Merry Christmas To All

UnConstitutional Mandate

Virginia's Attorney General discusses the unconstitutional nature of the individual mandate in PPACA

Have You Ever Been Experienced?

"That Case is A Dog With Fleas." This is what an underwriter will say just before issuing a decline to quote letter or a bid 20% over your renewal rates. Over the years I have heard the phrase and used it myself while working on the carrier side to discuss a group with appallingly bad loss experience. A carriers underwriting methodology is designed to account for the results whatever the cause of poor experience. In other words the carrier does not care why the experience is bad only that they are accurately pricing the bad experience. So what makes a dog a dog when it comes to group claims experience. Is it bad hring practices or a poor corporate culture? Some insights are available froma respected source.

It Seems that Tom Rath and Jim Harter  of The Gallup Company have coauthored a bestselling Book, Wellbeing:The Five Essential Elements.

Career Wellbeing: how you occupy your time and liking what you do each day.


Social Wellbeing: having strong relationships and love in your life.

Financial Wellbeing: effectively managing your economic life to reduce stress and increase security.

Physical Wellbeing: having good health and enough energy to get things done on a daily basis.

Community Wellbeing: the sense of engagement and involvement you have with the area where you live.

These five elements of wellbeing are measured by Gallup’s Wellbeing Finder, an assessment with scores that range from 0-100. When Gallup compared overall wellbeing indexs for those employees who were struggling (defined as 50-59th Percentile) they found an average annual cost associated with sickdays of  $6,168 based on a median wage of $200/sickday. Comparably, those employees who were thriving (defined as 70-79th percentile) had an average annual cost associated with sickdays of  $2,784. For those keeping score that is a difference of $3,384 per employee per year which for a company with 1000 employees would translate into $3,384,000 annually. If one were to drop down to the 40th-49th percentile the average annual cost associated with sickdays is $7,560 which is a differential of $4,776 or $4,776,000 for the fictitious 1000 life company.
 
Traditional wellness targets physical wellbeing like diagnoses of hypertension, high cholesterol, back pain, diabetes, depression, sleep apnea and insomnia. Looking at the the employees who with such diagnoses were struggling(50-59th) incurred an average of  $6,763 in disease burden annually just based on these diagnoses which compared to $4,929 (70-79th) a per person differential of $1,834 or $1,834,000 for our fictitious 1000 life company. For those keeping score the combined we are now up to an annual cost of $5,218,000 just for sick days and disease burden associated with chronic conditions.
 
Gallup then took the disease burden a step further in order to pinpoint the annual increase in disease burden costs just year over year. Based on new cases of disease burden only (and adjusting for demographic differences), the average annual new disease burden cost for people who are thriving is $723, compared with $1,488 for those who are struggling/suffering — a per-person difference of $765. Based on these figures, those who are struggling/suffering realize two times higher new medical costs due to disease burden (2008-2009). For those keeping score the combined we are now up to an annual cost of $5,983,000 annually just for sick days, legacy and new disease burden associated with chronic conditions.
 
If you are not completely depressed yet do read on. Among randomly selected U.S. workers, a mere 28% are engaged in their jobs. People in disengaged workgroups are nearly twice as likely to be diagnosed with depression, have higher stress levels, and are at greater risk for heart disease.
 
There are many employers who will no doubt believe ardently that their employees social wellbeing has no connection with their job. Gallup results bear out this opinion.
 
Just 5% of workers strongly agree when asked if their organization helps them build stronger personal relationships, while most employees disagree with this statement.  



People in disengaged workgroups are nearly twice as likely to be diagnosed with depression, have higher stress levels, and are at greater risk for heart disease.
Gallup has extensively studied the impact of friendships on an organization’s productivity. By asking more than 15 million workers if they have a “best friend at work,” we discovered that people who have high-quality friendships on the job are seven times as likely to be engaged in their work. Without a best friend, work can be a very lonely place: Those without a best friend in the workplace have just a 1 in 12 chance of being engaged. Social relationships at work have also been shown to boost employee retention, safety, work quality, and customer engagement. It seems that like it or not management has a strong need to assure all employees are encouraged to thrive. Good managers know this but why on earth would a smart company not institutionalize the expectation that the integration of all employees into the social fabric of the company is the expected standard for those managing people?

Like most Gallup research the book is painstakingly footnoted and the data is statistically significant.

If you are an employer that has taken a massive rate increase on your group Health or Group Disability due to poor losses you have been "experienced." The underwriters do not care why your experience is so bad they just want no part of your risk and they price accordingly. While that may be bad news the ability to implement sound human resource countermeasures along with coordinated employee benefit design plan changes and strategies to hire and  assist more employees in thriving in the 5 areas of wellbeing just might pay enormous dividends in stabilzing benefit costs and boosting productivity and profitability. Or you could just do nothing while complaining your insurer is ripping you off and all those large claims will not happen again next year .

We all laugh when R. Lee Ermey impersonates a therapist in the Geico Commercial. There are without question many executives who will view the Gallup research on wellbeing and conclude its just another voyage to namby pamby land. Many of these executives will will have invested in health insurance, wellness, EAP's, short and long term disability. How could just 8% of those surveyed agree their organization helps them improve their physical health as the Gallup research shows? Easy. They are not engaged. Some executives are eyeing 2014 when they can dump their employee population into the Obamacare Exchange and take the savings to the bottom line. One might ask whether it makes more sense to craft a strategy now that can lower health costs in order to gain a profound human capital advantage over competitors planning to dump their populations into the exchanges. The hard reality employers must face is that the issues this Gallup survey brings into focus on wellbeing persist whether your employees are in the exchange or not. It will certainly be impossible to access disease management data in aggregate for an employers population in an exchange in the era of HIPAA.

We Remenber

Grand-fathering Update

November 16, 2010, the federal government published an amendment to the original “grandfather” regulations that were published last June concerning how employers can maintain grandfathered health plan status.
The new amendment “allows all group health plans to switch insurance companies and shop for the same coverage at a lower cost while maintaining their grandfathered status, so long as the structure of the coverage doesn’t violate one of the other rules for maintaining grandfathered plan status.”


The updated announcement is posted on the U.S. Department of Health and Human Services website, click here to view that announcment. This amendment is scheduled to be published tomorrow, November 17, in the Federal Register.



The HHS website states further:



“The purpose of the grandfather regulation is to help people keep

existing health plans that are working for them. This amendment furthers

that goal by allowing employers to offer the same level of coverage through

a new issuer and remain grandfathered, as long as the change in issuer does

not result in significant cost increases, a reduction in benefits, or other

changes described in the original grandfather rule.”



HHS notes that “the original regulation only allowed self-funded plans to change third-party administrators without necessarily losing their grandfathered plan status.” The revised regulation impacts “insured group health plans” but not the “individual market.” HHS elaborates that “(u)nder this amendment, all employers have the flexibility to keep their grandfathered plan but change insurance company or third-party administrator.” The regulation was motivated in part to allow employers to shop around for better-priced insurance.

Ten Thoughts On Hiring A Benefits Broker

Engaging a broker to assist you with solving your benefits issues be they cost, communications, enrollment or problem solving with existing vendors can be a difficult task for business owners and professionals faced with the task. Here are some critical considerations to assist you in that task.

1. Do you desire a transaction or a relationship with your broker rooted in performance over time?
2. Do you want to work with someone who sells to you or someone who problem solves on your behalf? Its easy to separate the salesman barraging you with requests to quote your business its far more difficult to find the professional who proactively proposes solutions to your problems after asking a lot of questions. Professionals do not quote your business they are engaged upon being hired as they simply do not need the practice.
3. Google is your friend.Google the brokers name. What does it tell you about that individual? Are they published? What is their background professionally? Do they offer valuable professional insights and opinion on the pressing matters of the day like health care reform?
4. Are they independent? By that I mean do they represent multiple insurance companies?
5. What is the brokers business model?  Are they focused on revenue generation or the service of existing customers?Will you as the business owner or benefits owner deal with someone who is an experienced professional or will you deal primarily with an account manager or service prepresentative who works for the broker? If the latter why not just hire your own clerk? Who you deal with routinely is a good insight into the business model a broker utilizes.
6. Does the broker specialize in benefits? Property & Casualty and Employee benefits are fundamentally different businesses with different markets and completely different risk dynamics. Dealing with the benefits department at a P&C shop is like buying fine wine at a convenience store; you may geta bottle but you may not savor the experience. People who are experts at everything tend to lie about other stuff too.
7. Can the broker interface effectively and educate and train your staff to effectively manage benefits through vendors or will you have to go through the broker for every trivial issue? The best brokers align competent vendors who can deliver for their clients based on clearly defined expectations and get involved quickly when the vendor stumbles. In the era of HIPAA relying on your broker to solve every issue is a recipe for delay and frustration but some brokers like to control their clients in this manner always blaming the carriers.
8. Who called whom? In other words are you giving a shot to someone who has been begging you for years to quote your business or are you contacting a broker whom you were referred to by someone whose opinion you respect? Think about this carefully.
9. Do you really want to deal with an employee about employee benefits? In other words as a business owner or the principal  at your firm charged with handling employee benefits do you want to deal with someone who receives a paycheck for doing a job or someone whose compensation is based on performance and your ultimate satisfaction? In America the best professionals work for themselves because they can its really that simple.
10. Bigger is not necessarily better. You want someone you would easily refer to a family member or best friend needing assistance with employee benefits. If you do not feel this way about your broker it may be time to shop for a new broker.

Thanks To All Veterans

Thanks to all the veterans out there as well as those presently serving. Took my Dad to lunch today. He is a US Navy Veteran who served from 1951-1955 as a corpman on the USS Johnson a destroyer. About half Dad's class in corpman school wound up serving with the Marines in Korea. Many of them never made it home.

10 Reasons For Tuesdays Election results

Yes, the tidal wave that elected a Republican US Congress along with numerous state houses, senates and governors was due to the economy Mr President but it was also due to the failures systemic within HealthCare Reform.

1. As Rasumssen polls on the evening of the election 59% of those who voted in the election favor a repeal of your beloved PPACA.
2. Sixty-three percent (63%) of those who voted today are at least somewhat angry at the current policies of the federal government. That includes 42% who are Very Angry.
3. Look at the US Map for a graphical representation of election  results here.
4. You said HCR was essential but it raises the deficit.
5. You said no pre-existing conditions for children but try to find a carrier who will write a child only policy in the individual market.
6. There is no longer a market for salaried only carveouts on a group basis thanks to PPACA.
7. Obama said people could keep their Doctor but seniors under Medicare advantage plans will not because those plans are toast raising costs for fixed income retirees.
8. Obama said PPACA would lower costs for employers but trends show the mandates of PPACA are accelerating cost increases for employers.
9. Those employers faced with Massive increases no longer have the catstrophic options which might have made keeping a health plan possible thanks to PPACA.
10. Everybody but President Obama seems to understand there is no way in hell those exchanges will be up and running by 2014.

The mid-terms were a referendum on President Obama and the policies of an arrogant Congress led by Harry Reid and Nancy Pelosi who shoved an idiotic stimulus bill, a Health Care "Reform" bill, a financial services reform bill. Thank God you failed on Immigration reform and cap & Tax.

The mid-terms were a complete and utter rejection to Progressive Wonkery.

Vote!

OTC Medicines Not Eligible For Purchase With HSA Funds in 2011

Thanks Congress. I appreciate the 40% tax you just placed on my Loratadine. Americans are just discovering that beginning in 2011 they can no longer pay for OTC meds with their HSA. Since Americans take many medicines including OTC every day it has been accurately estimated that this provision of Obamacare will raise costs to the tune of 40% for many Americans. There is an excellent discussion of this subject here.

Failure Of Central Planning Via HHS

It is indeed a positive trend to notice increasingly cogent reporting coming from the media and blogosphere with respect to Obamacare. Its about time!

 The media is finally reporting on trends average Americans know all too well in the season of open enrollment; Namely, that health insurance premiums are exploding to unaffordable levels particularly for child coverage under group plans. Worse yet, consumers have lost their ability to go to the individual market for child only coverage since insurers are want to write new business individual policies that will be completely unprofitable.

Merrill Matthews writes in Forbes of The Heavy Hand of Katherine Sebellius.

Jeff Jacoby writes in the Boston Globe of Obamacare Blowback.

John Stossell points out that HHS cannot Repeal The Laws of Economics. Quotes from Mr Stossell are below.

When Obamacare was debated, we free-market advocates insisted that no matter what the president promised, the laws of economics cannot be repealed. Our opponents in effect answered, "Yes, we can."
Well, Obamacare has barely started taking effect, and the evidence is already rolling in. I hate to say we told them so, but ... we told them so. The laws of economics have struck back.
Health insurers Wellpoint, Cigna, Aetna, Humana and CoventryOne will stop writing policies for all children. Why? Because Obamacare requires that they insure already sick children for the same price as well children.
That sounds compassionate, but -- in case Obamacare fanatics haven't noticed -- sick children need more medical care. Insurance is about risk, and already sick children are 100 percent certain to be sick when their coverage begins. So if the government mandates that insurance companies cover sick children at the lower well-children price, insurers will quit the market rather than sandbag their shareholders. This is not callousness -- it's fiduciary responsibility. Insurance companies are not charities. So, thanks to the compassionate Congress and president, parents of sick children will be saved from expensive insurance -- by being unable to obtain any insurance! That's how government compassion works.
In 2014, the same rule will kick in for adults. You now know what to expect.

Of Course Mr Stossell is 99% correct. his article points out that Obamacare has already precipitated Principal Financial Group from exiting the group medical market. Principal has arranged for United HealthCare to assume all group medical policies over the next 3 years. One minor point Mr Stossell is that Principal insures 840,000 group health policyholders totalling over 5,000,000 members. Most of these policyholders are small businesses. Many are carve-out plans covering salary only members. I spoke to one such policyholder  yesterday who due to business conditions will likely be dropping health coverage as of November 1, 2010. Do you think those employees will be happy when they vote November 2, 2010?

It should further be noted that everything coming to pass with Obamacare was completely predictable. The sad truth is that we used to have major medical coverage that covered hospitalization. People paid out of pocket for office visits and routine care including prescriptions. Then came Medicare introducing relative value reimbursement and co-pays. Then came the HMO Act of 1973 which normalized low co-pays for routine office visit, pharmacy coverage and deductibles for all health care. Health care inflation exploded. The consumer driven movement in Healthcare that began early in this decade was beheaded by Obamacare because HHS and the exchanges have deemed these plans innappropriate for consumers.

In yesterdays post I pointed out Marc Siegels prescient explanation here but what I did not quote then is relevant and is included below;

None of this is terribly surprising. I mean, imagine if your car insurance covered every scratch or dent. Wouldn't you expect your premiums to rise to meet the expanded coverage? And wouldn't you expect your auto repair shops to become clogged with cars that didn't really need to be repaired, competing for time and space with other cars with broken transmissions or burnt-out motors?
If we want lower insurance premiums, we will need to return to a system that favors high deductible, high co-pay catastrophic-type insurance with a built-in disincentive for overuse, such as the kind that some employers have provided as an option up until now. Patients could pay for office visits from health savings accounts or other flexible spending tax shelters. More than 10 million Americans already have such accounts.
Unfortunately, the new law is taking us away from the kind of insurance that compels patients to have more skin in the game. As a result, we'll all pay in the long run — both financially and with less efficient, perhaps even lower quality, care.


The kind of insurance the new law mandates will, over the years, wear out the health care system in the same way that overuse in orthopedics wears out an elbow or knee joint. This won't be fun for doctors or, most important, for patients.

Marc Siegel is an associate professor of medicine and medical director of Doctor Radio at NYU Langone Medical Center.

Read It And Weep

Marc Siegel has written an op-ed in USA Today that is precisely on target with respect to the options employers no longer have in enacting catastrophic health care plans.

During the battle over this reform, you often heard, even from President Obama, that you'd be able to keep the plan you have. What he didn't say — but what we now know — is that because of this new law, the private markets will have to remake their plans, that the costs will rise and that the plan you were told you could "keep" is in all likelihood no longer available. But when your plan changes, backers of reform will simply blame it on those evil private insurance companies.

Very true Dr Siegel

A Billboard in Texas

Medical Loss Ratio Fight Looms

Obamacare specifies medical loss ratios for individual and small group at 80% and large group at 85%. NAIC officials are currently meeting to provide reccomedantion's that HHS would enact which would detail precisely what components of cost would count toward calculating the medical loss ratio. Claims are easy but what about nurse hot lines? What about premium taxes or the new taxes imposed by Obama Care--the market share tax on insurers and the $20B tax on medical devices? Should these taxes count towards the medical loss ratio or should it come out of the insurer's margin? Politico covers the story well here as it seems top Democrats are still not happy they cannot dictate policy after pushing the bill through via reconciliation. Former US Congressman J.C. Watt's provides some accurate perspective here.

Of course, the end game here for Democrats is to eliminate the insurance companies from the playing field so they can point out there is no option but single payer remaining as the big bad insurance companies simply could not operate at an efficient medical loss ratio. Very Orwellian--some pigs are more equal than others you see. When the government has a horse in the race with a giant bureaucracy poised to be filled with unionized federal workers who will owe their allegiance to the Democratic Party the stakes are high.

This is what Nancy Pelosi meant when she said we had to pass the bill to find out whats in it. Imagine competing in an industry where your competitors get to write the rules which put you out of business? Of course today this is the fundamental issue the US economy faces in addressing the 9.5% unemployment; small business is just not hiring because we have no freaking clue what our cost structure will look like in the near future thanks to all the 'help" the US congress is giving us "fixing' health care and spending like a drunken sailor coming off an extended cruise with the taxpayers debit card.

See The Future?

Consider the difficulty of gaining approval for SSDI or SSI benefits today. Its hard. You have to hire an attorney familiar with the intricacy of the bureaucratic Social Security system and pay them a percentage of your award to get approved. Failure to do so will result in a bureaucrat who will take advantage of your innocence to deny and delay the benefits you are "entitled to". FICA is after all a finite resource. It takes years to get approval in some cases and the SS administration rations through denial and delays. Many people just give up. Yet, this is the very future Americans can expect from ObamaCare with respect to their Health Care. How has SSDI worked out for America. The "trust fund " is bankrupt as a tidal wave of baby boomers hits the ages of 50-60 when disability and healthcare utilization rates are highest. The next time a liberal tells you how great ObamaCare is ask them if we can expect billboards on buses for attorneys assisting citizens in obtaining benefits that were promised to them like SSDI requires today.

The ObamaCare Disaster

Peter Ferrara has written a piece describing the impact of ObamaCare on the US. Focus just on the immediate impact on the average family premium which is aleady occurring;

...one study concludes that under Obamacare a typical family health insurance policy costing $12,300 today will cost $17,200 by 2013, $21,300 by 2016, and $25,900 by 2019. Another study concludes that insurance costs for young (up to 40) and healthy workers will double and triple in many cases.

These cost increases have already begun. But expect the liberal/left to insist that the soaring insurance costs caused by Obamacare prove that the public option, or even more overt socialized medicine, was needed after all. They will seek to prohibit the necessary premium increases, as in Massachusetts, and will be glad if that forces private insurers out of business.

Blame Canada II

Very interesting article that looks at the path Canada and Massachussets (which was the model for ObamaCare) have taken in Health Care and the implications for ObamaCare.

Dangerously Out Of Touch

Despite the debt induced meltdown which occurred in Greece President Obama asked G20 leaders recently to spend more only to be rebuffed by European leaders. Yesterday President Obama in the face of 9.5% unemployment figures for June told the American people we need comprehensive immigration reform before our border can be secured. On Wednesday the courthouse in El Paso was fired upon by Mexico and Texas' Attorney General begged President Obama for help;

Yesterday, gunfire from the cartels pierced that threshold and struck City Hall in El Paso. Fortunately no one was injured or killed. But that good fortune was not the result of effective border control - it was mere luck that the bullets struck buildings rather than bodies.
Luck and good fortune are not effective border enforcement policies. The shocking reality of cross border gunfire proves the cold reality: American lives are at risk.

In case your interested in the magnitude of the illegal problem in border states perhaps you might check out gamecam pictures from south Texas ranches where instead of deer photo's you are just as likely to find illegal immigrants who are increasingly carrying backpacks filled with cocaine and methamphetamine.

 CBO has weighed in on the stunning magnitude of America's debt time bomb and Obamacare has not even kicked in yet except in the form of massive rate increases to fund the Obamacare taxes as well as to boost reserves for dependents with pre-existing conditions as well as the coming days when the uninsured and all their costs must be absorbed with community rates. Small group health renewals of 30%-40% are common due to declining membership, risk pools that no longer include the young and healthy who are now unemployed, Obamacare taxes, a provider feeding frenzy of utilization driven by plans to accelerate retirement before reimbursement drops further and the certainty that the future holds no hope for improvement.
 
The harsh reality is that President Obama is in a race to secure a permanent reliable majority Democratic voting block. He needs a recipient class of reliable voters. Already almost 47% of Americans pay no income taxes and almost 49% approve of the IRS so providing 10-20M illegals a path to citizenship will be a game over strategy.

There was a time illegal immigrants traveled by night through South Texas and slept by day. We have reached a point to day where they travel by day with well armed coyotes carrying backpacks laden with drugs through well planned routes painstakingly planned by narcotics cartels.

As pointed out on this blog previously the uninsured in Texas create a significant tax burden on citizens through property taxes to fund their free healthcare. Now if Democrats succeed in passing immigration reform the rest of the counry will get to pay for their free Obamacare tax credits.Medical trend will accelerate as providers cost shift to private payers to close their reimbursement gap. Barack Obama is the shamwow salesman in a suit.

USA 1-0 Advances in World Cup

Having coached my daughters club soccer team I have been following the World Cup Matches and today the USA advanced by beating Algeria 1-0 in dramatic fashion. We should not lose to Aleria in tiddlywinks much less soccer. I understand there may not be a lot of scoring  but the sheer skill, atlheticism and startegy make these matches fun to watch especially given the state of the Houston Astros. On a positive note we are only 10 weeks from College Football--now thats real excitement.

A Dangerous Drug Problem

I remain a big fan of generic drugs and plan designs which encourage their utilization. There are however situations where generics do not work and can be quite dangerous. Yesterday I saw a client who had a successful lung transplant several years ago and what she had to say was quite alarming. It seems that after several years clients blood work was not quite right. Client was having bloodwork often to monitor and meds were being adjusted. Last week client went to pharmacy where anti-viral and anti rejection medicines were filled with generics. Client noticed some pills seemed heavier than others. Pharmacist agreed and they opened several capsules to find some were completely full and others were just half full. Pharmacist broke a seal on a different container and guess what? Same scenario with varying doses.

Imagine being a transplant recipient and finding yourself in a position where your bloodwork is varying and then discovering your anti rejection and anti viral generic medicines are displaying dosages that vary? That would be the time to ditch the generic. I have never done so in the past but I might also be tempted to see an attorney in this situation.

The generic drugs in question are acyclovir and tacrolimus and for the record the pharmacist found the varying dosage issue with both generic medicines and alerted the manufacturers.

Stupid Is As Stupid Does

It seems to occur with great frequency in the middle market. Unscrupulous brokers put forth self insurance schemes to unwitting employers tempting them with a savings in future years for health care. The whispers are akin to an insider touting a lock on Sunday in the NFL, or a broker pushing a penny stock. There are no free lunches.

Houston Energy iconoclast Matthew Simmons pointed out yesterday how BP was self insured for environmental liability.

There is a lesson here for employers considering self-insurance. Always hedge your bets based on the worse case scenario. You never know when an employee  dependent might decide to become an octomom. BP is looking at bankruptcy according to Mr Simmons within a month due to a penny wise and pound foolish decision to self insure a risk which was neither finite or predictable.

...we went 41 years in the United States without an oil spill. In a minor sense, this is what happened to the Challenger. We had so many successful shuttle takeoffs that the space station got kind of casual about this. But this is worse. BP was so certain that there wasn't any risk that three years ago they thought the insurance industry was ripping them off, so they're self-insured on this. How stupid!

Over 3 years ago I pointed out in a post on this blog the absence of a sound saftey culture at BP was found to be the root cause behind an explosion at a BP refinery that left 15 workers dead. Not much has changed at BP. The CEO's arrogance knows no boundary. There is a lesson employers can learn. Your corporate culture impacts you insurance costs. From my post linked above allow me to remind all businesses smaller than BP;

It is unfortunate a tragic explosion which killed 15 and injured 180 people was required to make the point at BP that a broken safety culture has consequences and hopefully senior managers at other companies will examine their own safety culture. The findings of the CSB will undoubtedly be good news for the trial lawyers who are filling the airwaves in Houston trolling for clients for the pending class action. The CSB report that links cost cutting in the safety program after internal audits revealed serious shortcomings create a reality which looks penny wise and pound foolish indeed. Many refineries including BP carry high limit occupational accidental death and dismemberment policies on their workforce which are employer paid. Texas is unique also in that employers can opt out of the workers compensation system leaving an employer (probably not BP but possible several of the contractors) open to unlimited damages in the event they were negligent.






Stop and think about how many of the 180 people injured are now on long term disability. If you think the AD&D renewal was ugly imagine the LTD renewal. My point is not to make light of a sad situation but to point out that a broken safety culture often manifests itself in high disability costs as unsafe working conditions lead to injuries. This is particularly true at small and mid-sized businesses who lack safety programs to begin with and whose occupational hazards are well known.
"Where there is no vision, the people perish"-Proverbs 29:18.

As a young group rep at UNUM I sold hundreds of group life and disability policies to small and mid-sized employers. Normally, smaller employers became interested in Disability and life coverage after a catastrophic accident, sickness or disability effected one of their employees or family members. People get religion quickly when they see someone they care about struggling financially due to a death or disability. As my career progressed and my market changed to the Fortune 1000 what quickly became apparent was that many larger employers paid little attention to their safety culture or their AD&D and LTD plans until a catastrophic event or an ugly LTD renewal focused attention on the root cause which for many industrial employers frequently was a sick safety culture.
Many larger employers may not be as well covered as they think if their Group Accident and Life Policies have not been scrutinized by a professional with expertise at isolating exposures and re-underwriting their policies to eliminate risk.

On 9-11 I happened to be in the home office for one of the largest writers of accident insurance coverage in the world where I managed at the time. As the news showed the planes crashing my company insured the airlines involved. One of my friends and co-workers, Paul, saw a plane fly into the the world trade center where one of his accounts had 4000 employees and he also had numerous friends, neighbors and customers. The companies with sound safety procedures had many employees get out in part due to the planning, vision and in some cases the heroism of safety professionals. The world trade center was not an industrial location so certainly white collar firms are in need of a safety vision and culture as well particularly where employees are concentrated. 9-11 changed the catastrophic risk markets forever.

BP may discover shortly the penalty for poor risk management is bankruptcy. http://www.youtube.com/watch?v=2AAa0gd7ClM

Steve Wynn On Healthcare & Washington

Don't miss what billionaire Steve Wynn has to say about Health Care Reform as well as the current state of uncertainty in America and its inherent effect on business. I must reprint it and give you the link as it was on CNBC so otherwise no one would know.

“No one has any idea what’s next…the uncertainty of the business climate in America is frightening, frightening to everybody, and it’s delaying the recovery.”
...He’s even more passionate about where this country is headed.
Wynn speaks of “wild, uncontrolled spending,” and “unbelievable, unsustainable debt”. As he plans to split his company headquarters between Las Vegas and Macau, with a bigger emphasis on Macau because of its tremendous profitability, he has no qualms about dealing with the Chinese government. “Macau has been steady. The shocking, unexpected government is the one in Washington.”
He’s concerned about the prospect of inflation, of FHA repeating the mistakes of Fannie and Freddie, and the cost to business from the new healthcare law. “We’re on our way to Greece, in the hands of a confused, foolish government,” Wynn says. “It’s got to stop. It’s got to stop.”

Happy Memorial Day

To all who have served please accept my sincere thanks.

Employee Questions Can Be Interesting

Just got the email below from a client and noted my reply below which made them laugh.

Client-I have an employee who wants to know if she is able to add her son onto her BCBS medical coverage. Her son just got out of jail and is now living with her. Does this count as a qualifying event?

TheGroupGuy-Getting out of jail may be an important day but it is not a qualifying event in the eyes of the IRS.

For The Record

Here was one participant at a Texas Tea Party Yesterday

The Price of Unfunded Mandates to Texas of Obamacare

From the Speaker of The Texas House of Representatives Joe Straus in todays Houston Comical Opinion;

Many Texans may not realize how dramatically the new law expands the state's Medicaid program, which currently provides health care coverage for the very poor, as well as low-income children, aged and disabled persons. It mandates that every legal resident of Texas must purchase private health insurance or be enrolled in the Medicaid program, resulting in a projected increase of more than two million Texas Medicaid recipients.

Our State Health and Human Services Commission estimates the new mandates will cost the Texas state budget $27 billion over the 10-year period from 2014-2024, or an average of more than $5 billion for every two-year Texas budget cycle. That dramatic increase in health care costs will significantly limit legislative discretion in virtually every other area of state spending. Historically, the Texas Legislature has made education our top funding priority. Today, more than 60 percent of our state's general revenue goes to public and higher education. Health and human service spending is the second largest expenditure, at 30 percent, with all other costs a much smaller piece of the total pie. As the new federal law forces Texas to spend multiple billions more each biennium on health care, that will continually shrink our state's ability to spend discretionary dollars elsewhere, including our top priority of education.

Get ready for increased property taxes, a state income tax and higher sales taxes.

Stormclouds Over Massachusetts

MASSACHUSETTS' SHORT-TERM CUSTOMERS BOOSTING HEALTH COSTS




Will consumers game Obamacare the way they have in Massachusetts?...



BOSTON GLOBE



THE MASSACHUSETTS INSURANCE BLACKOUT



Mass. Gov. Deval Patrick (D) has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs), say observers...

Pelosium Discovered

A major research institution has just announced the discovery of the densest element yet known to science. The new element has been named Pelosium.

Pelosium has one neutron, 12 assistant neutrons, 75 deputy neutrons, and 224 assistant deputy neutrons, giving it an atomic mass of 311. These particles are held together by dark forces called morons, which are surrounded by vast quantities of lepton-like particles called peons. The symbol of Pelosium is PU. Pelosium's mass actually increases over time, as morons randomly interact with various elements in the atmosphere and become assistant deputy neutrons within the Pelosium molecule, leading to the formation of isodopes. This characteristic of moron-promotion leads some scientists to believe that Pelosium is formed whenever morons reach a certain quantity in concentration. This hypothetical quantity is referred to as Critical Morass. When catalyzed with money, Pelosium activates CNNadnausium, an element that radiates orders of magnitude more energy, albeit as incoherent noise, since it has half as many peons but twice as many morons as Pelosium.

History Repeats

It's De'ja' vu really. Consider that we have Charlie Rangel stepping down this week "temporarily" for violating House rules amidst an ethical cloud at the same time the final push for Obamacare is occuring. Flash back to the 1980's and recall former House Ways & Means Chairman Dan Rostenkowski. The Tax Reform Act of 1986 was passed and contained a wildly unpopular provision called Section 89. Ultimately, Section 89 was repealed. Dan Rostenkowski was convicted, although he did receive a pardon from President Clinton. Employers and The US Chamber of Commerce won the battlefield because govern mandated social engineering solutions like section 89 reduce freedom and introduce complex Federal rules that are in fact thinly disquised measures intended to extract more revenue based on perceived inherent unfairness. Which brings us to Obamacare and Mitch McConnell's prophecy. My what poor students of history compose todays majority.

Doc Fix Does Not Happen

Today reimbursement rates from Medicare to Providers decline 21.2% as Congress has failed to implement the "Doc Fix". Many seniors will learn their doctor is not accepting new Medicare patients.

The Death Spiral

There has been a great deal of media attention paid to President Obama's attacks on rate increases for individual health care increases that are unreasonable given the company's overall profit level. Wellpoint the parent company of Anthem in California was singled out.

Savvy insurance professionals are familiar with the concept of the death spiral, which occurs when good risks leave the risk pool leaving only poor risks, leading to higher premiums, leading to more attrition from good risks, until the pool is drained. The concept of a death spiral is evidently foreign to former Kansas Insurance Commissioner Katherine Sebelius who is now Secretary of Health and Human Services. The death spiral is what is happening at Anthem according to an AP story by Tom Murphy;

The federal inquiry was launched earlier this week after the premium increase planned for some customers who buy individual policies from WellPoint's Anthem Blue Cross subsidiary was widely publicized.

Congress also has asked for information on the increases and requested testimony from WellPoint CEO Angela Braly at a Feb. 24 hearing.
"When the healthy leave and the sick stay, that is going to dramatically drive up costs," WellPoint executive Brian Sassi said in an interview with The Associated Press.
Sassi is president of the consumer business unit for WellPoint, the largest publicly traded health insurer based on membership. WellPoint runs Blue Cross and Blue Shield plans in 14 states and Unicare plans in several others.
Sebelius had called the increases "extraordinary" and told the insurer in a letter she was disturbed to learn about them. She also has demanded that the insurer answer questions about how much of a profit it will make from the hike.
Sassi said in the letter to Sebelius that the Anthem Blue Cross unit at the heart of the inquiry lost millions in 2009. He declined to offer specifics in an interview.
The executive said Anthem Blue Cross set some of its prices, or premiums, too low last year for the claims it received. It set 2010 prices based on what it thinks future prices will be.
"We need to make sure that our premiums cover the cost of claims," he said.

Hat tip to Curt Langley who tweeted a summary from The Baker Institutes Health economics fellow Vivian Ho: "Affordable insurance is dying in a death spiral." http://bit.ly/cGaCVW . Ms. Ho got it exactly right yet somehow our President and his Secretary of Health and Human Services cannot seem to admit health insurance businesses have the right to be profitable across both individual and group segments without facing scrutiny. Or are we simply witnessing more arrogant political posturing? Call me a cynic but my moneys on the latter. At the end of the day when the pool is drained at Anthem there will remain only a few turds no one can afford to get in the water with due to the cost.

It is ironic that nowhere in our media is it being reported that Obamacare as it will be presented at this weeks Healthcare summit will result in an average increase in premiums of 26% as individuals who have purchased catastrophic health policies on their own will see their premiums rise as the government  requires their policies include mandated benefits that will explode their premiums. Where is the hearing on that?

Paint It Black

Here is an interesting view of unemployment figures by county in the US over the past 3 years. Note that the color black is unemployment over 10% and purple is 7%-9.9% and 2009 appears to be the onset of a blackout in way too many counties while many are bruised in purple and trending to black.

As the "Healthcare Summit" approaches Thursday and threats of reconciliation loom it might help congressional leaders to note that Americans without jobs question the wisdom of focusing so much time on health care reform when the economy is in the toilet.

Look at all the red states turning black and purple. When my kids where little I would play Mick Jagger singing You Can't Always Get What You Want. The would ask for something and I would inquire, what does Mick Jagger say? To the majority party as you watch your red states turn black I would point you to Micks lyrics from Paint It Black below

Maybe then I'll fade away and not have to face the facts.
Its not easy facing up when your whole world is black.

Politicians better start facing facts before they face the voters in November or their seats will be fading away.

Bye, Bye Obamacare

http://www.youtube.com/watch?v=bpevc2t_Frw

Can You Hear Me Now?

Turns out Health Care Reform opposition was the single biggest factor in voting for Brown according to exit polls.

Fifty-two percent of Bay State voters who were surveyed as the polls closed said they opposed the federal health care reform measure and 42 percent said they cast their ballot to help stop President Obama from passing his chief domestic initiative.
"I'm not surprised it was the top issue, but I was surprised by how overwhelming an issue it was. It became a focal point for the frustration that has been brewing with voters, and it's a very personal issue that affects everyone," said Tony Fabrizio of Fabrizio, McLaughlin & Associates, a Republican firm that conducted the exit poll of 800 voters.







Read more: http://www.politico.com/news/stories/0110/31708.html#ixzz0dAUbn8fx

Happy New Year

I must admit I have always been fascinated with politics and as a student of political cleavage I found the results of a recent poll on the Brown vs Coakley special election for Ted Kennedy's US Senate seat absolutely fascinating. Why? Well let's just say in a state where Democratic voters outnumber Republicans by a 3-1 majority recent polls now show Brown with a 4 percent lead.

In the race for U.S. Senate, who will you vote for?
Scott Brown: 50%
Martha Coakley: 46%
Joseph L. Kennedy: 3%
Undecided: 1%
In your opinion, who won the debates?
Scott Brown: 41%
Martha Coakley: 25%

Joseph L. Kennedy: 2%

Undecided: 31%

As a U.S. Senator, do you think Martha Coakley will be an independent voice or tow the Democratic Party line?
Independent voice: 24%
Tow the party line: 64%
Undecided: 11%
Do you support the proposed national near universal healthcare law?
Yes: 36%
No: 51%
Undecided: 13%
Can the federal government afford the proposed national healthcare law?
Yes: 32%
No: 61%
Undecided: 7%
What is the most important issue facing our next U.S. Senator?
Healthcare: 38%
Economy/Jobs: 44%
Taxes: 1%
War: 5%
Education: 0%
Spending/Budget: 3%
National Security/Terrorism: 1%
Other: 4%
Don’t know: 4%

Less anyone think of me as a Fox News robot check out what CBS has to say on the matter.
When 64% of the voters think you will toe the pary line and 61% think he nation cannot afford the proposed legislation you still have a problem even with a 3-1 party advantage. That Ted Kennedy's staffers essentially composed the legislation is poetic justice.