plan. But if they voluntarily opt out of an Advantage plan (regardless of the reason) to return to Medicare they will have to go through medical underwriting before they can purchase a Medigap plan.

As if this isn't enough, provisions in Obamneycrap call for reduced funding for Medicare and Medicare Advantage plans as a way of paying for health care needs of the poor.

Paraphrasing the president, "I think at some point you have had enough health care"



How is this working for you?

Planning for Tomorrow

At age 46, small business co-owner Mark C bought disability income insurance to protect himself, his family, and his company. Less than two years later, he'd developed a rare and debilitating condition, and his claim was quickly approved.

Because Mark had bought these plans, his family and his business dodged a major bullet.

Here's his story.

[Hat Tip: FoIB JeffM]

Health Wonk Review, Early Election edition

Our friend Louise Norris presents a thoughtful - and thought-provoking - selection of posts on the politics of health care. What's so great about it is that she doesn't just post the links, but adds her own analysis of each one.

Kudos!

Death Masters

Although this may sound like the latest PS3 game, it's actually the Social Security Administration's list of post-life-Americans. In a nutshell, the SSA is tasked with identifying those who have died and (in some cases) pass along that information:

"Social Security does not make its Death Master File (DMF) available online ... Under the Freedom of Information Act, we are required to disclose the Public DMF to members of the public ... The Public DMF does not contain information where SSA's only source of that data was a State record of death. Further, the Public DMF is not a complete listing of every death in the United States."

So what's the problem?

It's that there's an inherent conflict between the "official" records kept by DC and those compiled by other actors (eg the states). What's at issue is that a) there's some question as to the accuracy of "The List" and b) how it's being used. And, of course, there's the whole problem of identity theft.

What's happened is that the states, squeezed ever harder for funds, have set up their own little speed traps for insurers. To wit: forcing insurers to either track down long-lost beneficiaries or turn over death claim proceeds to the state.

One little problem: as the SSA has itself acknowledged, the DMF is itself rife with potential errors and misinformation, including:

"incorrect reporting of death “have created severe personal and financial hardship for those who are erroneously listed as deceased, including the termination of benefits and the public disclosure of information that the SSA normally keeps confidential.”

So you can see where there might be, um, issues .

As usual, it's all a game of "show me the money," using the power of the state (both metaphorical and literal). In the event, the new hearings can be expected to shed as much light on the problem as usual.

Insurance meets the 20th Century (Finally!)

One of the most frustrating things when dealing with carriers is the dearth of tech solutions to pretty basic problems. While many health insurance (and some life insurance) carriers have adopted on-line application processes (I can't speak for the P&C side), many still require "paper apps" and inked signatures to go with them.

That may be changing, however, and the folks at the Renaissance Group (a self-described "elite coalition of independent agencies, insurers, and service with over 80 member agencies") have developed are using a new tool to help decrease their paper consumption, while increasing efficiency in sending and receiving sensitive documents electronically.

Here Bob Schackner, the company's Director of Competitive Edge Services, explains their new RPost widget for email encryption and e-signatures:



UPDATE: Just to clarify, RPost created the widget, The Renaissance Group is a (satisfied) customer.

[Hat Tip: Oly Rillera]