Regular readers may recall this story from 4 years ago:
"A pair of Los Angeles women may have insured the lives of homeless men, then arranged fatal hit-and-run “accidents” so that they could collect the death benefits, officials say."
As I said at the time, this was "sick."
But someone else (actually, four someone else's) have gone one, um, better:
"Federal Bureau of Investigation headquarters today highlighted a recent conviction in a scheme by four individuals in the Los Angeles area to invent a man out of whole cloth, hold his funeral, and then reap in the insurance benefits from his death."
This guy wasn't just homeless - he was bodiless, as well. The article lacks more than a few details, but we can infer that at least two carriers were involved, since the total amount at risk would have required at least some additional underwriting beyond an application. Makes one wonder, though, how many of these schemes are successfully pulled off.
[Hat Tip: Best of the Web]
National Review health blogger (and FoIB) Avik Roy has written an insightful and helpful post on the role of Consumer Driven Health Plans (CDHPs). He examines the pro's and cons (including a link back to our own exclusive expose on network re-pricing problems).
His conclusion - that Consumer Driven plans will shine under ObamaCare© - may be a bit controversial, but it's certainly well-reasoned and supportable. Recommended.
Full disclosure: several years ago, I had the privilege of being interviewed by the NY Times' Reed Abelson, a very nice lady. She apparently has (or shares) the "health beat" for the "Paper of Record," and seems at least interested in what the blogosphere has to offer.
That said, I really wish reporters like Ms Abelson would spend at least an hour or so boning up on simple economics:
"Instead of sharing the pain, as they have generally done in the past, employers chose to keep their costs steady by passing the higher costs onto workers."
Here's that clue, Reed & Co:
Employers don't pay any premiums. They don't share in them, they don't "pass them along."
Once more: Employers. Don't. Pay. Premiums.
They collect them and send them along to the insurer(s).
Of course, reporters aren't the only folks guilty of this ignorance: President Obama (and others) are currently touting a "tax break" for businesses, which is based on another false assumption; as with premiums, businesses don't pay taxes, they (you guessed it!) collect them.
By way of analogy:
A few years ago, I was treated to lunch at a fairly nice restaurant. As I was chewing my salad, I felt something cold, hard and metallic clatter against my teeth. Spitting it out, I saw that - along with the croutons - I had been served a nut (as in "nuts-and-bolts" nut). When I pointed out this faux pas to our server, she offered to take the cost of the meal off the check. Which was nice but, seeing as how it wasn't my check (but they were my teeth!), I failed to see how this helped me.
Just like me and my "free" lunch, businesses don't pay the tax tab, so offering them a "freebie" is of dubious value. What would be beneficial would be a "regulations" break; a respite, as it were, from the onerous new rules encompassed in Obamacare©. Now that would be a break worth chewing on.
Host David Williams applies a "pretty tough filter" to this week's roundup of risk-based posts. The result is a terrific, on-target collection without a lot of fluff. Stop on by!
One of the consistent themes at InsureBlog has been the inadequate participation of physicians in setting health policy, for lo! these past 40+ years. See here and here and here and here. I ask you – what do you truly prefer? Medical policy guidance from physicians ? Or from Nancy Pelosi, Harry Reid, and Max Baucus? Insufficient physician participation over the years created a policy leadership vacuum. Nature abhors a vacuum. And just look what rushed in – Pelosi, Reid, Baucus, et al. Yes, most physicians are kinda busy with other important stuff.But here is just one illustration of what I mean by inadequate participation: ModernHealthcare's 2010 list of the “100 Most Powerful People in Healthcare”. The top 50 in 2010 include 8 physicians – 16%. There is exactly 1 physician in the top 10. There are 5 politicians in the top 10, including the top 4 in the entire survey – the aforementioned Pelosi, Reid, Baucus, plus of course, the President.So it is no surprise that PPACA - "health care reform" signed by the President - is a political instrument rather than medical reform; is power-driven rather than public health driven; will spend a trillion dollars, not save a trillion dollars; and creates bureaucracy but does not create ways to help physicians and hospitals reduce their cost. As Pelosi predicted, we are finding out what is in this law. And we are rightly appalled.IMO, too few doctors have been constructively engaged in the health policy debate. As a result, the nation relied on the wrong “doctors” - - who made the wrong diagnoses and wrote the wrong prescriptions. In these circumstances, the patient's prognosis ain't all that rosy.
Comedienne Kathleen Madigan has a cute line about a farmer whose home along the banks of the Mississippi has been flooded (again): "And he's just as surprised this year as he was last year!"
Which also summarizes the folks who run the National Flood Insurance Program:
"In Wilkinson County, Miss., a home has been flooded 34 times since 1978 ... an insurer has paid claims every time, required no flood proofing, never raised premiums after a claim and vowed to continue insuring the house. Forever."
The home's valued at just under $70,000, but all those claims total over $660,000. It's been paid-for ten-times over.
By what brain-damaged insurance company, you ask?
The clueless folks at the McPaper want you to think it was "[t]he federal government."
But you and I know better: the government has no money. The correct answer is: thee and me.
The rocket surgeons at FEMA "manage" the National Flood Insurance Program (NFIP). This isn't our first brush with this brain-trust, either. As Bob wrote about NFIP almost 2 years ago:
"If you crash your car repeatedly, you can count on your insurance premium shooting up. Crash often enough and your insurer will drop you. But there's a special kind of insurance that doesn't punish you for having the same accident over and over again. And here's the punch line: It's a government program that's already left tax-payers like you on the hook for $17 billion—and counting."
The problem is that, although the goal is to be self-sustaining, the agency continues to run "deeply in the red." How deeply? How about almost $20 billion in crimson? But FEMA/NFIP isn't alone. As we also mentioned almost 3 years ago, Florida's "high risk" carrier, Citizens Property Insurance (a wholly owned subsidiary of the unfortunately non-profit Citizens of the State of Florida), has much the same structure, and (not surprisingly) similar results:
"[O]ver $400 billion (yes, billion with a "b") in liabilities ... [and] something like $3 billion in premiums."
Ooops.
These dollars are dwarfed, of course, by Hurricane ObamaCare©, which is slated to cost in the trillions, but serve as stark and sobering examples of government-run "insurance" programs which eschew risk for votes. We know that there are going to be at least a handful of hurricanes each season, and can infer, with some degree of accuracy, how many will strike land, causing "x" amount of damage. Same with floods. An exact science? No. A pretty good track record of estimates? Yep.
But how do you assess the risk for literally hundreds of millions of Americans - some smokers, some not; some fat, some fit; some healthy, some diabetic - and further, how do you price that risk with any degree of accuracy when you won't even acknowledge that the risk exists?
That is the insurmountable conundrum of ObamaCare©. Well, not "insurmountable," exactly. Feel better?
