NAIC Hits Bottom, Keeps Digging

Another one that slid in under the radar. Seems that disgraced former US Senator Ben "CornHustler" Nelson has been tapped to head up the (also disgraced)  National Association of Insurance Commissioners:

"Nelson will lead the NAIC’s efforts to meet the needs of its members and represent their interests as the primary advocate and chief spokesperson in Washington, D.C. ... His rare and valuable combination of experience in insurance and government will be a tremendous asset to our organization"

Doesn't say a lot about the integrity of the NAIC, does it?

Unclear on the Concept: Part 47

Let me begin this mini-rant with the proviso that Allison Bell, who wrote the article on which it is based, did a great job of reporting, and I am not slamming her at all. Rather, my ire is directed entirely at Ms Shecantbeserious and her (equally) ignorant minions.

As we noted this morning, Ms Shecantbeserious has dumped another 700-plus pages of "clarifications" for our amusement and/or amazement. We touched on a few, but there are, in fact, quite a few more little "gems" hidden here. Let's look at a few of them:

1) "the nuts and bolts of how new health insurance risk management programs will work"

When your plan design requires Guaranteed Issue and Community Rating, you have forfeited the right to use the term "risk management." The correct term is "income redistribution."

2) "how insurers will go about paying for the programs"

That's easy: they won't. Insurers have never paid for any claims - that's what premium payers are for (note: this is different than how, for example, Lloyds works).

3) "how the new "advanced premium tax credit" (APTC) program will work"

Let's answer that with another question: from where, exactly, is the money to pay for these expected credits going to come? Here's a hint: see #1 above

4) "[The ObamaTax] requires [HHS Secretary Shecantbeserious] and states to set up exchanges, or Web-based health insurance supermarkets, for individuals and small groups by Oct. 1."

Oh, we know all about that deadline. Notice, though, that we haven't seen any recent news on its actual implementation. Wonder why that is.

But here's my fave:

5) "The Internal Revenue would use the APTC program to give people ... help with paying for health coverage bought through an exchange ...  Jane Doe, a taxpayer, expected to report 2014 income equal to 300 percent of the federal poverty level in March 2015, the IRS would use Jane Doe's income projection to make APTC tax credits available to Jane Doe in 2014, to help her pay for health coverage in 2014."

One word, folks, one word.

Another Day, Another 700+ Pages

Could someone please tell me that a 2600+ page bill (which no one read before they passed it) plus untold hundreds (perhaps thousands) of additional pages of regulations implementing it, could possibly make our health care delivery and finance systems more efficient?

"The four rules, which are scheduled for publication in mid-March, finalize both major and minor parts of the [ObamaTax]"

A ream-and-a-half of paper for FOUR new rules?

Whatever happened to the KISS (Keep it simple) Principle?

[Hat Tip: FoIB Holly R]

Horsin' Around with Insurance

Do YOU have "Wrong Equine Coverage?"



[Hat Tip: SoIB Joyce F]

Friday Afternoon ObamaTax tidbit(s)

Had an interesting meeting with our Anthem rep this morning, and two items she shared with me stand out:

First, I've been wondering for a while about how insurance sales will work outside the Exchanges. That is, since only Exchange-compliant plans will be acceptable coverage under The ObamaTax, why would carriers bother to have two different product lines? I had guessed that they wouldn't, but our rep told me that the plans available on the Exchanges would, in fact, differ from those sold outside of them.

Exchange-based plans will be eligible for subsidies (which does not mean that purchasers will actually receive them), and have much tighter (smaller) networks. Plans sold outside the Exchanges won't be eligible for any subsidies, but will have bigger networks, and thus more offer more choice in actual health care.

The second thing she told me had to do with so-called "grandfathered" plans. I was surprised to learn that up to 50% of Anthem's individual plans are still grandfathered in. She also told me that they're expecting a major influx of fourth quarter new business.

Hunh?

It makes sense: non-grandfathered plans will stay in effect until their first renewal after January 1st. So if your plan has (for example) a February effective date, then you're most likely going to be buying a new Exchange-compliant plan early next year. But if you buy a new plan with (say) an October effective date, you've got most of 2014 before you have to switch.

Oh, and Anthem also has a consumer-friendly ObamaTax guidance tool, just click here.

Live and learn.

[Hat Tip: FoIB Beverly D]

Medicare Waste - Overpaying for Medication

A recent Inspector General's report finds that Medicare waste for infusion therapy drugs costs the taxpayer an estimated $334 million over the last six years. But yet, Washington doesn't have a spending problem . . .

Congress locked some drug costs at 2003 prices, Medicare has wasted $334 million dollars over the last six years by failing to buy medication at the best possible discount, according to a new investigation that reinforces just how prevalent waste and abuse are inside the government's main health program for senior citizens.

Investigators at the Health and Human Services Department Office of Inspector General said that Medicare waste on Plan B by purchasing drugs at an outdated average wholesale price, or AWP, as opposed to the manufacturing price the government is supposed to receive.

“Our findings—like those of OIG’s previous studies in this area—demonstrate that AWPs are unrelated to the prices of drugs in the marketplace and that the reliance on an AWP-based payment methodology has led to Medicare waste that cost the program hundreds of millions of dollars,” the inspector general said.

Washington Guardian

CMS claims they save money on some drugs that have risen in cost since 2003, but in the area of infusion therapy, many now have lower costs.

For the six years covered by the latest review, investigators estimated the government had been paying between 54 percent and 122 percent more for the drugs than was necessary.  By using the wholesale price, investigators said CMS failed to get “any price concessions, such as volume discounts, ‘prompt pay’ discounts, cash discounts, free goods contingent on purchase requirements, chargebacks and rebates other than those obtained through the Medicaid drug rebate program.”

The IG also said that because medicine was being purchased at 2003 prices, the government might have been getting some drugs cheaper than current costs.  But investigators said it was a small amount, and is already calculated in the $334 million estimation.

And you thought the federal government only had a problem with $500 toilet seats.

And investigators were able to identify the largest single Medicare waste problem: a drug called milrinone lactate, which is used to treat heart failure.  Medicare Plan B was paying a price for the drugs more than 18 times greater than the actual cost, the inspector general said.

Of the $125 million Medicare spent in 2011 for 21 different infusion drugs, that particular drug accounted for 62 percent of the costs, according to the IG’s report.

So why is the Obama administration making a big deal over a 2% cut due to sequestration?

Rather than pink slipping federal employees, claiming teachers (who are NOT federal employees) will be laid off and releasing illegal immigrants (and trusting they will return when sequestration is over), seems they should be exercising oversight on Medicare waste.

What spending problem?

Is Alfred E. Newman running Washington?

Cavalcade of Risk #178: Call for submissions

David Williams hosts next week's Cav. Entries are due by Monday (the 4th).

To submit your risk-related post, just click here to email it.

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). And please only submit if you are willing to link back to the carnival if your submission is accepted.