PCIP by the Numbers

The well intentioned but poorly designed PCIP program is in poor health. Pre-existing Condition Insurance Plan (PCIP) is a bridge plan for those who cannot obtain health insurance in traditional markets (including risk pools or HIPAA conversion).

The precept is simple. If you have a medical condition that precludes you from obtaining medically underwritten health insurance and have been uninsured (for any reason) for at least 6 months, welcome to PCIP.

PCIP is guaranteed issue, regardless of your health. Not only will you be issued a policy but it will cover all your pre-existing medical conditions and their treatment.

A virtual health insurance panacea.

But the same folks that gave us Cash for Clunkers and sold 700,000 cars in 6 weeks can just barely get 20,000 folks into a health insurance plan designed just for them and this is after a year of sales pitches.

Even the recent 40% drop in premiums designed to lure in new participants appears to be sluggish.

But how well is PCIP working from a financial perspective?

I decided to ask that same of the folks at Google by entering a query for "PCIP loss reports". The first one that came up as a PDF from the state of Washington.

Here are some excerpts:

Total member months through April were 1085

"the receivable for unbilled HHS reimbursements is $4.2 M. This
amount represents an offset of liabilities, including IBNR, which will be invoiced and funded by HHS before the end of the program"


"As of April 2011 YTD, total operating expenses are $340 K and HHS Reimbursement is $6.6 M."

"For April 2011 YTD, administrative expenses are $95 K or 17.2% favorable to budget (cash basis)."

"As of May 2011, membership is at 50.1% of projected year-end enrollment. Actual YTD claims PMPM is $3,574 as compared to $5,180 budgeted claims PMPM. As illustrated in the program summary, the current 2011 allotment of funds is projected
to deplete in August of 2011."

"As of April 2011, projections indicated that PCIP-WA will use up 75% of the original federally allotted funds by August 2012."

(If you go further in to the report you find that premiums are not supporting the program. Without the heavy subsidy by HHS the program would have failed long ago.)

2011 YTD premiums are $803,278 vs YTD claims of $3,408,946 medical plus $558,981 Rx.

HHS (taxpayer) reimbursements of $3,379,891 are needed to keep the program afloat for 263 participants.

For Sept 2010 through Dec 2010 they received $251,511 in premiums vs $1,005,816 in claims.

The program is not even a year old and already running a deficit if not for the taxpayer subsidy and these numbers are on fewer than 300 people who are getting a bargain.

ObamaCare©: Another Victim's Tale

As previously noted (here and here), very few weeks go by without at least one of us having to help a client deal with the consequences of ObamaCare©. This time, it's an old friend of mine whose family is quickly exhausting their COBRA coverage, and who need to find a place to land once it's gone later this summer.

Fred and Ethel are in their early 50's, and both have health issues serious enough to earn them declines in the open market. Their 13 year old daughter, in perfectly good health, is ineligible for her own plan because neither Mom nor Dad are insurable.

Or is she?

Bob recently pointed out two potential plans that might work: the first is a Short Term Medical, the other is a quasi-limited benefit plan. Both are from the same carrier, which has apparently decided that it will continue to offer child-only plans in these configurations.

So what's my beef?

First, the Short Term Medical plan is, well, only good for a short term (6 months at a time, to a maximum of two years in Ohio). And, it excludes coverage for pre-existing conditions (including those that develop during a previous STM's term). On the other hand, it's inexpensive and it does provide some coverage.

The other plan, which we'll call HA, may cover pre-existing conditions (depending on whether they were disclosed and underwritten), and doesn't have a built-in time limit. It's basically a limited benefit plan with some additional bells and whistles. It, too, is relatively inexpensive.

Fred and Ethel, though, are basically SOL: once COBRA runs out, their only real option is a (so-called) HIPAA Plan. This is expensive, mediocre coverage, but it does cover pre-existing conditions. Another option might have been the richer benefits and lower premiums of the ObamaPool©, but they're ineligible for that because they actually played by the rules and made the responsible decision to remain insured.

Oh, Brave New System.

Grand Rounds: "It's Up To Us" edition (Here at IB!)

Next Tuesday, InsureBlog hosts Grand Rounds, the prestigious compendium of the best the medblogosphere has to offer.

Also: a great way to learn about blogs you've never heard of (but should get to know).

Our theme will be "Personal Responsibility" - only posts that address this issue will be included (BUT: feel free to reach back into your archives - any relevant 2011 post will do). Submissions MUST be received no later than Sunday (7/10/11) to be considered.

Potential contributors can submit their entries to insureblog (at) mail (dot) com, and please include the following:

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

Thanks!

Cavalcade of Risk #135: Call for submissions

NotWithStanding blog hosts next week's CavRisk. Entries are due by Monday (the 11th).

NB: We're now using this submission tool: The BC WorkAround

Once there, you'll be asked to provide:

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

At the bottom of the form, you'll see a drop-down menu; simply select "Cavalcade of Risk" then press "Submit" and you're good to go.

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

Risk Management and Cell Phones

I have a long-running dispute discussion with a colleague regarding the argument that driving while talking on the cell is the same as drunk driving.

[ed: We have no disagreement vis: texting and driving - we both agree that this warrants the immediate application of the death penalty]

My take is that talking on the phone using a hands-free device is no more risky than listening (and talking back) to the radio, or to one's spouse in the passenger seat. Bill thinks that pretty much any use of the cell while driving is inherently more dangerous than either of those two activities.

So, who's right?

Well, score one for the good guys me:

"A comprehensive study on distracted driving has found there is no conclusive evidence that hands-free cell phone use while driving is any less risky than hand-held cell phone use ... there is no evidence that cell phone or texting bans have reduced crashes."

Is this dispositive? No, not really: the study itself contained enough contradictory findings that the case is still open. But it does recommend that states without such bans hold off a while before enacting them, which also tells you something.

CORRECTION: Bill M begs to disagree: He thinks that the study actually proves his point that there's really no difference between hand-held and hands-free in terms of risk, and that the study actually supports his position.

What say you, dear readers?

Food Pyramid Update: Pass the Salt!

(Yeah, we're old school like that)

Just two months ago, we noted a study of 4,000 Continentals and their intake of salt. The surprising results?

"People who ate lots of salt were not more likely to get high blood pressure, and were less likely to die of heart disease than those with a low salt intake ... The findings "certainly do not support the current recommendation to lower salt intake in the general population."

Now, one might be tempted to discount those results as a "one-off," but one would be wrong to do so. Researchers at Exeter University took a peek at "seven published studies involving 6,489 people. Some had high blood pressure, others had normal blood pressure and they had all been put on salt-reduction diets." Their results mirrored those of the one we cited in May:

"[T]he authors found that there was no evidence that cutting down reduced deaths or heart disease in either group."

In fact (and as noted in that previous study), folks who did cut back on their salt intake were actually more likely to die prematurely than those who didn't alter their diet.

Bon appetit!

Is this drug worth it? Is it rationing if the answer is "no"?

On July 1, the Wall Street Journal reported that Medicare had decided to cover Provenge, a new drug for treatment of advanced prostate cancer.

According to the article, men with advanced prostate cancer and treated with Provenge in clinical research lived a median of about 26 months, or about four months longer than patients who received a placebo.

Translated into English, this says half the Provenge patients lived at least 4 months longer than patients treated with sugar water. The other half lived fewer than 4 months longer.

The punch line is the cost--about $93,000 per course of treatment. (Not a typo.)

I have a question. Why shouldn't Medicare allow patients a choice between Provenge - and a cash payment of $50,000?

Why ask? Well, for starters because this drug delivers minimal benefit, patients might not want it especially if another option were available; the cash option might be a much more welcome way for the federales to help families cope with the loss of a loved one; having no choice means taxpayers will shoulder much higher costs; there's no telling WHAT Medicare was really thinking anyway; and the only party that clearly benefits seems to be Dendreon, the drug manufacturer.

So - is this drug worth it? Is it rationing if the answer is "no" ?