Beware the Fine (and not so fine) Print

Sometimes, seemingly insignificant policy provisions can bite you. Case in point:

Recently, two of my individual HSA clients, each insured with a different carrier, came up for renewal. I suggested that we find new policies, and lower premiums. We looked around, and determined that the (relatively new) Aetna HDHP would fit the bill nicely, and so we submitted applications.

Pretty routine so far.

And then, my co-blogger Bob (in an unrelated email and subsequent post) pointed out that these plans have an internal limit of $5,000 a year for out-patient prescription drugs.

�So what?� you may ask, �I�m not on any meds that even come close to that!�

I would reply that we buy insurance for what might happen, not (just) what did happen.

Which is pretty much what I told both of these clients when I called them yesterday for permission to withdraw their applications. Both have family plans, and relatively healthy families to go on those plans. But new cases of MS (for example) are diagnosed every day. Cancer, too. Other chronic (and expensively medicated) illnesses, as well. A person with MS would blow through that $5,000 is a couple of months, and then what?

To my surprise (and delight), neither client was upset with me for suggesting that we go back to square one; in fact, they were both pleased that I�d alerted them to this potential problem.

So what�s my point?

Well, for one thing, would the anonymous voice at the other end of an 800 number (or web-site) be concerned about this? Or call (or email) back to suggest a different solution?

For another, it�s a reminder to me that what we do for our clients is important, and that I do (and should) learn knew things every day.

Mental Help

Richard G. Frank, a health economist with a specialty in mental health issues who is a professor at Harvard, said: "Clearly, the earnings of mental health professionals � medical doctors, psychologists, social workers and counselors � have either been flat or been declining for the past five to eight years."

"It's not so much the number of visits allowed by managed care to mental health professionals has changed," he said. "It's that fees paid to the mental health professionals have not been rising."

Ms. Hinterman, too, observed that patients found prescription medicines a quicker fix than "prolonged and thorough introspection."

"We just live in a culture that values speed and efficiency and wants to see complex problems resolved in half an hour," she said. Given those changes, she no longer wants to rely on the profession she trained for as her sole source of income.

No chit-chat, just gimme a pill. Drive through therapy is the name of the game.

So how is Ms. Hinterman dealing with reduced fee schedules?

An experienced seamstress, in January 2004 she started Fiber Embellishments, a company that makes scarves, table linens, chefs' aprons and one-of-a-kind bags made of boiled wool; local retailers are already selling her goods.

Wonder what Dr. Bob Hartley would do in a situation like this? Probably stand up comedy . . .

No Money, No Problem

Hospital bills for the several hundred thousand Long Islanders who have no health insurance just got cheaper.

Under provisions in the new state budget, legislators agreed Tuesday to cap how much hospitals can charge low-income uninsured patients.

Guess who is going to get screwed on this deal?

"What is most shocking is that if you're poor and don't have health insurance you could be charged two, three, five times as much as someone with Medicaid."

What is STILL overlooked is this. How much is CHARGED is irrelevant. The elephant in the room that everyone ignores is how much is actually COLLECTED from this group.

The provisions also keep hospitals from forcing the sale of a person's home to pay for medical bills and from calling in a collection agency if the person has filed for financial aid.

TD to Stay Focused on US Despite Headwinds

Bloomberg, 30 March 2006Toronto-Dominion Bank, Canada's No. 2 lender, will focus this year on making at least one acquisition in the U.S. and bolstering its investment-banking unit, Chief Executive Officer Edmund Clark said.TD Banknorth, Toronto-Dominion's U.S. lender, will have ``opportunities'' to make purchases, Clark said in an interview today following the annual meeting in Vancouver.``I

Attagirl

With health insurance and a little planning, getting high is as easy as getting a prescription.

And in the case of drugs that treat attention-deficit/hyperactivity disorder - which stems from low levels of brain chemicals dopamine and norepinephrine - New Yorkers are working the system.

Ritalin is a form of legalized �speed�.

"Addagurl" is the gay community's slang for the ADHD drug Adderall. Jared, 29 (who, like all subjects in this story, used a pseudonym), spends his weekends "gurling." The fashion designer got a prescription two years ago after looking up symptoms online and telling his doctor that he had them.

Now that�s something you don�t hear every day.

"ADD is such a subjective diagnosis," he says. "If you say that you have it, how's somebody going to prove that you don't? There's really no quantifiable test, so just actually knowing what to say is all you need."

When Jared, who lives in Manhattan, is planning to stay out late dancing, "three Addagurls and I'm ready to go. If you take, like, more than 30 [milligrams], it starts to feel like a combination between cocaine and Ecstasy.

"You can dose up or down according to what effect you want. You know what the comedown is going to be," he says, casually. "It is a nice benefit that it is pretty cheap and your insurance pays for it. It's safe, it's easy and it's predictable."

Not necessarily so.

Emily, 22, got a prescription for Ritalin during her last year of college. She giggles as she recounts exaggerating her symptoms during 15-minute meetings with a "bottom-of-the-barrel" doctor her school provided. (The drugs can only be prescribed by seeing a doctor in person.)

The doctor become suspicious when she admitted that she wasn't taking Ritalin every day, Emily says. But he didn't press her on it.

Instead, he renewed her prescription, eventually increasing the dosage to 20 milligrams from the original 5.

"I wasn't telling him I was taking it to stay up at night, because I know that's not really the best thing to say," Emily says. "I was just saying, 'I only take it when I really need it because I don't want to be dependent on it.' Every doctor wants to hear that."

Attagirl!

National Bank & CIBC at NBF Financial Services Conference

Canadian Press, Allan Swift, 29 March 2006The CEO of National Bank of Canada says the Montreal-based bank is not overly exposed to Canada's flagging pulp and paper industry, which is concentrated in the province of Quebec.Real Raymond told a banking conference Wednesday that most of the debt for that industry is held by secondary markets in the United States."Our exposure is very much under

Manulife Would Rather Acquire Than Increase Dividend Payouts

Bloomberg, 29 March 2006Manulife Financial Corp. would rather spend excess cash on acquisitions than pay out more of its earnings in dividends, chief financial officer Peter Rubenovitch said. The company has "the flexibility to pursue any kind of options we would consider to be attractive to shareholders," he told investors yesterday at Montreal conference sponsored by National Bank Financial.

RBC to 'Reaccelerate' US Footprint in 2007

Canadian Press, 29 March 2006RBC Financial Group plans to ramp up its presence in the United States - a market that has proved challenging in the past - with 15 to 20 new branches per year starting in 2007, says the head of its American operations.Scott Custer, CEO of RBC Centura Banks Inc., made the remarks Wednesday during a presentation to a Canadian financial services conference in

Pill Nazi

One of the funniest characters in the Seinfeld sitcom was the Soup Nazi. Anyone who has seen the show can visualize his cold stare while uttering the words �No soup for you!�.

Now we have the Pill Nazi.

The patient had high cholesterol and, according to medical guidelines, should have been taking a drug to lower it.

But her doctor didn't write a prescription. The drug was unlikely to help someone who was 100 years old and had advanced cancer. It wasn't worth the cost, side effects and hassle of taking yet another pill.

Seems the economics of medical care is invading geriatrics. What else lies ahead?

Researchers offer several case examples.

One case involves a 75-year-old woman with high blood pressure, high cholesterol, arthritis and diabetes. With a remaining life expectancy of 17 years, it makes sense to keep taking drugs to treat those conditions, researchers wrote.

But in the case of a 72-year-old man with congestive heart failure, emphysema and a six-month life expectancy, the doctor should stop prescribing drugs intended to provide long-term benefits.

Paging Dr. Kervorkian.

Elderly Americans who live independently typically take three or four prescription drugs a day. Nursing home residents typically take seven or eight prescriptions.
Studies have found that patients who take at least five prescriptions have a 90 percent chance of suffering side effects or complications from drug interactions. About one out of five elderly patients takes a drug that has a high risk and low benefit, Holmes said.

I do agree that we, as a general population are entirely too dependent on meds. But where does it stop?

Patients are bombarded with drug ads, and have been told for years about the importance of taking their medicine. So doctors might be reluctant to discontinue their prescriptions.
Nevertheless, 65 percent of all office visits end with the doctor writing a prescription. "It makes us feel good to hand something to a patient," Holmes said.

Is it any wonder why Rx claims represent almost 20% of premiums?

Insure U

Every once in a while I come across a site that is truly informational and unbiased. This is one of them.

The National Association of Insurance Commissioners (NAIC) today launched a comprehensive public education program to assist consumers with information about insurance issues. Under the banner of Insure U, the campaign has two objectives: to help consumers get smart about insurance as their needs change at different life stages, and to educate them about how to avoid being scammed by fake insurance companies. The program includes an online education site and public service announcements in English and Spanish.

The Insure U curriculum includes a basic introduction to the four major types of insurance � auto, home, life and health � as well as special considerations for young singles, young families, established families and empty nesters/seniors. Consumers can test their knowledge about insurance by taking an online quiz. Upon successful completion, they can download an Insure U diploma.

I encourage you to take some time, tour the site then collect your diploma.

Remember the Maine...

You may recall that, back in mid-February, we blew the whistle on Maine�s DirigiChoice plan (the Pine Tree State�s subsidized health-care program). Seems that, notwithstanding all its good intentions, the plan has been a colossal failure, and a further demonstration of the folly of government meddling.

Well, the hits just keep on coming:

�Proponents of a proposal to change Maine's DirigoChoice program to a self-insured health insurance program "had a hard time convincing skeptics" at a legislative hearing on Tuesday that the proposal would make the program more affordable.�

Apparently, the state has an agreement with Anthem (Blue Cross/Shield), under which Anthem administers the plan. Recently, Governor Baldacci expressed an interest in vacating that agreement, in favor of a self-insured plan. The idea would be that the state could save money by taking a more direct role in the plan�s implementation.

Uh-hunh.

Opponents argue that a self-insured program couldn�t guarantee these savings, and that such an arrangement would violate the promise of a public-private partnership.

The word that comes to mind here is: disingenuous.

There�s no program that will guarantee savings, at least in the long run. At best, any new plan could come in and generate some. And how, exactly, would such a scheme violate any partnership? It doesn�t seem likely that Maine would self-administer the plan; presumably DirigiChoice would contract with a professional administrator to handle the actual operations. That�s still public-private.

The only (marginally) valid objection seems to be the possibility of DC participants losing coverage if the plan goes belly up. I suspect, however, that (given the stakes) the state itself � or rather, the taxpayers � would them bail out.

Of course, there�s the possibility that the plan could choose another carrier when the agreement with Anthem runs out. I�m not familiar with the Pine Tree State�s health insurance market, but I bet I know who�s next at bat (hint: do the initials UHC ring a bell?).

Ch-Ching!

UPDATE: More on this subject, specifically Massachusetts' efforts, at Health Business Blog.

Cdn Banks Will Have to Deal with Significant Challenges in 2006

The Globe and Mail, Paul Waldie, 29 March 2006Canada's big banks enjoyed stellar financial results in 2005, but they face several challenges in 2006 that could hurt profits, according to a report released yesterday by PricewaterhouseCoopers.The big six banks chalked up more than $12-billion in combined profit last year, thanks largely to a strong Canadian economy, high commodity prices and low

TennCare, the Sequel??

From the folks who brought you TennCare, we now have the sequel . . . Cover Tennessee.

TennCare was unique in two ways. First, TennCare originally covered people who were not eligible under Medicaid. Traditionally, Medicaid provides health coverage to children, the aged, disabled, and families with very low incomes. The TennCare waiver offered coverage to families who either had no access to group insurance or individuals who had medical conditions that made them "uninsurable." The individuals who were covered through the TennCare waiver paid monthly premiums for their health coverage based on their incomes.

Sounds like a noble idea.

Only one problem . . . it failed miserably and in less than 10 years was on the ropes.

With TennCare, the health and productivity of Tennessee's citizens increased. Tennessee once boasted the lowest number of children without health coverage, and at the same time the lowest cost per enrollee of any state Medicaid program.
Unfortunately, the program fell into mismanagement as subsequent administrations failed to properly oversee the complex program and its many contractors. Advocates for the poor and disabled worked closely with various administrations to improve the program for the benefit of its recipients.

In 2005, the TennCare program was dealt a devastating blow by Governor Phil Bredesen, who had promised during his campaign to reform the program. Instead of reform that repaired the mismanagement of the program, Bredesen terminated coverage for all the adults enrolled in the TennCare waiver as well as for all the adults in the optional Medicaid categories that most states cover. Nearly 200,000 people in the state have lost health coverage, including people with life-threatening illnesses. Many have died. Their deaths are continually being reported by the media.

It get�s worse . . .

The State has also codified the narrowest definition of "medical necessity" in the nation. Medical necessity is the gateway to Medicaid-covered services since a service must be found to be medically necessary before a Medicaid agency will pay for it. Like most states, TennCare's former definition make medical necessity equal to that which the standards of good medical practice would require. The current definition says that a service is medically necessary only when it is the cheapest care that is adequate. The definition explicitly states that the cheapest care may be no care at all in some instances. The definition also give the power to determine medical necessity to State bureaucrats, not doctors.

Now we have Cover Tennessee.

Cover Tennessee is a plan with premiums shared by the state (via taxes), the employer and the employee.

"CoverTN will not require high deductibles on the front end," Bredesen said. "Participants will have modest co-pays -- about $25 for a doctor's visit and $10 for a generic prescription -- and can carry CoverTN with them regardless of where they work. Initially, the focus will be on workers earning $24,000 a year or less and small businesses such as restaurants, retail shops and landscaping firms...

If this plan gets off the ground, it remains to be seen if it will blossom or crash and burn like TennCare.

Manulife Covets China's Uninsured as Health-Care Costs Soar

Bloomberg, Le-Min Lim, 28 March 2006Lu Yahu decided to buy health insurance from American International Group Inc. four years ago after his mother, a retired factory worker, caught a cold and spent half her $124 monthly pension on a single hospital visit.``Medical charges in China are so ridiculously high these days, you really can't afford to get sick,'' says Lu, 31, the founder of Shanghai Good

More Good News for Cancer Survivors...

Back in November, we told you about positive changes in the life insurance industry.

Well, there's even more good news:

Just twenty (short) years ago, one out of every two men diagnosed with prostate cancer could expect to die within 10 years. According to the National Cancer Institute, 93 percent of men with prostate cancer can now expect to live at least 10 years. Good news indeed.

Now, at least one carrier is expanding on that development. The Hartford is now offering life insurance at standard rates to men (age 60 and older) who have been surgically treated for moderate levels of prostate cancer.

What does that mean to your wallet?

Generally, insurers offer several rating classifications, depending on one�s overall health, cholesterol levels, medical history, and other factors. Most offer a �super select� class for folks who walk on water (or maybe that�s jog on water); about 3% of applicants will qualify. The next step down will be �select,� with rates about 10-15% higher. Then there�s �standard,� which is usually another 10-15% (or more) higher than select.

So this isn�t such great news after all, right?

Not so fast:

Below �standard� is �rated,� which can be 50-100% higher. And, of course, many carriers will simply decline to cover someone with a recent history of cancer.

Slow progress, to be sure, but progress nonetheless.

The Hartford anticipates that up to 250,000 of those diagnosed with prostate cancer in the past five years could be eligible for coverage under this new criteria. And it�s available for both permanent and term plans.

Hopefully, other carriers will follow suit.

Good on ya, Hartford!

Veddy Interestingk...

InsureBlog co-blogger Bob Vineyard also has his own little corner of the web. Over at Health Insurance 411, he vents about insurance (and other) issues. It's a little more "in your face," but a great read. Do check it out.

And Thanx to Bob for tipping us to a new blog called DoctorTricks. It's kind of a bulletin board for folks to share their frustrations with, and workarounds for, dealing with health care issues. Different.

Morgan Stanley Downgrades Manulife

Bloomberg, 28 March 2006Manulife Financial Corp. was cut to "underweight" from "equal weight" by Morgan Stanley analyst Nigel P. Dally in New York.

Veritas on BMO's Q1 2006 Earnings

National Post, Duncan Mavin, 28 March 2006In the numbers Bank of Montreal's above-expectations earnings for the first quarter of 2006 didn't impress Veritas Investment Research analyst Ohad Lederer too much.Although BMO reported diluted earnings per share of $1.22 compared to analysts' consensus forecast ranging from $1.17 to $1.21 per share, the figures "were not greeted with applause," noted Mr

Hidden Providers

This article clearly illustrates how hidden providers can cost you money.

When Greg Bulmash woke up in the middle of the night with fever chills from an out-of-control infection, he went to a hospital that was listed as a preferred provider by his insurance and thought he was covered for everything that would happen there. He was wrong.

It turned out that while the hospital accepted his insurance, the Emergency Room there was staffed entirely with doctors who didn't. The hospital didn't have to tell him this, the doctors didn't have to tell him this, and this little lack of information cost him an extra $153.50.

I truly empathize with his situation but also know he got off cheap compared to some hidden provider charges.

[This isn't the first time that Bob's offered his insights on this subject: click here for more]

Late March Grand Rounds...

After Elisa did such a great job with last week's 'Rounds, I was certain that it would be a while before another host came even close.

Fortunately, I was wrong (for once).

Doc Crippen has a tremendous postpourri, with interesting pictures, highlights and commentary. And, like Elisa, he's apparently reviewed and posted every submission he received.

My only quibble is that it leads off with cricket. Oh well, can't please everyone.

Here, Bite This Bullet

You are scheduled for surgery. While waiting for care you are given advance surgical prep meds to relax you. The orderly arrives at your room, transfers you to a gurney, and rolls you to the surgical arena.

Once you are moved to the operating room masked people appear. The people are surrounded by shiny steel equipment designed to monitor and assist in the procedure.

As the surgeon approaches one of the attendings reaches in their shirt pocket and withdraws a single bullet. �Open your mouth and bite down really hard on this bullet�.

Farfetched?

Maybe not, particularly if you have Medicare.

Imagine you need a life saving cardiac operation for your severely diseased and failing heart. Then imagine your surprise when you find out that your Medicare government health insurance pays less than 40% of what private insurances reimburse anesthesiologists for the same procedure! Now imagine your concern when you learn that because of such poor reimbursement rates only a scant few anesthesiologists in your area will provide services for cardiac surgical cases when the insurer is Medicare!

Welcome to universal health care . . .

Another Money Monday...

This week, the Carnival of Personal Finance may be found at Financial Baby Steps (cute, but relevant). There were plenty of interesting posts, too, although I was particularly intrigued by this one explaining why one should play the lottery. Hmmm.

We Get Letters...

Christopher Parks, the proprietor of the Med Bill Advisor blog, tipped us to an interesting article in BusinessWeek. Entitled �Fighting Off Health-Care Headaches,� it�s essentially a survey (as in primer, not questionnaire) of various health insurance problems and potential solutions.

Chris blogged briefly about this article on his site, and asked for our take on it, as well.

The underlying thesis of the article is that group health insurance premiums continue to rise, and this disproportianately affects small groups. According to Stacy Perman (the author), there are a number of interesting solutions:

First up, congress is contemplating legislation that would create Small Business Health Plans (SBHP�s). Also known as AHP�s (association health plans), the idea behind these plans is that, by banding together, small businesses can leverage larger numbers for better plans. Call it �IGA insurance:� my store has 5 employees, yours has 10, his has 20, etc, but together we have 100, and can catch a break.

Nice in theory, but, as Bob points out:

The �new� SBHP is just a re-packaged MEWA (multiple employer welfare assocation).

The economies of scale argument is valid. You can administer benefits for 100,000 employees for less (per capita) than trying to administer the same plan for 10 employees.

By offering a national, self funded plan, you can also bypass state mandated benefits which creates further savings. But who is left out as a result?

Most (if not all) states now require coverage for diabetics including their medication and medical equipment (syringes, A1C meters, etc.) but there are no federal laws requiring these items to be covered. So in theory (if not practical application) a SBHP could cover diabetics but not their medication and be in compliance with federal guidelines.

Same can be said in covering treatment by paraprofessionals such as PA (physician�s assistants), nurse practitioners, and social workers. Several states have passed laws that require carriers to pay for treatment by these paraprofessionals but there are no federal laws requiring the same.
Beyond these issues, managing a national SBHP/MEWA is a challenging task that has always failed in the past. Eventually these plans collapse or else become so expensive (mostly because of adverse selection) they are no longer attractive.

Another solution is �outsourcing� of benefits, aka employee leasing. The idea is that a business owner would no longer, well, employ his employees, but would contract out all employee �issues� (health care, worker�s comp, etc) to a staffing agency.

The attraction here is that it would relieve the smaller employer of many of the day to day headaches involved in managing his employees.

Intriguing though this might be, it�s not really new, nor has it proved to be a popular alternative. One reason for this may be that the other costs of setting up such an arrangement negate any group health savings.

The article also discussed �dual option� arrangements. For years, larger employers have offered so-called �cafeteria� plans which allowed their employees to choose from a variety of different insurance plans and companies. These can be expensive to administer, so smaller employers couldn�t afford to offer them, nor were carriers willing to make them available. Now, more carriers are offering small groups the option of offering more than one plan design. For example, an employer could offer a less expensive, less �frilly� medical plan, and offer employees the option of �buying up� to a more comprehensive one.

Or, an employer could offer to fund an HSA for those employees who chose HDHP�s, while cutting back on funding for the PPO.

All in all, an interesting article. My only real quibble is with the opening paragraph, which parrots the now-debunked myth of 45 million uninsured.

But that�s another post.

Dangerous Lives

Amanda Parsons, one of more than 400,000 Connecticut residents without health insurance, has a hole in her tooth but won't see a dentist. She also is delaying gallbladder surgery as she still owes nearly $7,000 for earlier gallstone surgery.

The pain gets intense at times, so the 26-year-old college student from Bridgeport takes Tylenol at night and borrows her father's old prescriptions.

"I don't go out," Parsons said. "I can't afford for anything to happen to me."

Parsons is among a growing number of Americans living precariously without health insurance.

The hole in her tooth can easily lead to other, more expensive problems. In addition to her tooth, mouth & gum problems can lead to more serious infections in other parts of the body.

Parsons said she lost her health insurance when she quit working full-time to attend college and do a required internship. She briefly obtained health insurance through the state, but was disqualified when state officials discovered she owned a 2001 Acura.

"It's the only thing I own besides my bed," she said.

A quick check of an online resource reveals basic coverage is available for $46 per month for a 26 year old female. This plan would cover most inpatient charges. A better plan that would cover doctor visits & Rx is only $64 monthly.

Paying for health insurance is also a struggle for small business owners such as Claire Criscuolo, who owns a popular vegetarian restaurant in New Haven.

Criscuolo offers to pay half the typical cost of $300 per month for health insurance for her 26 employees. But most of her young workers opt not to get insurance.

"I take a lot of vitamins," said Erin Guild, a 22-year-old cook at the restaurant. "I try really hard to not get sick."

Guild was recently hit by a car while riding her bike, but didn't go to the hospital. Criscuolo is also a nurse and determined she did not have a concussion, she said.

Apparently taking lots of vitamins do not protect you from Buick�s.

New Haven Mayor John DeStefano, who is also seeking the Democratic nomination for governor, said it's time for Connecticut to take a bold step toward universal health care coverage.

"It's one of the greatest inhibitors against job growth in the state," DeStefano said.

So universal health care, funded by high taxes, is apparently the answer to job growth.

Interesting philosophy.

Il Kids

Health insurance just became more affordable, at least for some.

Illinois is about to become the first state in the nation to offer health insurance to every child within its borders.

Every single child ought to have health insurance. In America today, there are nearly 9 million children who don't have health insurance

The 9M figure is a low estimate and included in the 45M uninsured that appears with some frequency in the press.

By charging premiums on a sliding scale, it plans to offer insurance to all children, even those of middle-class families whose kids aren't now covered. The expanded program is called All Kids.

Among them are Kyley and Tyler Cushman of Carmi, Ill. Sandra, their mother, makes $13 an hour working at a nursing home.

To cover her sons, 14 and 10, her monthly premiums would have been almost $400 a month under her employer's health insurance plan. Her husband, an electronics technician, who makes about $35,000, also has insurance from his employer. It would have been more than $300 a month if his plan had covered their kids.

An individual earning $13 per hour in a full time job makes about $26,000 per year. Added to the husbands income of $35,000 this brings their estimated yearly earnings to $61,000 per year.

Included in the 45M uninsured are 15M who earn in excess of $50,000 per year. Most people earning $50,000 or more should be able to afford health insurance.

Coverage with individual health insurance policies is almost always less expensive than trying to cover children under an employer plan.

So far, paying cash for their medical expenses has worked out. The younger son had a terrible earache this summer that woke him up screaming. They paid a little more than $100 for the office visit and antibiotics. They paid $145 for the older son's physical, required for enrolling in high school.

Their younger son has Perthes disease, a hip-development problem, but the Shriners charitable hospital in St. Louis has provided free treatment over the years for that condition. He no longer needs leg braces to walk.

Perthes disease is a condition that would be excluded under individual health insurance but is not a condition that would normally rate a declination for coverage. In a situation such as this, the Shriner�s hospital would still offer care that was excluded under an individual policy.

This seems like a good program the state is putting forth. However I do question the reasoning behind offering taxpayer subsidized coverage to those who earn in excess of $50,000 per year.

Approximately 40% of the households in America earn $50,000 per year or more.

Charity Docs

The percentage of physicians who provide free care to the poor has dropped over the past decade, signaling a growing problem for the uninsured, a survey suggests.

About three-quarters of physicians provided charity care in the mid-1990s, compared with about two-thirds now, according to a study released Thursday by the Center for Studying Health System Change.

This is not good news for the uninsured.

"Charity care is not the solution to our health coverage problems in this country," Hill said. "Maybe this will help wake up everybody so they understand we've got to solve the problem of almost 46 million people without (insurance) coverage."

Of course, this 46M figure has been dissected and challenged more than once at this site. The actual number of uninsured is closer to 21M.

Hill said the AMA supports the use of tax credits to make health insurance more affordable and changes in insurance regulation that would reduce costs.
Tax credits will do little to increase the number of uninsured.

Changes in legislation, such as allowing AHP�s (association health plans) are nothing more than a minefield.

This should be a wake up call to those who can afford health insurance but do not have it (approximately 15M) and those who qualify for taxpayer funded programs but are not taking advantage of them (another 18M).

The Dark Side of Universal Health Care

Multiple Sclerosis is �an autoimmune disease that affects the central nervous system (CNS)...In MS, myelin is lost in multiple areas, leaving scar tissue called sclerosis. These damaged areas are also known as plaques or lesions.� It is a debilitating disease, one that robs its victims of their health and, sometime, life.

It is also, generally, treatable and manageable. Medications and protocols exist that help those with MS function, contribute, and enjoy life.

That medication, however, doesn�t come cheap. Annual costs range from $5,000 to over $20,000. Most health plans cover at least part of this expense, and �big pharma� has programs to help ease that burden, as well.

At least, that�s the case in the good ole U S of A.

Across the pond, however, the outlook for those with MS just got bleaker:

�Patients with multiple sclerosis are being told that they cannot have drugs to prevent their disease from getting worse because the NHS cannot afford them.�

In fact, according to the Times, some patients have been told that they may have to wait a year before they can be treated, and others have even been bumped off the waiting list.

But the Times isn�t the only broadsheet with bad news:

�Standards of patient care will drop and the financial crisis facing the NHS worsen if a planned 10 per cent cut in the funding of medical training goes ahead, doctors' leaders said yesterday.�

That�s from the Telegraph, another British paper. It seems that the much-vaunted National Health service (NHS) is facing a major funding crisis:

�(S)enior figures in strategic health authorities (SHAs) and the deaneries have been warned at meetings with DoH officials that their budgets for 2006-07 are likely to be cut. A letter seen by The Daily Telegraph from an SHA to the directors of finance of 10 primary care trusts and seven NHS trusts warns them to plan on the basis that their budgets will be cut by 10 per cent.� (ibid)

Apparently, �universal� means �everyone suffers.�

UPDATE: For a related post, with a Canadian twist, see this item at Free Canada.

DIY = N/G

A poster on a forum that I frequent, and to which I often contribute, asked about a particular on-line insurance quoting service. He was �reading about insurance and stuff on yahoo,� and got a �quick quote that seemed reasonable.� At that point, he stopped because he �was concerned about giving out too much information to a potential scam.� The poster wondered if anyone else at that forum had used this service.

I replied that if he was concerned about his privacy, he should try term4sale, an online quoting service only (they don�t sell insurance).

I further suggested that he �meet with a professional, independent agent, preferably one with 5-7 years experience. He can help you determine how much and what kind of coverage(s) you need, and is accountable to you if/when there's a problem.� And I concluded that �contrary to popular belief, DIY life insurance does not save you money.�

My friend and co-blogger Bob chimed in, suggesting that I �expand on that statement.�

And so I did:

The "promise" behind the on-line/DIY insurance websites (be they for life or health) is that one can purchase insurance at a lower rate than working with a professional agent.

This is, of course, nonsense.

Insurance carriers charge the same rates whether you use an agent or not. In fact, one might argue that the carrier-based sites are even more expensive, because they keep the commission, but do not provide the services of an agent.

Those sites which are agent-based (eg Matrix Direct, et al) charge the same rates, but offer the services of a "remote" agent, i.e. an anonymous and unaccountable "someone" at the other end of the 800 line.

So there is no premium differential (savings).

Further, using a local, professional agent buys you several key features:

First (and foremost) is accountability. That is, an agent will work with you, helping you determine the proper amounts and types of cover, and must answer to you if he screws up. In addition, he has a vested interest in making and keeping you happy: he counts on your goodwill for referrals and to maintain his reputation.

Second, an independent pro has access to not only the "regular" markets (just like the web-based services), but to impaired risk markets, as well. Don't believe me? Try getting a life quote for a diabetic from either a carrier- or agent-based website.

Third, an agent is there at the most important time in the whole process: delivering the death-claim check. Didn't think of that, right? Most of us don't want to, but of course it's the underlying raison d'etre (literally, "raisin to eat") of the whole process. Do you think that your widow(er) wants a "check in the mail?" If so, then maybe you have some other issues to consider.

The same is true with health insurance [ed: I�ll skip commenting on the Gecko, and leave that to the P&C pro�s]: there is no price difference difference between the on-line services (or buying directly from the carrier) and using an agent. And again, the agent is there for you.

I would argue that, in the case of health insurance, the agent provides an even greater benefit: as an advocate. After all, there�s really only one claim on a life insurance policy (and it�s pretty easily adjudicated). But there may be many claims on a given health plan, some of which may not be adjusted correctly. The independent agent works for you; that is, if/when there�s an issue, he�s on your side, and knows a bit more about how to get those issues resolved (after all, it�s his livelihood).

And, of course, health conditions make an even greater difference in health insurance than in the life field. A pro will know which carriers to use, and which ones to avoid.

LAGNIAPPE: The original poster had one more question: �Is it best just to open the yellow pages and just pick an independent agent?�

I replied that, while the Yellow Pages are one source, I don't consider them the "best." Referrals are usually the most helpful: ask friends and family who they use (and if they're happy with that choice), one�s auto/home agent will generally know who the good life guys are, and the local chapter of NAIFA (that's the professional association for life folks) may be of help, as well. Look for someone with at least 5 to 7 years� experience in the field, and who has access to more than one carrier. Don't hesitate to interview more than one such: sometimes there's a "fit," and not.

That help?

SF Seeks SM; MHHI

SF seeks SM. Should be fun loving, enjoy quiet walks and romantic dining by candlelight. Non-smoker preferred. Must have health insurance.

Welcome to 21st century dating.

Everyone thinks health insurance is expensive. Health insurance is something to complain about. But apparently health insurance has as much sex appeal as Matthew McConaughey.

Well, maybe that�s an overstatement.

I used to work with a lady who (so it was rumored) did background checks and credit reports on prospective suitors. She finally landed a guy who fit her profile. Wonder if she would add health insurance & a 401(k) to a current list of �most wanted�?

Lisa Dunbar, a 49-year-old legal secretary, recently posted her prescription for romantic suitors on Craigslist's Los Angeles site. "Are you strong, smart and sophisticated, confident and kind, without being too uppity or conceited? Do you make at least $75,000 a year and have health insurance?"

Ms. Dunbar says that several years ago, when she was uninsured, she ended up in the hospital for hand surgery and had to rely on public assistance to cover most of the bills. The experience prompted her to change jobs to get health coverage. Now, she expects a mate with similar priorities -- one who comes bearing his own deductible and co-pays. "I want somebody to be as together as I am," she says. (Ibid)

I have been in the health insurance business for a long time and never realized just how much sex appeal I had. Who needs 6 pack abs when you have health insurance?

RBC, Priced to Perfection?

The Globe and Mail, Angela Barnes, 23 March 2006Royal Bank of Canada shares hit a record high Thursday, the same day as a Desjardins Securities report came out suggesting that the Royal's shares are richly valued.�We believe that Royal is now priced to perfection,� said Desjardins analyst Michael Goldberg. Even after its �surprisingly� big dividend increase, Canada's largest bank has the lowest

Joe's on a Roll!

As we've noted before, Joe Kristan at Roth & Co always manages to find interesting, off-beat tax stories.

Well, he's done it again: believe it or not, the IRS gets a piece of the pie when your credit card company forgives a part of your debt. Who knew?!

It's WonkaVision!

Okay, it's not really about Willy Wonka, but Policy Wonks. FoIB Kate Steadman hosts this week's edition of a new blog "carnival:" the Health Wonk Review. The purpose of the HWR is "to highlight the best-of-the-best, to showcase studies, perspectives, and insights not available anywhere else, and to provide the broader community with a fast and simple way to stay on top of all things health policy related."

Kate's the 3rd host of the Review, which is published every other week. Recommended.

Banks, Insurers Told to Plan for Bird Flu

The Globe and Mail, Paul Waldie & Sinclair Stewart, 23 March 2006Canada's top financial industry regulator is pushing the country's banks and insurers to draw up plans to cope with a possible outbreak of avian flu.The Office of the Superintendent of Financial Institutions has sent letters to three major industry associations -- the Canadian Bankers Association, Insurance Bureau of Canada and the

Hip, Hip, HIPAA ooray!

Sorry for the awful pun, but David Williams of the Health Business Blog beat me to the good one: "HIPAA to the rescue."

Apparently, physicians' computers are as vulnerable to hackers as the rest of us. But HIPAA specifically requires that providers take extra precautions to guarantee the privacy of medical records.

What's next, CSI: General Hospital?

A very good read.

J.P. Morgan Chase / Jamie Dimon

Jamie Dimon, the new CEO of J.P. Morgan Chase is taking a shot at the title of world's most important banker and trying to whip a sprawling financial conglomerate into shape.Fortune, Shawn Tully, 22 March 2006(FORTUNE Magazine) - Just about everyone who works on Wall Street has heard the stories about Jamie Dimon. The one about his shutting down the gyms and pulling the fresh flowers at J.P.

Slammin� on the Brakes...

For the fourth year in a row, rate increases on group plans have slowed. These costs are expected to rise by 8% this year, as compared to 10% last year (YMMV).

According to a new study, more than 8 out of 10 companies surveyed said that their group health costs were at (or even below) last year�s.

Some of this is due, no doubt, by an increase in employers� proactive methods: almost half conduct eligibility audits or will begin doing so (these are for the purpose of identifying which employees and/or dependents who should be on a spouse�s coverage).

One out of four plan to implement programs to improve their employees� health. Another third plan to start encouraging more judicious use of health care services. And a third plans to increase employees� accountability in managing their health.

Ah, personal responsibility: is there anything it can�t do?

North of the border, though, things don�t look so peachy: according to a survey of our neighbors to the north, 2006 premium increases are projected to be 13% (that�s about 60% higher than here). Here�s the takeaway quote: �the survey results show that in spite of employers efforts to contain costs through cost-sharing, managed formularies, and flexible benefits, health and dental costs are still rising more quickly than other group benefit plan components.� Oy, Canada!

What was that about a nationalized health care system here?

Cdn Banks in the Carribean

BMO Nesbitt Burns, 22 March 2006HighlightsWe believe that properly structured and properly managed, banking in the Caribbean is an excellent business. The islands generally have solid democracies and well-developed infrastructures and, while the economies may be separate, there is extensive movement of goods and people, making a pan-Caribbean footprint quite workable.This is an ideal environment

More Deals Seen as Insurers Seek to Expand Markets

Reuters, Simon Challis and Ed Leefeldt, 22 March 2006More insurance takeover bids are likely in the wake of British insurer Aviva Plc's 17 billion pound offer for Britain's Prudential Plc, as companies jockey for position, but analysts are skeptical of a merger-and-acquisition spree.Although Prudential has rebuffed Aviva's approach, the news, along with recent reports of early takeover talks

Economic Indicators

Transparency isn�t always about providers. For example, Washington (the state, not the city) is about to implement a new financial information law. Set to take effect this June, the new law requires the insurance commissioner to put together a database of health insurers' financial information. The twist: the database will be web-accessible.

So what info will be included? Everything from medical loss ratios to administrative costs, including average premiums per member per month, financial surplus levels and profit margins. Pretty comprehensive.

Is this an idea whose time has come, or a debacle in the making? I would say somewhere in the middle: for one thing, it will make it harder for carriers to "poor mouth" in their bids to raise rates or cut reimbursements. On the other hand, there are certainly intangible factors at work in the marketplace, which this new tool won't be able to quantify.

It will be interesting, too, to see if (when?) other states follow Washington's lead.

The Missing Piece

Health care, and health insurance rates are going up and everyone is pointing fingers. Some blame the carriers, others the lawyers (malpractice). Still others want to point to mandated (legislated) benefits as the cause. Of course pharma gets their share of the blame as well.

Actually it is a puzzle where all the pieces come together to make the big picture. Only problem is the missing piece.

Carriers are conduits. They take in premium dollars and pay out claim dollars. A portion of those dollars are retained in house for administrative costs and sometimes maybe 4% of the income is retained in profits.

Malpractice rates are high, particularly for some providers, which in turn cause the rates charged. When OB�s are paying $400k per year in med mal premiums that money has to come from somewhere.

No doubt legislated benefits, both at the federal level and state level impact rates. In general it appears that federal mandates can add as much as 20% to the cost of coverage and states another 10%. In some cases, particularly with small group plans this can be magnified to 50% or more of the billed premium.

DTC (direct to consumer) advertising has definitely changed the landscape considerably with regard to costs for medicine. On average, about 18% of every premium dollar goes out to cover meds. In some cases it can be as high as 25%.

Along those lines, a recent report indicated that switching away from brand name meds and toward generics could save $20 billion nationally. Many health insurance plans include Rx copays which are graduated. A typical brand name formulary drug may have a $30 copay but a generic equivalent is only $10. Most plans will only reimburse at the generic rate even if the med is scripted for the brand name but even then the patient is (many times) willing to pay the extra $20 difference just to have the branded med.

So why won�t consumers use generics?

There are many reasons but I think the big one is this. Until the patient feels the true cost of health care in their wallet their behavior will not change.

An extra $20 for a branded med really doesn�t hurt most budgets. Remove the copay and all of a sudden the difference is something to notice.

Prozac is a popular drug that is covered under many plans for a $30 copay. Remove the copay and the price jumps to $150. A generic equivalent (Fluoxetine HCL) is $22.

Percocet is used as a powerful pain killer and is another $30 copay med. Without the copay the price becomes $70. The generic equivalent (Oxycodone) is $5.

Office & Rx copays are high demand features of a health plan, but they are also high cost items. Remove those items from a health plan and allow the patient to become a true consumer of services and then health insurance premiums will start to drop.

Into the Pool!

My friend and co-blogger Bob Vineyard tipped me to this story in a local Columbus (Ohio) paper:

�S.B. (Ohio Senate Bill) 272 would create a formal state corporation named the Ohio Health Insurance Risk Pool...The pool would offer a health insurance plan, providing up to $1-million in lifetime benefits. Health insurance premiums charged by the pool would be at least 125 percent but not more than 150 percent of the premium charged for "standard individual rates in the state," according to legislative documents.�

Now, we�ve discussed High Risk Pools before (here and here), and concluded that they did show promise. Our primary concern was whether one could be designed in such a way as to be meaningfully comprehensive, yet reasonably affordable. In other words, offer decent coverage, especially for pre-existing conditions, at a price that wouldn�t totally wipe out the family budget.

As written, SB 272 seems to address both of these concerns. Eligible folks (essentially those who have severe and/or chronic conditions which make them �unattractive� on the individual market) would be able to access a plan through the OHIRP. In reading through the bill and the analysis, the Pool would offer a product that looks a lot like the current HIPAA guaranteed issue plan, but with a somewhat lower premium cap.

The other thing that the bill does is to simplify the process. That is, it does away with the required �open enrollment� seasons, and essentially makes the whole year open enrollment. This is a good thing.

Why, you ask?

The current system is front-loaded. That is, carriers are required to offer a specific number of �slots� each year to �the uninsurable.� As Bob has pointed out, this represents a much smaller population than the punditry would have us believe. Still, some carriers seem to �fill up� earlier than others, leaving fewer and fewer choices. In theory, the Department of Insurance is supposed to track availability, but they�re not always up-to-date.

One good sign is that at least one of the plans will eschew all those state-mandated benefits that help to drive up cost while limiting choice. The result could be a more affordable alternative. It will be interesting to see if such plans make it through the vetting process.

I�m concerned, though, about the make-up of the board of directors of this new corporation, which include:

�two from insurers, one from the Ohio Association of Health Underwriters, one member of the general public, one representative of healthcare providers, one each from large and small business, and one state representative and one state senator.� [ibid]

I�d like to see at least one professional, independent agent on that board. We are on the front lines of this very public debate, and can offer a unique perspective: because we represent carriers, and work for our clients, we have a �birds-eye� view of the process.

�But Henry," you may interject, "the board includes a representative of the Health Underwriters. Surely that puts to rest your objection.�

No, it does not (and please don't call me Shirley). Although I co-founded our local chapter, and have had experience with the state, I am no fan of the AHU (nor its life insurance cousin). These organizations are run by -- and primarily for the benefit of -- the carriers, not the agent or the public. The interests of the Association and of agents do not often coincide. Including an agent who is not beholden to the special interests of an Association would solve this dilemna.

And stay tuned for Part 2, as well!

A Very Grand Rounds

Our friend Elisa at Healthy Concerns hosts this week's round-up of the best of the "medblogosphere." Giving a 110%, she adds her own take on most of the submissions. IB co-blogger Bob Vineyard's post on the uninsured gets prominent display near the top...Thanx, Elisa!

Of special interest was this post from Marcus at Fixing Healthcare, who notes that it's not just about insurance and cost-shifting, but the culture, as well.

Another State Weighs In

Victoria and Jeffrey Moermond are spending $11,000 a year to provide health insurance to four employees at their Highland Heights auto repair shop.

But Victoria Moermond said that as that cost continues to rise, she and her husband might soon have to forego that benefit for their workers.

Proponents of a bill pending in the Kentucky General Assembly want to help small business owners like the Moermonds pay for employee health insurance.

The Insurance Coverage, Affordability and Relief to Small Employers program, also known as ICARE, would give companies with two to 25 employees incentive payments of up to $60 per month per employee to continue providing health insurance.

Under the terms of the program, businesses would only be eligible if they have not provided health insurance to employees in the past 12 months or have at least one employee with a high-cost condition such as cancer.

The program also is only open to businesses in which employees' annual salaries don't exceed 300 percent of the poverty level.

The program would require that businesses pay for at least 50 percent of the premium cost and that employees undergo health risk assessments when they sign up.

UBS Raises BMO Target Price

The Globe and Mail, Angela Barnes, 20 March 2006UBS Securities Canada Inc. has upped its 12-month price target for Bank of Montreal to $71 from $67, but maintained its �neutral� rating on the stock. The bank closed Monday at $66.17 on the Toronto Stock Exchange.Jason Bilodeau, who follows the bank for UBS, made the change after spending time marketing with BMO's newly appointed chief operating

Another Money Monday...

All Things Financial starts things off with The Carnival of Personal Finance. With tax season upon us, Joe at Roth & Co has a list of puzzling "strategies," especially ones to avoid.

The Carnival of the Capitalists is up, and host Keith of Casey Software blog has done an outstanding job with dozens of great posts. Notable among them is the first of a three-part series by Dr Hayek, who explores the difference between Socialized Medicine and Socialized Insurance. This is definitely NOT hairsplitting.

Show Me The Money

Not too many years ago, hardly a day went by when someone I was engaged in a conversation failed to say �show me the money�. The line was taken from the movie �Jerry McGuire� and just seemed to gain more fame than the actual movie.

Today people are saying the same thing about health insurance. Everyone complains about the rate increases and wants to blame the carriers. Fact is, the real driving force behind health insurance rates are the claims of people who use the plan.

So where did the money go?

According to a report by Blue Cross of Tennessee, the money went here.

18% was for prescription drugs
17% was for hospital inpatient expenses
17% for outpatient care
34% was for physician charges
2% was for �other� expenses such as DME, dental, orthotics, etc.

Two things are quite telling about this report.

First, prescription meds continue to make up a larger part of overall health care. What is interesting is that meds take up more health care dollars than inpatient hospital charges. Most people think of hospital bills as being outrageous but very few are concerned about the cost of meds.

Second, since hospital bills are a major fear it is interesting to note that only 17% of medical bills are hospital charges.

What this means is, if you have a major illness or accident and run up $40,000 or so in medical bills, only $6800 or so (on average) will be for the hospital charges. Your doctor(s) will consume another $13,600.

Show me the money? That is where it goes.

S&P Upgrades TD Ameritrade

TD Ameritrade Holding : Ups to 3 STARS (hold) from 2 STARS (sell)S&P, Analyst: Robert Hansen, CFAWe are impressed by TD Ameritrade Holding's trading volumes in January and February, which significantly exceed our estimates. Furthermore, we think higher margin rates and relatively stable commission rates should benefit earnings per share (EPS) growth in fiscal year 2006 (ending September).

DBRS Confirms Ratings of BMO

Sale of direct investing operation strengthens U.S. businessesInvestment Executive, James Langton, 17 March 2006Dominion Bond Rating Service today confirmed its ratings of Bank of Montreal.The firm says that the ratings and stable trends reflect Bank of Montreal�s sizeable domestic franchise. DBRS says that the bank is focused on maintaining solid domestic consumer, commercial, and wholesale

Ignorance is Bliss...

When I first started in this business, my then sales manager gave me a terrific piece of advice: �Henry,� he said, �you can�t compensate for other peoples� ignorance.�

Case in point:

I have a client, a small business with 3 principals, for whom I wrote the life insurance that funds their buy-sell agreement. These are term policies which have recently hit their renewal date, and thus a scheduled premium increase.

I met with them to go over the plans and their buy-sell calculations, and we determined that an increase in face amount (death benefit) was in order. We discussed options, and decided that new 15 year term policies (with Return of Premium option) would do the trick. Since they were pressed for time, I left applications with them, so that they could get a head start on some of the boilerplate.

Yesterday, I returned to complete the applications with them, and make arrangements for the required exams. I arrived to find that two of the three gentlemen had indeed completed their paperwork, but the third refused to do so.

Hunh?

Turns out, the third partner (we�ll call him �Howard�) has apparently tried to buy life insurance recently, and has been turned down � by his account � �three times this year.� Now, it�s not clear whether he meant the last 12 months, or the past 3 and a half. In any case, he went on to say that his wife had advised him not to pursue this new policy, because it would be a �waste of time.� I asked him if he was comfortable with the fact that his partners� families would receive twice as much as his if there was a claim, but that apparently didn�t phase him.

So I asked him which companies had turned him down. He didn�t know.

Further �hunh?�

Turns out, he had actually completed the application for only one plan, but his wife has assured him that he�s been turned down three times, because she tried to get him a new plan, as well.

I asked him (tongue firmly in cheek) just how long his wife had been in the insurance business. He looked a bit confused, and replied that she wasn�t. At that point, I stopped: there�s really no honor in causing marital rifts in the pursuit of a sale. I did ask him if he would mind finding out, and telling me, the names of the other carriers his wife had (allegedly) applied to on his behalf. Then, I packed up my briefcase with the two completed applications, and made my exit.

There are a number of problems here, beginning with the fact that, if �Howard� is to be believed, his wife actually completed (and signed) applications for him. Second, an experienced agent would never let a case get to a point where there were multiple (let alone three!) declinations. Such an agent would have completed a pre-screen, spoken with underwriters at carriers which specialize in the impaired risk market, and would have already had the case placed.

What this situation tells me is that either the client (and/or his wife) was working with an inexperienced agent or that they chose to go the on-line route. How do I know this? Because I know his health history, and had already taken it into account before making my recommendations. Granted, I had no way of knowing about the three declines, but that�s not really the point.

There are no doubt situations where a term life policy may be a DIY project. But not when one knows for a fact that one has on-going (and potentially serious) medical conditions.

But I can�t compensate for �Howard�s� (or Mrs Howard�s) ignorance.

Term Trends...

As a member of LIMRA�s Producer Panel, I am �privileged� to regularly participate in industry surveys. The most recent such was about long term trends in the term life insurance market.

LIMRA (the Life Insurance Marketing and Research Association) is essentially an insurance industry �think tank.� I�m not really sure what criteria it uses to select those who are asked to serve on the Producer Panel, but I did get a nice pen, and first dibs on the results of its research.

Term insurance is the most widely-sold life product, most likely because it is � at first � the least expensive. It is analogous to �leasing;� rates are locked in for a specified length of time, and there is generally an option to purchase (convert to a permanent plan) at the end.

The results of the survey to which I alluded are quite interesting. Almost 500 of my closest colleagues and I were asked a variety of questions about selling term life insurance. About 95% of us sell individual term products (are the other 5% liars, or just different?). On average, we sell about 30 such policies a year.

More than 8 in 10 of us consider term insurance �easy to sell.� I suppose it depends on one�s definition of �easy:� as opposed to what?

In our meetings with clients, most of us talk about income replacement. That is, how will the family meet its financial obligation absent mommy or daddy�s paycheck. Although we also discuss estate planning and the kids� college funds, apparently few of us bring up critical illness plans or charitable giving.

I was pleasantly surprised to learn that most of us do an FNA for our clients. Financial Needs Analysis can be as complicated as advanced computer modeling, or as simple as a pencil and legal pad (my preferred mode). Regardless, it means that we�re not just picking numbers out of thin air, but actively engaging our clients in the process.

In the �Not Sure What To Make Of This� Department, it appears that 51% of the individual life policies we sold last year were term.

As an independent agent, I can sell policies from most any carrier. But, like most of my colleagues, I choose to regularly do business with only a handful. According to the survey, agents� top two criteria for selecting a primary carrier are �competitive price� and �excellent financial ratings.� I find that interesting, because my top two were underwriting and finances. Live and learn.

I�m not really sure what, if any, lessons to take away from this experience. If nothing else, I am heartened that so many of us take our roles seriously, as evidenced by the ubiquity of financial needs analysis, and emphasis on carriers' financial strength.

Good show.

DBRS Confirms Ratings of CIBC

Ratings agency notes improvement in business practices, corporate governanceInvestment Executive, 15 March 2006Dominion Bond Rating Service today confirmed the ratings of CIBC, with trends remaining stable. The ratings agency suggested that capital levels and reputation risk management are the key to higher ratings.The bank�s ratings are supported by CIBC�s lower-risk retail business mix and

What Price Cancer?

Here is your medicine. That will be $8,000 please . . .

The cost of living just went up. For some, it increased to a level that defies comprehension.

I understand that companies, all companies, need to make a profit in order to stay in business. Only the government can continually operate year after year at a loss and keep going without missing a beat.

Pharmaceutical companies get a lot of grief. Some of it is even deserved. But the latest saga in pricing almost defies comprehension.

Medicine that last month cost $77 to fill is $548 this month. Why? It is a low volume drug so the wholesale price must be inflated to cover the cost of producing the drug and getting it to market.

Other meds that have been used successfully for one illness are now showing promise when used off-label. This means their market is expanding so pricing can increase to meet demand.

This paradox is what is confusing, even to those who seemingly understand the yin and yang of health care.

One has low demand, so the price is inflated.

The other has high demand, so the price is inflated.

OK, so what am I missing here?

But that is not the real issue here. Pricing is something that is not controlled by outside forces.

What you pay for the drugs is another issue.

More importantly is what your health insurance plan will pay.

To an extent the carriers are caught in a squeeze. For situations like Joyce Elkins faced, her �old� drug (Mustargen) is most likely a formulary drug. This means a typical copay of $35 or less.

Not a big deal to her, but it is something that will impact health insurance rates if this recycling of older meds with new, higher pricing, becomes prevalent.

The off-label usage of newer drugs creates a problem for carriers and insured�s alike.

In the case of Avastin where the price has zoomed to $8,000 per month everyone is squeezed. This is bad news for those who rely on this med for treating colon cancer.

Worse news for those who have breast or lung cancer.

When a med such as Avastin is prescribed for an �approved� disease the cost is high, but mostly absorbed by the carrier. When it is prescribed off-label, then it becomes a non-covered medicine and the full cost must be borne by the patient.

That�s a real bummer.

So how does a patient cover the high cost of cancer fighting meds? One way is to find a plan that does not put a cap on Rx benefits. Another is to limit your total out of pocket with a HDHP (high deductible health plan). Still another is to supplement your major medical with a lump sum critical illness plan.

And the beat goes on.

TD Banknorth Warns Earnings Estimates 'Too High'

Reuters, 15 March 2006TD Banknorth Inc., a large Northeast U.S. bank, said analysts' consensus forecast for first-quarter profit of 60 cents per share was "too high," leading some analysts to cut their estimates.Chief Executive William Ryan said at an investor conference on Tuesday that first-quarter profit should be between 55 cents and 60 cents per share. The Portland, Maine-based bank also

Scotiabank-AGF Gossip

The Globe and Mail, Derek DeCloet, 15 March 2006When you run the best-performing large bank of the past 20 years, losing doesn't sit well. But every month brings Rick Waugh a reminder of Bank of Nova Scotia's biggest weakness, and a new theory on how he's going to fix it.The Big Five banks are conducting a stealth takeover of the mutual fund business. Scotiabank is missing out. Its fund division

The Price is Right � Not.

I am fortunate in many ways, not the least of which is in the caliber of my colleagues. Several of us, prompted by the following email, have been debating an issue that has so far been, well, �under the radar:�

Just had a client call to complain that [his insurer] is refusing to reprice a network provider claim.

He has a HDHP [High Deductible Health Plan, typically as part of an HSA arrangement], had it for a couple of years, no problems. Now his wife is pregnant. She went to a network OB and asked for the bill to be submitted to the carrier. He got the EOB (supposed to fax to me later today) and no discount. He calls [the carrier] and is told since he does not have maternity benefits there is no discount.

Rubbish!

The doc has a contract with Coventry (PPO) and it obligated to abide by the terms, regardless of whether the item is a covered expense or not. This is the way I have always understood it. This is the way I have explained to clients and have never had a problem.

I suspect the person he talked to at [the carrier] had no clue.

One of the benefits to network-driven plans (be they HMO�s or HSA�s) is that one is entitled to discounts on providers� services. That is, one needn�t pay �retail� for a given procedure, or office visit, or prescription medication. We generally take these for granted, because most plans now include a network component.

Re-pricing is the process by which the insurance company applies those discounts to claims. I had never really given this much thought, and had also assumed that using a network provider resulted in a discount. Apparently, though, this is not always � or even usually � the case. In speaking with a number of my carriers (including the one in Bob�s email), it became readily apparent that any service which is not a covered benefit will not receive the discount.

This means that not only will that service not apply to the deductible, the client will pay full retail for the �privilege.� Talk about a double whammy!

I am somewhat ambivalent about this issue: on the one hand, it seems to me that the fair and reasonable way for carriers to handle this is to apply the discount, regardless of whether or not the service is �covered.� And there�s this: it�s unlikely that this would cost the insurer anything; they�re processing the claim and paying for the network anyway, so why not apply the discount?

On the other hand, if the contract (the policy) doesn�t allow for this, then the carrier is under no obligation to apply the discounts. And it appears that this is standard industry practice. That doesn�t necessarily make it right, but it also means that the carrier in this case is not out of the mainstream.

Another of my colleagues responded that �(t)he discounts are for the benefit of the carrier, which is passed to the insured client in the form of lower premiums and stop-loss limits. Since the deductibles and stop losses are exceeded by any substantial claims, the insurer is the true beneficiary of the discounts.�

This is a sensible and informed response, and addresses the underlying issues quite well.

While I�m not sure that this issue has been resolved, I am sure of one thing: do not assume that your insurance policy will work exactly as you think it will (or want it to). Ask ahead of time not only if a given service is covered, but whether is eligible for the network discount. After all, a penny saved�

Manulife Continues to Gain Ground in US Variable Annuities

Scotia Capital, 14 March 2006� U.S. variable annuity Q4/05 industry statistics were released late last week.� While Manulife continues to gain market share in terms of both sales and assets, the same cannot be said for Sun Life. Manulife's market share and positioning in variable annuity sales continues to climb, up from 5.6% to 6.0% QOQ, with market positioning increasing from #9 at the

Grand Rounds...

The best of the medblogosphere, hosted this week by the Geek Nurse (his epithet, not mine), with the whimsical theme: Is the glass half empty, or half full?

Manulife Airs Ambitious Thai Goals

The Nation, Piyarat Setthasiriphaiboon. 14 March 2006Following the company's merger last year, Manulife Insurance (Thailand) plans to double the size of its premium take every year in its quest to become one of the country's top five life insurers by 2016.To that end it will this year will recruit at least 500 full-time agents, bringing to 950 the number of sales reps it has working for it. It

What Color is Your Parachute?

Think you have coverage? Maybe not. At least not with a major carrier here in Georgia.

This carrier known for their �color� was purchased a few years ago by a California holding company. Last year the California company merged with another holding company based in Indiana.

The Indiana parent decided clients would be better served if accounting functions were handled in California instead of Georgia.

Premiums (and commissions) were still calculated here in Georgia, but disbursements are now handled in California.

The result has been disconcerting to some individual policy holders and small groups. Some clients, don�t know how many, are just now receiving notices their coverage lapsed as far back as November 2005 for failure to pay the premium. This means some people have not had coverage for 3 months or longer because their premium was not received and properly credited on a timely basis.

Sometimes the policyholder found out when they tried to get a prescription filled. Other times they did not know until they were notified by mail of the retroactive cancellation.

In some cases (I am certain) claims have been paid that will now have to be reversed . . . at least until the coverage is reinstated. Of course if reinstatement is allowed some may have to pay up to 5 months premiums to bring the case current.

This cannot be good.

It's Carnival Time!

This week's installment of the Carnival of the Capitalists may be found at the Pro Hip Hop blog (yes, THAT hip hop). It's actually a pretty interesting (if offbeat) site. While you're there, check out Hayek, MD's post on the new implications of a seven year old study.

FoIB Personal Financial Advice hosts, appropriately enough, the current Carnival of Personal Finance. Five Cent Nickel has a heads up on some new money scams.

And, while not Carnival-related, our friend Joe Kristan has some timely -- and helpful -- advice for taking last-minute tax deductions. Thanks, Joe!

CIBC to Buy Barclays' Caribbean Stake for U$1.1 bln

Reuters, Cameron French, 13 March 2006 ($ in U.S. dollars unless noted)Canadian Imperial Bank of Commerce said on Monday it will buy a 43.7 percent stake in FirstCaribbean International Bank from Britain's Barclays Plc for $1.08 billion.The cash and stock purchase will give Canada's No. 5 bank an 87.4 percent stake in Barbados-based FirstCaribbean, which was formed four years ago from the merger

RBC Consortium to Set Up Chinese Fund Joint Venture

Shanghai (Reuters) - A consortium including Royal Bank of Canada plans to apply this month for regulatory approval to launch a Chinese funds management joint venture, sources familiar with the move told Reuters on Monday.The consortium, which also includes China's Minsheng Banking Corp. and the country's top electricity grid operator, State Grid Corp., aims to launch the business by May, the

Net Mutual Fund Redemptions for 3 Banks During RRSP Season

The Globe and Mail, Keith Damsell, 13 March 2006Canada's big banks are posting some starkly different mutual fund sales this registered retirement savings plan season.The fund arms of Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal and their subsidiaries continue to excel, racking up a staggering $3.6-billion in combined estimated net sales in January and February. Industry

F�d�ration is Quebec's Top Financial Institution

The Toronto Star, Stuart Laidlaw, 13 March 2006Hull, Que.�The details of Jean Bruneau's daily business dealings are the stuff of dreams for a man like John Ebsary.In an office overlooking the nation's capital, the branch manager for the Desjardins credit union describes how two dedicated insurance salespeople sell policies at the branch, and how his and 12 other credit unions work together to

Capital One to Buy North Fork for U$14.6 Billion

Cash and Stock Deal Marks Push Into Traditional Banks, Cutting Credit-Card RiskThe Wall Street Journal, Dennis K. Berman & Robin Sidel, 13 March 2006Capital One Financial Corp. agreed to buy North Fork Bancorp for $14.6 billion in cash and stock, accelerating the large credit-card issuer's push into the traditional banking business.The deal, which the companies disclosed last night, underscores

Manulife Plans Major Growth Arc in China

Shanghai Daily, Zhang Fengming, 11 March 2006Manulife Financial Corp, the world's fourth-biggest life insurer, plans to boost its presence in China tenfold over the next decade to tap the country's growing demand for personal financial protection."We want to grow as rapidly as possible in China and expand all our business, including premiums, offices and sales force, at least five to 10 times

One Beellion Dollars!

Well, whaddaya know: according to a recent study, over the past three years, folks with HSA's have deposited almost $1 billion in their accounts.

Over 800,000 such accounts have been opened, with about 60 new accounts being added each month. Even more interesting: the average account balance is almost $1,200.

Now, naysayers will no doubt adopt the "glass is half empty" interpretation. But that would be misleading:

The typical "generic" copay plan has a $500 deductible, and another $1,000 of co-insurance (i.e. $1,500 out-of-pocket maximum), plus a higher premium. If we assume that most HDHP's use the $1,200 single (or $2,500 family), zero dollar coinsurance configuration, that means that the HDHP has already saved these consumers money.

How's that, you ask?

Pretty simple, really:

� Singles would have a $1,200 out-of-pocket max, which the HSA now covers in full.

� Families would have a $2,400 max, which is effectively reduced to $1,200, or $300 less than the co-pay plan.

Nice.

But it gets better: we're starting to see heavier competition for HSA deposits among banks, credit unions and other financial organizations as these balances continue to grow. The study projects that the number of HSA administrators or custodians could grow from 300 to 400 by year's end.

Not too shabby.