Two Kinds of Long-Term Care Policies? Yes, Cash Model and Indemnity

While most people know that there are two basic forms of life insurance (term and whole life), they do not realize that long-term care insurance also has two basic forms, ie cash model and indemnity model.

It is hard enough to sort through the variables of setting up a long-term care plan. You have to select a coverage period, how much a month you think you might need for a nursing home, whether to include home health, whether to include an inflation protection rider.

First, the Cash Model: Once the policy-holder qualifies to become claim eligible, the insurer will mail out a check each month for the full amount of the monthly benefit. This money is his or hers to spend as they see fit to cover their bills. The cash model does not require the use of licensed care for the insured to be covered. The insured has complete freedom of choice of providers to tend to their needs. He can even buy a lift-equipped van if that what is needed to maintain independence.

These cash payments are tax-free up to $98,550 in 2008. It is an ideal plan for the insured, because he will know exactly how much money is coming in each month, and gives such complete freedom of choice in how one can spend it. Any excess funds can be stashed away in savings or investments for such time as the LTC policy coverage period expires. And if the insured does pass away, those funds will be in their accounts to cover any debts and be passed along to their estate's beneficiaries.

The second type is the Indemnity Model, which is what most of us have been exposed to. This model requires that in order for benefits to be paid, they must be performed by a licensed caregiver AND for eligible expenses. The insured typically has to receive at least one hour of licensed care per day to remain covered by the policy.

The insured under this plan has a daily amount allotted to him; at the end of the month, the insurer totals up the days in which the insured received at least one hour of care, multiplies by the daily coverage amount, and then issues the check to the insured.

Now think about this. This means that the insured could potentially receive wild variations in the level of benefits under this format. True, they are tied to actual services received. But the insured may have a real need for some type of adaptive equipment in the home so that they can remain in their own homes. This equipment is normally going to have a monthly bill no matter whether the insured has a lot of home visits or not – and MAY NOT be covered under your policy. That means the insured is paying out of his own pocket for whatever is needed to maintain independence.

The indemnity policy is generally 40-60 percent less expensive than the cash model, and I hope you readers can see why. People are scared of the cost of a LTC plan as it is, so insurers just show this model to their prospective clients. Your agent may not even be trained in the cash model plan because so few people know enough to ask for it.

You are wiser to save money by cutting down the coverage period rather than by going to the indemnity plan. Industry studies show that most long-term care plans have a claim history of only 2 to 3 years. And yet many clients select the lifetime option because they are terrified of outliving their money. This is one case where fear is costing people thousands of dollars in premiums unnecessarily.

I should also add that in case you do not qualify for coverage under a long term plan (in other words, you are rejected by their underwriting department), you still have other options. Many life insurance policies now have an accelerated benefits provision, where you can draw upon the value of your life insurance plan to pay your nursing home or other end-of-life expenses.

I hope this information is of benefit to you in planning your insurance coverages.

[Disclaimer: This article is not intended to sell the reader anything. But you must still consult with a financial planner (preferably certified) or your local insurance representatives to find a policy that fits your needs.]

What features should you look for in a Long-Term Care insurance policy?

You have finally decided to bite the bullet and check around for a long-term care policy for yourself or a loved one. But where do you begin? What features should be included in a plan?

You do not have to re-invent the wheel when seeking a LTC policy. The folks at the National Association of Insurance Commissioners (NAIC, found online at NAIC.org) have kindly provided a mini checklist for your benefit. The list includes:

• 
  At least one year of nursing home or custodial care, and should also include intermediate care.
  You probably want home health care included, too. Home health should not be limited to skilled care (meaning a registered nurse). You will probably need to call in unskilled help to assist with household chores, to help bathe and feed your loved one, or any of the myriad things that need to be done.
• 
  Coverage for Alzheimer's disease, if the policyholder develops the illness after the policy is issued.
• 
  Inflation protection option. No one knows just how expensive it will be ten years from now to keep someone in a decent nursing home; prices have risen sharply over the past ten years for all health care. It will cost you more to have this rider or option.
  The insurance carrier is obligated to provide you with a free copy of the “long-term care insurance shopper's guide”. They prefer to hand this out after you have signed on the dotted line for an application, but you are NOT obligated to buy or express an interest in buying, in order to get this booklet.
• 
  A guarantee that the policy cannot be canceled, nonrenewed, or otherwise terminated because you get older or develop a chronic illness/serious disease.
• 
  You have the right to a 30-day period – known as a 'free look' – in which to examine the policy and return it if it does not seem to be what you wanted. The insurer will return your check. This is a standard provision, not a gift from each insurer, but do mention it anyway.
• 
  There should not be any requirement such as the following: that the policyholder first be hospitalized before admission to a nursing home in order to be covered; that the policyholder first receive skilled nursing home care before entering an intermediate or custodial nursing home; or that the policyholder first receive nursing home care before receiving benefits for home health care. Why are these important? Because most people prefer to keep a loved one at home for as long as possible before finally transferring him or her into a nursing home. These provisions we have listed all are intended to keep someone in a healthcare facility of some kind rather than at home.
• 
  In addition, you might see a 'waiver of premium' rider. This allows you to stop paying premiums during the time you are receiving benefits. Read closely to find what restrictions there are on this rider. Commonly, you will have to be in a nursing home for 90 days before the waiver goes into effect.
• 
  Pre-existing conditions. Insurers usually say in the policy that pre-existing conditions are excluded for 6 months or a year. However, often they will simply not write a policy for someone with certain diagnoses. For example, I once tried to get a long-term care policy for a lady who was 72, in great shape – but underwriting turned her down because she had diabetes. Even though her condition was controlled and her weight was in the normal range, they felt her disease was progressing enough so that they did not want the risk. Also, some diseases may be quite common in your state and some insurers will not cover it. In Minnesota, multiple sclerosis is quite common (statistically speaking) and so it is excluded from dread disease policies. (In other words, if you have a family history of this disease, move to another state if you want to buy a dread disease policy.)
• 
  What exclusions are in the policy? It is common that injuries or illnesses that result from self-inflicted causes are excluded. But you may be surprised that those who have a history of drug or alcohol abuse will also be excluded from coverage if their condition is deemed related to that history. (Example: liver disease, brain damage from a drug overdose, etc.)
• 
  Possible return of premium. Some policies allow you to get a healthy refund of premiums paid if you do not use the insurance provisions or decide to cancel. You will not get 100 percent of your premiums back. You will however pay more for this rider. Why would you want this rider? If at some point you can no longer afford the premiums, or some other option opens up for you that will replace the coverages of this policy, you could decide to cash it in, so to speak, and use the cash to buy into another coverage.

People generally buy far too much long-term care insurance. From the statistics that I have seen, most people only spend one, two, or three years in a nursing home. And yet people are terrified of the possible expenses of spending twenty years in such a facility.

Although I personally know of a classmate's father, an Alzheimer's patient, spending six years in a nice facility, he was not the norm. He was a big, strong guy before he came down with the disease, and he died as result of complications of pneumonia.

On the other hand, my own grandmother only spent about six months in a skilled care facility before she died. But you have to play the odds here, the reasonable odds. And most likely, three years of nursing home care is all that one can reasonably be expected to afford premiums for.

My other recommendation, as a past professional in the area of senior products, is that IF you cannot get a long-term care policy due to health history or whatever, then increase your life insurance coverage to the most you can reasonably afford. Most life insurance policies are 1) cheaper than LTC policies, 2) easier to get than a LTC policy, and 3) have acceleration of benefit provisions so that if you are diagnosed with a terminal illness or have to go into a nursing home, you can draw upon the policy limits. At the very least, you can put up the life insurance policy as a form of collateral on the final bill from the nursing home.

SEE ALSO:
America's Health Insurance Plans (AHIP) – online at AHIP.org; they have an office in Washington, DC.
American Health Care Assn. -- 1201 I (as in Illinois) Street NW, Washington, DC 20005, 202-842-4444, or online at ahca.org.
National Assn. Of Insurance Commissioners (NAIC) – 2301 McGee Street, Suite 800, Kansas City, MO 64108, 816-842-3600, or online at NAIC.org.
National Council on the Aging – 300 D Street SW, Suite 801, Washington, DC 20024, 202-479-1200, or online at NCOA.org.
Area Agency on Aging – 1-800-677-1116 to find a local office.

Take a Load Off Your Mind With Advance Directives for Medical Care

Have you still not done anything about formalizing an Advance Directive for your medical care? Thousands of people rushed to do it when the Terry Schiavo case mesmerized the nation. But now some years have passed, and we need another reminder to get it done.

This article is prompted by a very nice column by a former LPN, who goes by the name Kyana Belle in her column, urging people to create an Advance Directive for their care. She had brief stories to tell of the nightmarish, ugly situations that could have been averted with some well-thought-out planning ahead.

I might add that hospital staff is obligated to make available to you whatever forms are needed to create this Advance Directive. It need not cost you a thing unless you need to consult an attorney if you have multiple marriages, multiple families from those marriages, or no current spouse.

Kyana explains what a Do Not Resuscitate order really means, and explains the difference between that and a Living Will, plus she provides links for all you need. She has just three basic points to make:

1) A "Do Not Resuscitate," "DNR,"or "No Code" is ONLY an order that prevents attempts to restart your breathing and/or heart beat should either cease.

2) If you have not legally appointed someone to make decisions for you when you are unable to do so yourself, someone will be appointed for you according to your state laws.

3) It can NOT wait - get it done now!

Thank you Kyana! You rock! Readers may find the entire article here at: http://kyanabelle.newsvine.com/_news/2008/11/06/2080706-how-to-protect-your-rights-with-advance-directives?email=html&threadId=412008&commentId=4007241#c4007241 .

In Honor of the Upcoming Veterans Day – How To Make Claims on Your Military Life Insurance

In honor of Veterans Day this year, I want to help the families of military veterans get their proper benefit checks for life insurance policies held by service persons. IF you have kept up your military group life insurance policy during service (if still in uniform) or after discharge, you (or rather your beneficiaries) should be able to get the VA to accept your claim. Just read this article and go to the link given below to find the claim form.

Several years ago a scandal broke out about the Veterans Administration denying all phone inquiries inre making claims on veterans group life insurance policies. It seemed that the staff was using the funds to pay for department parties and other nonsense.

I was also surprised to hear of one widow of a WWII veteran making a successful claim on her late husband's policy not long before this scandal broke out (about ten years ago). Fortunately for her, she had an adult child who sent in a request for a claim form instead of just accepting the erroneous information that had been received by phone. The veteran had kept policy status updates on file, and so they had a policy number and an address to send the request to.

So to make a long story short, they received the claim form – a mere half-page long – and filled in the necessary information. The only difficult section asked for the veteran's discharge date, an item they luckily had on the discharge papers.

Do you want to guess how much money the widow wound up with? The policy had been paid up some time before and was accruing interest. The final valuation was for over $6200. That was a very welcome hunk of change to help make up for the loss of her husband's pension check from work.

Below is the link to the VA insurance page. There are several forms available but to make a claim, click on the one that says: SGLV 8283, Claim for Death Benefits. There is also a related form to make claims for the death of a spouse (or other covered family member) of a military service person.
http://www.insurance.va.gov/sgliSite/forms/forms.htm

It does not matter how long ago your military service person or veteran died; the policy still accrues value until the claim is made. Just dig up your insurance policy and discharge papers, and you will have enough information to fill out the claim form.

Good luck to all of you, and thank you to all our United States veterans out there (and their families). Have a good day.

[The erroneous information given by phone was possibly a mixup; the VA continually has to deny inquiries about a mythical veterans insurance dividend payout. You can read a full article explaining that confusing urban myth at http://urbanlegends.about.com/library/weekly/aa050698.htm .]

Wall Street Journal Has Story on Fighting Insurance Denials

Pushing Back When Insurers Deny Coverage for Treatment --
By Anna Wilde Mathews, The Wall Street Journal
http://www.marketwatch.com/News/Story/Story.aspx?guid=b6e08398424d449bb8ac46fc3c8a2565&siteid=nwtpf&sguid=LlOmLCZmMkSOlLZa0_8Pmw
Battling a health insurer when it refuses to cover certain treatments can be aggravating and time-consuming. But if you choose to join the growing number of people who are appealing coverage denials, there are several strategies that can bolster your case.

State, insurers, doctors in battle over billing

-- from the Ventura County Star, Sept. 12, 2008
A person injured in a car crash is treated in the emergency room. The insurance company pays the out-of-network doctors involved in the care less than they think they're owed.
So a doctor or the hospital sends a bill for the remainder directly to the patient।

It's called "balance billing" and has spawned a turf battle among state officials who are trying to outlaw the practice, insurers who support the ban and doctors who fight it and see themselves as victims।

"Legislate, regulate and litigate। We'll do whatever it takes," said California Medical Association President Richard Frankenstein, before a meeting with Ventura County doctors this week. He laid responsibility for balance billing on insurers trying to protect their profits by underpaying doctors.

"It's a very clever ploy of multimillion-dollar companies to avoid their responsibilities," he said.
But some patient advocates say there's enough blame to share। They say the fight over compensation for emergency care ends up wounding patients who worry that if they don't pay the doctor's bill, their account will end up with a collection agency.

"We're caught between these two institutional providers," said Beth Capell, an advocate with Health Access California. "It's a temptation to say a plague on both your houses."
Many of the problems occur in emergency rooms where neither patients nor doctors control who they see। People may be treated by providers who don't contract with their insurance company. The doctors are paid a lesser, out-of-network rate.

According to the California Association of Health Plans, 1।76 million Californians who went to emergency rooms over a two-year period were billed by doctors or hospitals for money not paid by insurers.

The total bill was about $528 million.
The California Department of Managed Health Care plans to roll out a regulation next month that labels balance billing for emergency care as an unfair practice, opening the door to enforcement action against doctors or hospitals।

A bill by Sen। Don Perata, D-Oakland, would ban ER doctors from balance billing and would set up a process to mediate insurance disputes as well as an interim rate of payment. The bill was approved by the Legislature two weeks ago and awaits Gov. Arnold Schwarzenegger's signature. It would supersede the managed care regulation.

The doctors' association will sue the day after the state implements its new rules, said Frankenstein, in Camarillo for a meeting of the Ventura County Medical Association. The state group also opposes Perata's bill, though a group of emergency physicians supports the measure.
Frankenstein said insurance companies need to expand their networks to include more emergency room and on-call doctors। They also need to pay more, he said.

"It's up to the health plan to either serve up the doctor or pay the bill," Frankenstein said, suggesting insurers maximize profit by saying, "This is what we feel like paying today."
Nicole Kasabian Evans of the California Association of Health Plans fired back।

"Health plans are not the ones that are sending the bill to the consumer," she said। "We don't think it's appropriate strategy to hold patients hostage."

Evans said the insurance group supports a ban on balance billing and an independent process to deal with disputes with doctors। But the group opposes Perata's bill because the rate of payment may be too high. Doctors who currently contract with insurance companies might drop out to get the out-of-network rate, she said.

Eliminating balance billing is great if it comes with reform that transforms the healthcare system and provides insurance coverage to everyone, said Jim Lott, executive vice president of the Hospital Association of Southern California। But hospitals aren't happy about measures that eliminate the bills but not the underlying causes, he said.

"Balance billing is a tool hospitals use to force health plans into negotiating fair rates," he said. "Consumers need to know. If their health plan is screwing up, they need to know that."
Patients shouldn't be seen as a tool, said Cindy Ehnes, director of the state Department of Managed Health Care।

"It's inappropriate to put a vulnerable, potential sick patient in the middle of a billing dispute just to provide leverage," said Ehnes, calling on doctors to take their disputes to her department.
Local doctors say balance billing isn't about getting rich but about staying in business। Some predict that eliminating the mechanism will amplify other healthcare problems such as getting doctors to serve on call.

"I think that will be the death knell to taking call in the emergency room," said Dr। Mark Ghilarducci of Oxnard.

Jerry Flanagan of the Consumer Watchdog group in Santa Monica feels sympathy for doctors who can't break what he called the stranglehold of insurance। But he also blames the medical association for holding up years of efforts to end balance billing.

"As sympathetic as we are for the physician, we think there is no excuse for billing the patient because of disputes between the doctor and the insurance company," he said। Referring to strategies that would solve the problem, he said: "That's what we've been waiting five years for."

Ventura County Star, Sept. 12, 2008, http://www.venturacountystar.com/news/2008/sep/12/state-insurers-doctors-in-battle-over-balance/

Just try to find a primary care doc when on Medicare

[Read an interesting, developing discussion of the article here at http://minnieapolis.newsvine.com/_news/2008/09/13/1863658-where-have-all-the-doctors-gone-just-try-to-find-a-primary-care-doc-when-on-medicare?last=1221363391#last_1 ]

He needed a neurologist. But nobody would see him unless we had a primary care doctor, and we couldn’t find one, Donna says. We pounded the phones day after day, going through the whole list [of primary care doctors] in Salem. But everyone who accepted new patients would not accept people on Medicare. The Brys’ experience is not an isolated case. At least 56 million Americans, almost one in five of the population, are now medically disenfranchised —having inadequate access to primary care physicians because of shortages in their area—according to Access Denied, a county-by-county study by the National Assn. of Community Health Centers and the Robert Graham Center.---
[read whole article at http://bulletin.aarp.org/yourhealth/caregiving/articles/where_have_all_the_doctors_gone_.html?NLC-WBLTR-CTRL&DET=F2-91208 ]

NEW Autism Center Opens in Minnetonka, MN But Insurance Limits Treatment

Great news on the autism front as a new treatment center opened in Minnetonka, MN with Governor Pawlenty doing the honors. The new ABA approach to treating autism has showm remarkable promise in a short time.
It is a very intensive therapy, however, with upwards of 40 hours a day of therapy. The insurance company – in this case the high-risk pool for Minnesotans – has capped coverage at 40 hours a week. The children receive more than that, so providers are forced to limit treatment.
ABA is an acronym for Applied Behavioral Analysis, a new technique that has been remarkably successful in turning non-verbal youngsters into normal expressive children who can express their wants and needs.
From a story in WCCO.com on Aug. 20 --
On Tuesday, Gov. Tim Pawlenty appeared at the Grand Opening of the Minnesota Autism Center's new facility in Minnetonka. The center focuses on applied behavioral analysis, or ABA therapy, in which children with autism work intensively with therapists on speech, language and daily living skills. "This center is a modern, capable, wonderful place that's going to provide these services and provide hope and improvement in the lives of these families and the children it serves," said Pawlenty. However, the governor's appearance comes as some parents are questioning the likelihood their insurance will continue to cover as much ABA as their children need. For Amy Dawson, the value of the ABA therapy her son Mac receives is without question. "He was non-verbal a year ago and now he scores in the gifted range for spoken vocabulary," said Dawson. [http://wcco.com/local/ABA.therapy.insurance.2.799665.html]
The Cambridge Center has an excellent source of information about the ABA approach to autism and explains what Applied Behavioral Analysis is. See this link for more information about it. [http://www.behavior.org/autism/]

Maybe a French-style National Healthcare System Might Be More Compatible With Ours?

A proposal for a Canada-style healthcare system has been floundering around our Congress for several months, (Rep. John Conyers National Health Insurance Act --HR 676) but shouldn’t we ask if a French-style system might be a less disruptive solution?
Let me compare the Canadian and French systems briefly --

Canada has a SINGLE-PAYER system, in which the government pays the bills according to a fee structure it negotiated with health care providers. Patients can still choose their own doctor. The doctor in turn may be either paid by the government or in private practice. (Patients who are in a hurry might choose a private-pay doctor; the government physicians are often overworked and months-long delays to get an appointment are common.) The United States’ Medicaid and Medicare are most similar to single-payer systems.

By contrast, in the British style of socialized medicine, the doctors are actually government employees. Hospitals are run by the government. Hospitals are run comparable to the Veterans Administration. Given the repeated VA scandals in healthcare and hospital conditions, one would much prefer any private hospital over the VA. This is a sad thing to say, although to be fair, the VA facilities are just showing their age and need a great deal of renovation.

The French system is called a non-profit MULTI-PAYER. Clinics and hospitals are all private, and may be either non-profit or for profit. Medical providers are paid according to a negotiated fee structure. The funds come from payroll contributions from both employers and employees.

This is somewhat similar to what we have now in the private sector. A major difference is that the French government has far better leverage in negotiating what the fees are than any single employer has, and unlike the U.S. federal government, it uses that leverage.
French payroll taxes replenish a sickness fund which covers 75% of the medical bills. The balance comes from patients, government and supplementary insurance.

Coverage is universal under all three templates -- British, Canadian, and French. By contrast, the current American system has nearly 50 million of us completely uninsured -- 9 million of the uninsured are children.

The patient has the ultimate power to choose his or her doctor under all three plans displayed here. Popular American plans commonly limits our choice of providers to those who are part of a given network.

The average cost of medical care per Briton is $2,389, and the average Briton ranks 24th on WHO‘s health ranking. For a Canadian it is $2,989, and he ranks 35th. For a Frenchman it comes to $2,902, who marches all the way up to 4th on WHO‘s list. And for an American, it comes to a whopping $5,711, and in return for that, he places 72nd on WHO’s ranking.

Recent years have seen several so-called reforms, with limited results. In 2004, consumers were given the option to create Health Savings Accounts. These allow pre-tax dollars to be set aside for any medical or health expense not reimbursed by insurance. The downsides: they require more paper handling by both consumers and insurance companies, and some discourage preventive care.

States such as Massachusetts have moved to require insurance coverage, with a government subsidy to those who cannot afford it. While it does not result in universal coverage, it has cut the numbers of uninsured by nearly two-thirds.

When you add up all the co-pays, premiums, deductibles, etc., even those with insurance often pay the full cost of the medical care. There is little downward pressure on medical expenses.
Allowing the poor to buy into Medicaid, Medicare, or SCHIP has become controversial even tho it seems very direct and logical. This proposal came from a plan studied by the National Coalition on Healthcare. Consumers pay in according to a sliding scale, with subsidies for the poor.

Everyone gets covered. The monetary savings can be significant. NCHC says in the first decade health care savings would total $320.5 billion; businesses that now provide health insurance would save $848 billion, and families who currently buy insurance would save $309 billion.

Since the end of the 1960s, the number of doctors in France increased from 60,000 to more than 185,000 at the beginning of the 21st century. There are three doctors for every 1,000 habitants, which is a superior ratio when compared to other Western nations (Great Britain 3:1800, USA 3:2700, Germany 3:3400 and Italy 3:5900).

A sector of the French healthcare system consists of not-for-profit private hospitals. Private hospitals were originally denominational and provide 14% of the inpatient services among French Medical Care Institutions. They are financed through endowments like public hospitals, but they still have the right to privacy like private clinics.

A positive feature of the French healthcare system is the cooperation between the public and private sector. The long waiting lists for surgery that everyone associates with socialized medicine are avoided here. Indeed, private medical care in France provides more than 50% of surgeries.
Yes Magazine has an online chart - http://www.yesmagazine.org/article.asp?ID=1515
More specifics of the French plan is at FrenchEntree.com -- http://www.frenchentree.com/fe-health/DisplayArticle.asp?ID=197

CARRIERS OF CRITICAL ILLNESS INSURANCE POLICIES

NAME OF CO. NAME OF POLICY STATES AMT
AFLAC.com -- Specified Health Event -- All except MA NY VT WA; $5K 1st occurrence with other amts. for specific bills; only issue age restrictions; 10 question application
AIG.com -- Group Critical Illness -- All except CT MT NY VT WA; $10K and up; issue ages 18-64; terminates age 70; simplified underwriting
AIGebs.com -- AIG Group Critical Care Ins. -- All except CT MN NY WA -- amt varies; issue ages 18-69; terminates age 75;
ALLSTATEatWork.com -- New Lifeline Critical Illness -- All except CT MD NH NY VT WA; issue ages 18+ payroll only; three levels of underwriting depending on benefit level
CAICworkSite.com -- Critical Illness -- All except CO CT MN NH ND RI WA; issue ages 18-69; benefits levels $5 to $50K; benefits reduce age 70; three underwriting questions
Century Benefits (TodaysMedicare.com) -- Medicare Plans -- In CA CT FL ME MA NH NJ NY PA SC TN TX; issue ages 64 and up; no health restrictions
ColonialLife.com -- Critical Illness -- All except CT; issue ages 16-69; choice of $5K to $50K indemnity or lump sum; benefits reduce at age 75; underwriting depends on benefit level (2-7 questions)
CBL-Life.com -- Timber Ridge Series of Critical Illness Ins. Plans -- All except CT NY VT; issue ages 18-64; benefits $10K to $250K; no age restrictions; underwriting restrictions on history of cancer, heart disease, insulin dependent, diabetes.
CONSECO.com -- C. worksite Critical Illness -- All except CA CT FL GA ID IL MD MA MN MS NH NJ NY NC ND SD TN VT WA; issue ages 18-69; lump sum up to $70K; no coverage for pre-existing conditions first year of policy
EMCnationalLife.com -- Worksite Critical Illness 3.0 -- All except CT DE MD MA NH NJ NY PA VT; issue ages 18-65; lump sum; policy expires age 70; simplified issue
EquiLife.com -- Life Guard -- All except AK CA CT DE DC FL GA HI ID LA ME MD MA MN NH NJ NY PA RI SD VT VA WA WI; issue ages 20-70; lump sum; reduces at age 65; underwriting restrictions
FDL-Life.com -- Critical Illness -- All except CA CT GA ID IA KY MN NH NY SC WA; issue ages 20-90; one-time payment, $5K to $50K; benefits reduce age 70; health restrictions
GUARDIANlife.com -- Critical Illness -- In AL AK AZ AR CO DE DC GA IL IN IA KS KY MI MO NE NM OH OK OR PA RI SC TX WI WY; attained age rating; lump sum from $5K to $50K; benefit reductions with age; simplified underwriting
HARBORins.com -- Simplified Critical Illness -- All except CT MD NH NJ VA WA; issue ages 18-59; policy guaranteed to age 75;
HARBORins.com -- Simplified Critical Illness Plus -- All except FL MA MN NY VT; issue ages 18-69; lump sum; pre-existing conditions not covered in first year of policy
HEALTHplan.com -- Group and Indiv. Critical Illness -- All except CT MA NJ NY; issue ages 18-69 (may vary by state); benefits reduced age 70; health restrictions vary per state
HUMANA.com -- Critical Advantage -- In AL AZ AR CO DE DC GA HI IL IA KS LA MA MI MS MO ME NC OH OK RI SC TX VA WV WI WY; issue ages 18-69; lump sum up to $50K; one year waiting period for pre-existing conditions
SETTLEMENTS101.com -- Viatical Settlements or Life Settlements -- All States; any age; must have short life expectancy (24 months)
MetLife.com -- Critical Illness -- All except CT FL WA; groups of 1000 or more; all ages; lump sum $1K to $100K; NO age restrictions; underwriting varies by plan
MHN.com -- EAP and Managed Behavioral Healthcare -- groups of 50 or more; any age; no age or health restrictions
CRITICALillnessCoach.com -- Critical Illness Plus -- All States; issue ages 18-64; individual product requires underwriting but only 3 questions
TRANSAMERICAworksite.com -- Critical Assistance Plus -- All except CT FL GA IN MD MA MN MT NJ NY TN UT VT; issue age 18 and up; must be actively at work; one year waiting period for pre-existing condition
TRUSTMARKsolutions.com -- Critical Illness -- All except CT; groups of 100 or more; issue ages 18-70; lump sum on diagnosis; no benefit reduction with age
UNITEDamerican.com -- Health Guard -- All except CT KY MA MN MT NH NJ NY SD; issue ages 18-64; one-time lump sum on diagnosis $10K $20K $30K $40K or $50K; benefits halved at age 65; ONLY COVERS heart attack, stroke, TIA, Migraine, Vertebrobasilar ischemia, Cerebral Injury due to trauma or hypoxia, vascular disease affecting eye or optic nerve.
UNUM.com -- Specified Critical Illness -- All except CT; issue ages 17-69; full payout except for coronary bypass surgery and carcinoma in situ (skin cancer) which are paid at 25 percent; only 3 questions in application

Erosion in Savings Helped Create Larger Numbers of UNDERinsured; Critical Illness Insurance Expected to Grow as People Seek to Fill the Gaps

While the growth in the numbers of uninsured Americans continues to garner the headlines (and the attention of political pundits), the growth in numbers of underinsured has been very similar but unheralded.

Consider the case of the “typical” family with an individual deductible of $2600 and a family deductible of $4800 or more. How is a family that is struggling to keep up with jumps in costs for food and fuel going to cover that cost if serious illness hits a member of the family?
Those high deductible plans can be devastating to a family if a wage earner is hit with a catastrophic injury or illness. The general rule of thumb is that if your deductible is more than 5% of your annual income -- you are underinsured! And this is a conservative definition.

This means that the need for critical illness insurance policies is probably higher now than ever before. A good critical illness policy has a lump sum or cap payment of $100K or more, either on diagnosis or paid out as the bills come in. If they are good, they will even pay a moderate amount on experimental drugs. Conventional insurance will pay zero on experimental drugs -- but the critical illness insurance is a different class of product, not bound by the usual restrictions found in a qualified health insurance plan.

Critical illness policies vary on which diseases are covered -- less expensive policies cover only cancer; their underwriting guidelines are usually less demanding, too. Other policies may cover a dozen diagnoses like heart attack, stroke, kidney failure, and the like.

Another difference with critical illness policies is that the payment is normally sent directly to the insured, and the insured can spend it either on the medical bills or on anything from food and utilities on up to the mortgage.

Forty percent of Americans do not have three months’ worth of cash on hand to cover basic bills if they are out of work. (from a 2006 bankrate.com survey)

Medical bills in the first few months after a heart attack can reach $25,000 -- some of that is paid by major medical insurance but the patient has to shoulder the rest of the bill.

If you are between the ages of 35 and 50, and have a high deductible plan, you are the type of person who is most vulnerable to a large financial hit from a major medical event. And you are also most likely to HAVE a major medical event like a stroke or heart attack.

Even those with dual incomes totaling over $50,000 a year -- or even $75,000 a year -- report that they have difficulty paying for health insurance and their portion of the healthcare bill. They often do not have any (or sufficient) disability coverage to make up for lost income while recuperating. How many are aware that disability insurance, if you qualify, only pays an average of 60 percent of your normal income?

A soft economy also means that your employer may not keep your job open if you file for disability -- or even lay you off outright.

Health Care: The Time Is NOW To Get Healthcare Equity Bill Thru Congress

We need your help to get MORE Sponsors and MORE support for The Health Equity and Accountability Act. This important proposal (H.R. 3014) will deal with the disparities and discrimination in our nation's health care system. It is sponsored by Rep. Hilda Solis (D-Calif.). While the issue of America’s record numbers of uninsured is complex and has many causes, this bill is an important first step to ensuring that everyone has health care.
Action is needed now!
We know that minorities have higher rates of infant mortality, cardiovascular disease, diabetes, HIV infection/AIDS, cancer, and lower rates of immunizations and cancer screening. LEGAL immigrant children are denied health care! Millions of families in poor, rural communities have little or no health care at all.
We cannot write off millions of children and adults, in rural areas and cities, among the poor and working classes and sometimes even among people who thought they were middle class. They all need the basics, and here they cannot even get an appointment because the clinics and doctor offices will not accept patients without insurance.
Where did this bill come from? Rep. Hilda Solis (D-Calif.) has introduced the Health Equity and Accountability Act (H.R. 3014), a bill to provide health care to the underserved and uninsured. Versions of this bill have been stalled for the last 6 years, but H.R. 3014 is now gaining support with recent hearings in the Health subcommittees of both the House Ways and Means and House Energy and Commerce Committees.
Keep the momentum going! Contact your Representative and ask them to cosponsor this bill NOW. If they are already one of the 113 cosponsors, ask them to take a leadership role in promoting and passing this legislation. The higher the visibility and the larger the support for this bill in the House, the better chance we have for getting it passed, for getting an identical counterpart in the U.S. Senate and then getting the bill signed into law.
It isn't only high cost that keeps people from having health insurance and getting health care. We have reports that as many as 25% of all Latinas haven't even seen a doctor in the past year! Health care is almost unavailable in rural areas because of the shortage of rural doctors combined with the long distances to find medical services.
Do you know that poor areas are often targeted as “ideal” sites for dumping grounds for hazardous materials and waste? Minorities and those living in poor rural areas suffer exposure to environmental health hazards far out of proportion to their numbers. All too often, power plants and waste dumps are built in low income areas; they expect that residents are too ignorant and weak to protest these health hazards. Frankly my dear, your zip code should not determine your life expectancy!
The Solis bill provides grants to eliminate racial and ethnic health care disparities. It requires health-related programs of the Department of Health and Human Services (HHS) to collect basic data on race, ethnicity, and primary language. Imagine -- HHS does not even know for sure how many of us Americans are at home in which language!
This bill will also establish “health empowerment zone” programs in at-risk communities. Plus it includes Immigrant Health Improvement Act (ICHIA) proposals; these provide health care to legal resident children of immigrant parents (who have been denied coverage under the SCHIP program).
Contact your Representative TODAY and urge them to sponsor and support this bill! You can go to NOW.org and they have an easy link to a contact form that goes to your representative. You can also go to https://forms.house.gov/wyr/welcome.shtml for a contact form.

IRS Rule Changes Sweeten HSA Pot for Employers, Employees

Health savings accounts (HSAs) will likely prove even more popular than ever due to a sweetening of favorable tax treatments and more funding options.

Readers may want to check with their financial advisor about the new IRS guidelines that allow a transfer of individual retirement account (IRA) funds to an HSA; this transfer is tax-free. Second, employees are no longer subject to the 10 percent additional tax if they use their IRA funds to pay for medical benefits -- referring to IRC Sec. 72(t). Thirdly, qualified employees may contribute IRA funds to their HSA without tax.

Q: If I already have an HSA for myself and want to put some money into a high-deductible health plan (HDHP) for my family, can I do that?
A: Yes. If you have an HSA for yourself and you buy a family HDHPan HSA owner has a self-only high deductible health plan (HDHP) and buys a family HDHP, you can make that second transfer during the same taxable year. The fund distribution will still be without tax. One big advantage to doing this is that you will reduce your tax liability AND lower your health insurance premium. That is potentially, at least -- it will all still depend on your total financial picture and for that, you ought to go in to see your own financial advisor.

Fourth, the IRS also raised the ceiling for individuals and families to their HSAs for the 2009 tax year. Individuals will now be able to contribute up to $3,000 per year; families can contribute a maximum of $5,800 per year. (NOTE: The current maximum limit is $2,900 for individuals and $5,650 for families. The catch-up contribution for people who are 55 years old and up is increasing to $1000, from the current $900.)

The IRS released other new guidelines expected to boost the HSA market by further increasing employers’ adoption of HSA-linked consumer-driven health-care plans (CDHP).

Employers received much-clamored-for clarifying guidelines such as these (and employees will probably have to get the full details from your Employee Benefits department):

-- ON-SITE CLINICS that provide free or low-cost services will NOT affect an employees’ eligibility for an HSA. ALLOWED SERVICES INCLUDE: treating on-the-job injuries, immunizations, annual exams.

-- HOWEVER, if the clinic provides more significant medical benefits, you, the employee, are not eligible for an HSA. Example: a hospital permits its employees to receive medical treatment at its facilities for all of their medical needs for either no cost or at a reduced rate. (I and probably millions of you would probably give our eyeteeth to have such a generous employer.)

-- If an employer mistakenly contributes to your HSA, the employer is allowed to retrieve the funds by asking the financial institution holding the account (ie the bank or other seller) to return them. Otherwise, the employer may treat this amount as part of your income. (ie that means this could raise your IRS obligation; you are probably better off returning the money to the employer!)

A special note to HSA holders age 65 and up: You may use money in your HSA to cover Medicare Part D prescription drug PREMIUMS. If your spouse is older than 65 but you yourself are younger than 65, the enrollee’s HSA funds can NOT be used to cover your spouse’s Medicare Part D premiums without being part of your taxable income.

Hybrid financing is new and is expected fuel further growth in HSA accounts. Under this strategy, your employer pays ALL of an HDHP for you and your fellow workers AND gives each employee a defined cash allowance. Employees can decide how to use that cash.

Example: an employer provides a $2,000 deductible HDHP. You (employee) pay all costs under $2,000 while the insurance company covers EVERYTHING above that -- ie, your maximum out-of-pocket amount is $2,000 if you need surgery or pay a hospital bill – an amount similar to many traditional PPO plans. (Actually a lot of PPOs or indemnity policies may have limits of $2500, $3000, or even $5000. That may seem like a lot, but often that is the only way to keep the premiums down.)

Your monthly cash allowance of $125 (or $1,500 a year) also from your employer? You may choose to put that into your HSA, OR use it to buy a better health plan.

An unnamed small company in the communications sector used this hybrid financing strategy to walk away from a traditional insurer that quoted monthly premiums of $1800 per employee. It is no wonder that the employer switched to a high-deductible plan and an HSA, is it? This company is very generous and provides a $10,000 deductible for their employees plus the HSA, which is owned by the company.

Employees who had high medical expenses and depleted their HSAs, were reimbursed up to the deductible out of the HRA. This company pays a premium of only about $600 a month per employee (family coverage). The employees do pay toward the premium; the amount varies depending on whether it is a single or family plan.

It is hoped that the IRS changes will help both employers and employees contain the cost of healthcare. As an example, the above employer calculated that even if every employee got sick, the company would still save 18 percent compared to traditional healthcare insurance. And HSAs are much less likely to suffer annual hikes in premiums like those that plagued small businesses in the past decade.

Industry statistics show that HSAs grew by 73 percent from late 2006 to the beginning of 2008. The total dollar amounts in those HSAs also increased by 140 percent during the same time frame. It is a bit of a mystery why this popularity has not been evenly expressed across the country.

For example, a study showed that only 2.4 percent of residents enrolled in private health insurance in Missouri, 2.1 percent in Oklahoma, and 3.2 percent in Kansas have used HSAs.

Possible reasons that people are not switching to HSAs or other high-deductible plans: 1) they opt to stay with traditional, low-deductible healthcare plans, 2) the HSA is still pretty new, and perhaps they do not have anyone to familiarize them with it.

Should We Change How Much Medicare Pays for Treatment vs. Prevention? --i.e. should smoking cessation cost more than cancer treatment?

The writer of the HealthBeat blog, Maggie Mahar, writes a very good and sometime provocative journal on healthcare in America. However, while I do see the merits of her recent column on pricing of healthcare services, questions have to be asked regarding how changing the pricing schedule would affect insurers’ behavior.

I can well imagine insurers’ reluctance to fund open-ended smoking cessation treatment even tho it may ultimately cost them less than treating the complications of smoking. The fact is, they are much more nervous about UNKNOWN total costs than they are about KNOWN costs for cancer treatment. For example, they can calculate to the dollar what a given course of treatment for a lung cancer is; they know how many radiation treatments will be requested, they know if chemo will also be part of the treatment protocol and how many chemo treatments, they know how many days of hospitalization will be involved. What makes them really nervous, again, is an unknown dollar amount for something like smoking cessation -- which does not end till the patient can actually give up cigs for good, and who knows how long that will take?

Look, Maggie Mahar, I agree with you completely on the relative worth of preventive or wellness interventions vs. treating the disease. But I think you have a real selling job to get the insurers behind any such pricing system.

It’s worth having a full and public discussion on these issues, tho, so I hope that this is not the last we hear of this idea.

When Medicare first created a fee schedule, critics suggested that it was a Marxist invention. Nevertheless, the schedule, which lists what Medicare is willing to pay for some 7,000 procedures, has become the master list for physician reimbursement in our health care system: most private insurers peg their payments to the Medicare schedule.
The notion of deciding the precise worth of some 7,000 diagnostic and therapeutic procedures is mind-boggling. How exactly does Medicare do it?
The process began in the late 1980s when officials at the Department of Health and Human Services decided that the way Medicare paid doctors should be overhauled. At the time, Medicare was reimbursing physicians based on what was considered “customary, prevailing and reasonable” in a particular market —in other words the “market value” of the service in that region.
Instead, reformers urged Congress to begin paying doctors in a way that reflected the real cost, to the doctor, of providing the service.

Please see her full article on this valuable issue at http://www.healthbeatblog.org/2008/08/today-we-pay-fo.html#more

Coolest Way to Save on Business Cards, Letterheads, Rubber Stamps and Tons More!

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Please use this link to get a special introductory deal -- http://www.vistaprint.com/frf?frf=155732197131

Feel free to pass along that link to anyone who is has a business or is starting up a business, website, or is moving. And thanks for reading this.

Big emphasis on HSAs and high-deductible plans

Many employers want to take a more active role in enticing workers to form the habits and get the recommended screenings that can protect their long-term health. To encourage employees to stick with preventive-care maintenance medications such as drugs to control high blood pressure, next year Guardian hopes to be able to waive the copay on such drugs, Mansberg said.

A growing number of employers are embracing incentive programs that reward workers who take health risk assessments, attend onsite health fairs or participate in biometric screenings, where they're measured for height, weight, blood pressure and other health-risk indicators, she said. "The vendors we work with make the information available to your primary-care physician so [he or she is] kept in the loop of what's going on."

A break on premiums or a small cash incentive can persuade busy workers to make their health a priority, Mansberg said. "A lot of times people will take care of their kids but they don't take care of themselves the way they should. It's another way to make it top of mind."

Full story from Market Watch -- www.marketwatch.com/News/Story/Story.aspx?guid=38e267addf124ae18d6733a44a95895a&siteid=nwtpf&sguid=-ELWpQNc4kyEAAp-GHdHfQ

Some employers are dropping formal group insurance coverage completely or just sign up with administrative services like AdminiStaff. The advantage of these outside administrators is that it saves the company hours of processing time for check deductions, while allowing employees to pick and choose insurance plans that fit their needs.
Not selling you anything -- just acknowledging that there are other options out there that are catching on.

Taking Path of Travel Provision out of Disabled Americans Law Would Gut It

The current proposed changes to the Americans with Disabilities Act have several good points but some are strangely contradictory. The most glaring example of a proposed change that would effectively gut the whole law is the one about ‘path of travel’.

According to an advocacy group for the disabled, the Disability Rights Education and Defense Fund (DREDF), the Department of Justice proposal is that “if alterations are made to a public accommodation or public entity’s are of primary function, it does NOT have to bring the path of travel to that area into compliance” with the 2004 Americans with Disability law. In other words, if the local courthouse or library remodels the entrance, it will no longer matter if a disabled patron can get from the parking lot to the lobby? Is that what they really mean to say?

Because if there is no ramp for a wheelchair, or the door is no longer wide enough to admit a wheelchair, or if there is no longer an elevator, or no low buttons on the elevator, etc. etc. then there may as well be a Berlin Wall in front of that library or courthouse or other public facility.

We have come so far in terms of integrating disabled persons of many kinds into public and private buildings and businesses, places of work and play and recreation. I might add that while the numbers of long-term disabled is fairly steady, the ranks of short-term disabled could include any of us reading this story now.

Millions of Americans are “disabled” for a short term whether or not it is formally or informally recognized. Everyone who has broken a limb -- or had a stroke -- or a heart attack -- or any surgery -- has had to learn how to cope like a “disabled” person. They’ve had to try to carry on with normal activities like going to a grocery store, movie theatre, bank, or post office. You haven’t lived till you tried opening a jar of pickles with your left hand because the right one is in a cast.
The husband of friend had a heart transplant several years ago, and his wife said that they would get a few funny looks when they parked in the handicapped parking. Her husband’s disability was not visible, so onlookers assumed they were taking advantage of the parking space without cause.

I have had several experiences of taking my mom (post-stroke) or an aunt (multiple health problems) to the grocery store or doctor appointment and been glad that there were wide doorways, ramps, etc so that we could get from point A to point B without a hitch. Fortunately neither one lived in a fourth floor apartment without an elevator or I really would have been in a jam.

While I cannot speak about the specifics on whether a pool-lift needs to have foot-rests or not, I think I can say with some certainty that an American with Disabilities law REALLY needs a ‘path of travel’ provision.

[Please see a story about proposed changes to the ADA here at http://minnieapolis.newsvine.com/_news/2008/08/11/1740611-appalling-doj-proposals-would-weaken-disability-act-provisions?last=1218505510#dynamicCommentBox_2427716 and the webpage from the Disability Rights Education and Defense Fund (DREDF) with their discussion of the proposed rule changes here at http://www.dredf.org/DOJ_NPRM/ ]

Is there a “Right” to Medicare? Should 'Grandma' Pay for Her Own Cataract Surgery?

There has been quite a rumpus in articles about whether Medicare should refuse to pay for certain procedures due to the financial straits it once again is in.
In other words, do well-off seniors have the right to have Medicare pay for procedures that they could afford to pay out of pocket? And would this really help Medicare’s financial predicament anyway?

From someone called

the Happy Hospitalist believes that it is time to “say No” to seniors. “No to dialysis. No to life support. No to elective procedures [which would include artifical hips and knees] . No to brand name drugs. No to the latest expensive technology. We will have to place greater weight on quality of life over quantity of life. We will have to demand hospice care in futile situations. We will have to demand palliative comfort over slice and dice. We will have to reject marginally effective proceduralization and imaging of our elderly. We have to. We don’t have a choice. There is no other way.”

When I look at this list I agree on some items. “Futile care” is clearly unnecessary care. But often, we don’t know whether or not it will be futile. Every day elderly people do emerge from ICUs and go home to play with their grandchildren. As for “brand new drugs,” and “the latest expensive technology” regular readers know that I believe that everything depends on whether the new technologies have been tested and proven effective. We cannot afford to squander Medicare dollars on drugs, devices and procedures without knowing whether the patient will benefit. And I certainly prefer palliative care over “let’s try another surgery. Can’t do any harm.” (Except to the patient who suffers through it).

I agree with some measures but not others. Maybe all these joint replacements are unnecessary because we have been going about it all wrong. But cataract surgery keeps seniors active and involved and self-sufficient -- those are good things, dammit.
http://www.healthbeatblog.org/2008/08/do-seniors-have.html#more

Millions With Chronic Disease Going W/O Insurance or Treatment

A new study to be published this Tuesday in the medical journal Annals of Internal Medicine estimates that one of every three working-age uninsured adults in the U.S. has been diagnosed with a chronic illness -- diseases such as diabetes or high blood pressure.

Even though their conditions could be successfully managed, they are going without even doctor visits to monitor their progress. Instead, they rely on very expensive emergency room visits.

The actual figure now of uninsured Americans is 47 million; the study estimated that about 11 million (of the 36 million uninsured in 2004) had been diagnosed with a chronic condition. Nearly a fourth of the uninsured said they had not visited a doctor in the past year. The total number with such a condition may be higher for two reason: the growth in the number of total uninsured since 2004, and the fact that people may have developed such a condition in past year and not know it.

We can do better than this, people. Forty seven million uninsured is a disaster waiting to happen.

Info from New York Times report at http://www.nytimes.com/2008/08/05/business/05health.html?_r=1&adxnnl=1&oref=slogin&ref=health&adxnnlx=1218316447-mchkYD402MaReOGqwa1txg

McCain Health Care Plan Glosses Over Fact that Key Provider Info Hard to Come By; How Then is Consumer to Choose?

One of the big campaign issues is what each candidate proposes to improve the state of health care in this country. The United States spends far more per capita and seems to get less for the dollar compared to nations with some form of national health plan.

The McCain campaign claims that consumers will benefit by being empowered to choose their own providers and buy their own health insurance. He plans to eliminate the tax incentives to employers for providing coverage to their employees. It seems reasonable that if the tax breaks are in fact eliminated, then employers will no longer offer any form of insurance coverage as a benefit to their employees.

Left to their own devices, Americans may think that they can just muddle ahead but will soon find that the data one would need to make these provider choices is difficult if not impossible to come by. And while some providers may post some information on their websites, it may not be in the same format as another provider’s. Consumers are left trying to compare apples and oranges.

The federal Agency for Health Care Research and Quality (AHRQ) found that there are 12 different rating schemes for doctors, 26 for medical groups, and 81 for hospitals, and 86 for health plans. Even the most intrepid, determined consumer is hard pressed to research all of that data and find a doctor who meets their needs. How many of us have the time to research even a fraction of those databases or of the health care providers in their county? Good luck to you even if you do have the time.

The Alternet website has a good article in their recent issue. I cannot quote any excerpts, but here is a link to the story -- http://www.alternet.org/mediaculture/94154/?page=entire. You may also check amednews.com

Michelle’s Law Languishes in Congress; Would Allow Medical Leave

Those of us who live outside New Hampshire probably never heard of Michelle’s Law. But it is a provision for college students to continue their student health insurance coverage even if they have to take a medical leave from school for a year. That way, they do not have to exercise the COBRA provision of the student health coverage, under which policyholders pay 102% of the full premium cost.

HB 2851 was the United States House of Representatives’ version of the bill; this bill passed unanimously on July 30, 2008. The sister bill SB 400 is languishing, however, in the Senate. The bill is endorsed by the American Hospital Assn., the National Patient Advocate Foundation, the American Heart Assn., and America’s Health Insurance Plans.

The bill is named for Michelle Morse, a student at Plymouth State University who took chemotherapy treatment for colon cancer. To avoid losing her student insurance, she enrolled in a full course load. The premium to continue her coverage under the COBRA law would have cost over $500 a month, a charge her family could not afford.
What follows is excerpt from MichellesLaw.com about the bill when it was signed into law by Gov. Lynch of New Hampshire.

Joined by the family of Michelle Morse and legislators, Gov. John Lynch today signed "Michelle's Law," helping ensure that college students do not lose their health insurance when they need it most.
The legislation, HB 37, ensures that seriously ill college students can continue to receive health care insurance through their family's health insurance policy even if they are unable to maintain their full-time student status.
"College students should not lose their health insurance just when they need it the most. Now, in New Hampshire, they won't. Michelle's Law will provide an important protection for New Hampshire families," Gov. Lynch said.
Michelle Morse was a student at a Plymouth State University when she was diagnosed with colon cancer. Although her doctor suggested she take a leave of absence from school, Michelle Morse maintained a full course schedule in order to keep her health insurance coverage. Michelle Morse died in November [2005].

Read the background behind this bill at http://www.michelleslaw.com/index.php.

You May Want to Lower Your Home Insurance to Keep Up with Deflation

If your home’s value falls due to a softening market, do you still have to insure it for the value it had last year?

This is a question, not a conclusion. And it may be a question that no one can really answer. But the query arises because of a report released this July by the Center for Economic and Policy Research called The Impact of the Housing Crash on Family Wealth. [Note that it acknowledges that there is a housing crash.]

It outlines three different scenarios for housing prices in 2009. Number One assumes no further decline in housing prices. This does not seem likely given the fact that prices are declining about 2% a month this year. That is more in line with Number Two, which assumes a further 10% decline in housing prices in 2009. Then there is Number Three, which assumes a drop of 20% in housing prices in 2009.

[Note that none of these assume a rise in housing prices. The best case scenario is -- stable prices. Pass me the aspirin, Martha.]

In fact, it calculates that some family homes are now worth what they were in 1989.
So that leads to my question: Can I get away with insuring it for less, and at least save a couple bucks a year that way?

You can insure your house for as little as you want, really, but you really should not underinsure. You need to at least figure out the replacement cost. The good news is now that the overheated building boom has cooled off, the prices of every kind of lumber product is down dramatically.

But frankly, I bet a lot of homeowners are going to be awfully tempted to burn down houses to get insurance settlement cash in hand so they can start over.
Few will get away with it, of course. Chemical accelerants can be detected by insurance investigators and law enforcement. So remember that because you really don’t want your next home to be a concrete prison cell.

If You Depend on Your Employer for Health Ins., Don't Vote McCain

Hi, --
I don't generally talk about politics at all on this site. However, there are some clear differences between the two major presidential candidates when it comes down to how your health insurance will be affected.
It is already pretty clear that Sen. John McCain has plans to torpedo employer-paid health insurance coverage. How can a president do that? Pretty easy if he is able to push thru a proposed elimination of the tax break for the employer.
Currently the only way that employers are able to offer group coverage at all is because of the tax exclusion employer-paid health insurance.
Ostensibly the goal is to push individuals into state-run pools. But that means that individuals will have to pay 100% of their premiums, whereas now they pay anywhere from 20% to 50%. Some employers do not contribute anything now; they just sign up with an outside administrator like Administaff and let employees pick and choose what they need. And pay 100% of the cost.
Americans are being squeezed between spiraling increases in food bills, gas prices, and often in their mortgages if they got caught in the mortgage credit crunch. Where are they going to get the extra dollars to pay for 100% of their health insurance coverage too? AND pay income taxes on the benefits from your insurance plan??? Are they crazy???Here's a link to a great article on the changes being proposed; this is part one of a two-parter. I hope you benefit from reading it.
HEADLINE: McCain's Health Care Plan: Gut Employer-Based Insurance
http://www.alternet.org/mediaculture/93734/?page=entire
An Excerpt: So far, the press has failed to examine what's at stake here for workers and their bosses -- that, in the long run, employer coverage could disappear, and that, in the short run, they may have to pay taxes on some portion of their health benefits, no matter who wins in November. In effect, it's an unspoken tax increase which has yet to surface in campaign conversation.

Do You Have a Vision Plan? A list of carriers to research to find a plan that fits your needs --

Right now this is just a list of insurance carriers that offer vision insurance plans. I also give their website address and which states they operate in. Will follow up later with something on what to ask for when talking to an agent.

Advantica Eyecare -- AdvanticaEyecare.com (available in all states)
Aegis Administrative Services Inc. -- Aegisadmin.com (all states)
AIG Accident & Health Division -- AIG.com (all states)
AIG Employee Benefit Solutions -- AIGebs.com (all states)
AlwaysCare Benefits Inc. -- AlwaysCareBenefits.com
All states EXCEPT MA, NY
Avensis -- Avensis.com (all states)
BEST Life -- bestlife.com (all states)
Block Vision -- BlockVision.com
ONLY available in CT, DE, MD, NJ, NY, PA, TX, WI
Brokers National Life Assurance Co. -- BNLAC.com
All states EXCEPT CT, MA, NH, NY, VT
Co/op Optical Vision Designs -- COOPoptical.com (all states)
Companion Life -- CompanionLife.com
All EXCEPT CA, CT, HI, IL, ME, MT, NJ, NY, NC, WA
Denali Vision -- DirectBenefits.com (all states)
Dental Select -- DentalSelect.com (ONLY in NV TX UT)
EyeMed Vision Care -- EyeMedVisionCare.com (all states)
Group Link -- GroupLinktpa.com (all states)
Insurance Design Administrators -- idatpa.com (all states)
Kansas City Life Ins. Co. -- KCLgroupbenefits.com
All EXCEPT CT, MN, NJ, NY, PA, VT
New Benefits -- NewBenefits.com (all states)
OptiCare -- Opticare.com
All EXCEPT AL, IN, NY
OUTLOOK Vision Svcs. -- OutlookVision.com (all states)
Patriot Health Inc. -- PatriotHealthFamily.com (all states)
Preferred Vision Care -- PreferredVisionCare.com (all states)
Primary Vision CareServices Inc. -- PVCS-usa.com
ONLY in AR CO FL KS LA MO OH OK TN TX
Principal Financial Group -- Principal.com
All EXCEPT MD, VT
Shenandoah Life Ins. Co. -- ShenLife.com
ONLY in DE IN KY OH SC TN WV WI
Spirit Vision -- DirectBenefits.com
All EXCEPT FL ME MA NH NJ NY RI VT WA
Standard Ins. Co. -- Standard.com
ONLY in AL AR CA CO CT DE FL GA ID IN IA KS KY LA MN MS MO MT NE NH NM ND OH OK
OR SC SD TN TX UT WV WI WY
Superior Vision -- SuperiorVision.com (all states)
Transamerica Worksite Mtg. -- TransamericaWorksite.com (all states)
US vision & dental -- USAvision.net (all states)
Vision Ins. Plan of America Inc. -- VisionPlans.com (WI only)
VSP Vision Care -- VSP.com (all states)

In addition, please note that discounts on laser vision correction are offered by:
All EXCEPT Co/op Optical and Kansas City Life. Discounts vary per carrier.
[Good Luck to all of you considering a plan. Also you could possibly do just as well by shopping the sales, going to a local discount outlet, and buying a spare pair at the same time. Lots of times, I have bought at 2-for-1 sales.]

A Free Health Insurance Card? It could be coming your way

The concept of a free healthcare discount card is being pioneered by Jonathan Edelheit’s Florida based company, Free Health Inc. It sounds like it is not offered independent of group health insurance such as that bought by employers. Rather, it is an extra sweetener to a deal with the employer to make the insurer stand out when bidding for the company’s business. The employer may have employees who cannot afford to enroll themselves or their families -- so they are simply given a discount card (rather than a regular insurance card) so that they can at least access specialized health care services.
Such a plan appeals to employers because it helps them retain employees. Employees like it for obvious reasons, which includes access to online medical advice and discounts on prescriptions.
Free Health has a network of 285,000 providers across the country, and the free cards promise discounts of anywhere from 10% to 50% on a wide variety of services. Providers include family physicians, specialists, surgical facilities and hospitals. Blood work and MRIs, for example, are half price.
The 53,000 pharmacies in the network give discounts of 20% to 50% on generic and brand name drugs, while vision services include LASIK surgery (40% discount) and eyeglasses.
The online medical advice website is eDocAmerica.com. It charges a one-time fee of $8 and no copay.
It sure seems like a promising avenue for working people in low-paying service jobs to get any access at all to medical care. Workers in the food and beverage, and retail, sectors tend to have the lowest rates of insurance coverage.
Right now there are only a few hundred agents signed up with Free Health Inc. so finding someone to explain the whole program may be difficult. On the horizon are plans to add dental discounts and some free prescriptions.
Edelheit’s company is getting inquiries from large corporations interested in his plans, so it may be only a matter of time before this approach becomes an everyday thing.

Auto Insurers Offering Premium Reductions to Safe Drivers via Hi-Tech Monitoring

I don’t usually cover auto insurance matters, but this is something that I am interested in because one of the states where this program is offered is Minnesota (where I live).

Auto insurer Progressive Corp. has begun offering its drivers the chance to cut their costs based on how they actually drive, not only on their age, credit score and number of tickets or accidents on their record.
The monitoring device - sort of like a black box for cars - tells Progressive what time people drive, how many miles they've driven, how fast they accelerate and how often they hit the brakes. It does not track where people go.

Other insurers are offering similar programs, and if this pans out, we could see this become a common feature. American Family Insurance is offering a teen driver monitoring program to help reduce premiums and accidents. GMAC and OnStar have rolled related programs that give a discount to those who drive fewer miles.
The AOL story is at http://autos.aol.com/article/news/_a/car-insurer-offers-discount-to-drivers/20080729124709990001?ncid=AOLCOMMautodynlsec0004&icid=200100397x1206607179x1200366511

Singapore an Interesting Case Study in Healthcare

Singapore has made it a point to guard against a glut of expensive technology, high-volume care, too-long hospital stays, and an excess of physicians and specialists. These reforms helped Singapore reduce its per capita health care spending from 1997 to 2001 by 13 percent—even as the United States increased its per capita health spending by 24 percent over this same period. Today Singapore spends one-seventh what the U.S. does per capita on health care.
The above excerpt is from a very good article on the Singapore system of health care. They do some things very well, altho there are some ways in which their society is different from ours. A major difference is that Singaporeans are on average much younger than Americans or Europeans. That figures into the demand for health care, surgery, and hospitalizations.
Read the whole article in Health Beat at http://www.healthbeatblog.org/2008/07/health-care-in.html#more

Kudos for a great article on world health care.

Stay Tuned for Special Offers!

I cannot give any details right now, but we are working on offering our readers some totally free information materials. Stay tuned and keep your eyes peeled.

W.I.N. told to cease operations, but still trying to sell Utah on its plan

Maybe it sounds too good to be true, but it isn’t. This health insurer refuses no one, covers your health club membership or even your filtered water, and will even give you money for signing up another member.

Technically it is not health insurance, it’s a self-funded Association Health Plan, making it exempt from the intense rules and monitoring that insurers undergo. But the state of Utah wants to shut them down anyway, claiming the company is a Ponzi scheme.

The owner, Michael Bianchi, started the company because his wife could not get health insurance. Read the excerpt below or go to the link for the original story, and draw your own conclusions.
http://www.sltrib.com/News/ci_10028475

Michael Bianchi thinks he has the solution to the nation's health care crisis: Keep people out of the doctor's office by paying out benefits that encourage healthy lifestyles.
Want nutritional supplements? No problem. Bianchi's company, the W.I.N. Association, will pick up the tab. Need a massage, acupuncture or a gym membership? That's covered, too. Even air and water purification products are considered a benefit.
But "they have to be good ones," Bianchi told the Utah Legislature's Administrative Rules Committee on Monday, "because we really want them to be effective."
Sound too good to be true? The Utah Insurance Department issued W.I.N. a cease-and-desist order in March, forcing it to halt business operations here. The Texas-based firm, it says, isn't licensed to market insurance in Utah or any other state for that matter.
W.I.N. doesn't have to be, Bianchi asserts.
The association acts like an insurance company. Its members pay monthly premiums and in return are covered for major medical, dental and vision services, as well as prescription drugs and "wellness" benefits.
No one is denied coverage based on age or pre-existing medical conditions. W.I.N., a member of the Beech Street Corporation - costs 20 to 50 percent less than traditional insurance.
But here's the key difference: Because every person who enrolls in W.I.N. must sign an employment agreement, the company can call itself a self-funded Association Health Plan (AHP) - making it exempt from state and federal laws that regulate health benefit plans, Bianchi said.

Maybe Best Line of Attack on Alzheimer’s Disease is Lifestyle, not meds

It’s been a rough year for R & D when it comes to Alzheimer’s treatments.

Last month, Myriad Genetics said a trial of the experimental product Flurizan failed to show any benefit for Alzheimer’s patients. And last fall we got bad news about Alzhemed from Canada’s Neurochem -- their late-stage study failed.

It may be years before any medical research shows solid results in fighting Alzheimer’s because researchers are still mystified at the cause and progression of the disease. They don’t really know what they are fighting against and what approach to take.

This is not meant to discourage those with loved ones being stolen from them by the slow progression of dementia. The good news is that recent years have made progress in diagnosing, treating, and preventing Alzheimer's and other dementia. Here is a list, probably not a definitive list, but a collection of tips and techniques and how to apply them. Whether you are 40 or 80, mentally sharp or lazy, you should be able to find something here that you can actually use.

Let me take a moment here to encourage victims or their families to participate in local clinical trials and studies. To find such studies in your area, call 1-800-438-4380 for the government's Alzheimer's disease Education and Referral Center, which can help you to locate studies. To sign up for email alerts about new trials, go online to www.nia.nih.gov/Alzheimers. You can also search for studies in your region at www.nia.nih.gov/Alzheimers/Researchinformation/clinicaltrials. General information on the disease or on trials can be found at the Alzheimer's Association website at www.alz.org.

A study by the University of California San Francisco identified these simple factors that were good predictors of who may develop Alzheimer's: greater age, scores on a simplified cognitive exam, the time it took to button a shirt, the time it took to walk 15 feet, being underweight, and not drinking any alcohol at all.

Being underweight, or sudden weight loss, also showed up in a study by the University of South Florida in Tampa. This study involved following 678 Catholic nuns who consented to a lifetime study and have donated their brains for research. The nuns who suddenly lost weight, even those never diagnosed while living, were more likely to develop the disease. So it seems that having that bedtime snack might not be such a bad thing after all. See http://www.sciencedaily.com/releases/2007/06/070611092048.htm.

Exercise is an obvious part of the health regimen. It increases blood flow throughout the body, and as the brain is bathed in blood, it benefits from anything that sends more blood through the system. Walking is still the best choice for someone who is just beginning to exercise, because you proceed at your own pace and it exercises most of the large muscles. Swimming is the other best option, especially for those with joint diseases. A swim in a heated pool really helps arthritic joints or those with weight problems.

Studies show benefits from moderate drinking. The definition of moderate can vary with the study, but the standard adopted by the US Department of Agriculture is no more than 1 or 2 drinks per day for men, or no more than 2 drinks per day for women. One drink equals 12 ounces of beer, 5 ounces of wine, or 1.5 ounces of hard liquor. See more of the report at http://www.hsph.harvard.edu/nutritionsource/alcohol.html.

The benefits of moderate drinking are lowered risks of heart attack, ischemic stroke, peripheral vascular disease, sudden cardiac death, and death from all other causes - and these risks are reduced by 25-40%. Moderate levels of alcohol effect these changes by raising high-density lipoprotein (HDL), which in turn protects against heart disease. It also reduces blood clotting factors that often produce blood clots in the heart, brain, and neck that can lead to strokes. For the May 25 edition podcast from Johns Hopkins that includes alcohol and Alzheimer's, click here http://www.hopkinsmedicine.org/mediaII/Podcasts.html

Also, gallstones and type 2 diabetes were less likely to occur in moderate drinkers than in nondrinkers. It is important to stop at just one or two drinks to avoid the serious damage to the liver and other organs.

The most fun part of fighting off the mental decline associated with aging is the playing of games or puzzles that keep you mentally sharp. Anything from a mean game of sheepshead or contract bridge, to crossword puzzles and computer games, will help in this regard. AOL recently put up a list of the top 10 Games to Make You Smarter. The list included: Hot Brain, Remission, Tetris DS, the New York Times Crossword Puzzles, Brain Age 2, SimCity DS, Math Blaster, Big Brain Academy - Wii, Big Brain Academy, and Brain Age.

Wii has proved popular among the senior community in homes and retirement communities. Nintendo had a booth at an AARP convention in Anaheim in 2006, where attendees could try out Wii and Brain Age. The games use both halves of the brain because players use both hands, and the virtual sports like bowling get players to exercise without driving to a health club, pool, or bowling alley. Watch seniors play Wii bowling at http://www.youtube.com/watch?v=nPcY3yTXITg

A good source of free mental stimulation is online. Go to AOL games and you can play a variety of types of games all for free, and which will use parts of your brain that are rarely called upon in daily life. They have Family Feud with 2000 questions in the online version, so you don't have to twiddle your thumbs while waiting for a download. Their games run the gamut: games oriented to puzzles, words, card & board, arcade, casino, and sports. I myself am partial to both Family Feud and the puzzle game Jewel Quest.

The most user friendly online daily crossword puzzle that I have found is offered by the Washington Post (dotcom). It highlights the clue and answer squares as you work, and you can check it for errors as you go or have it reveal a problematic answer. Five stars. www.washingtonpost.com/crosswords/?d=roll_crosswords.

Another technique suggested by some retired friends is that of taping game shows. They have kept old tapes of quiz shows, and play them over again to see how much they remember. They have quite a store of them, so it takes them at least a year before they repeat episodes.

And yet, having said all this, I cannot help but recall the case of a friend's father, who lived his last few years in a nursing home with the disease. He had had his own business, a technically demanding career that involved producing machined items to customer specifications. In spite of the intellectual and creative demands of his work, the frequent customer contact, and also a large family, he still succumbed to this degenerative illness in retirement. We will never know if he had any genetic predisposition to Alzheimer's, but the lack of any real stimulation in the nursing home environment cannot have helped.

Only recently has a "milkshake" being tested by its maker Accera Inc., Ketasyn, delivered promising results in large-scale testing. The medication feeds brain cells unable to metabolize natural sugars by providing special fatty acids to the brain.

Dr. Helen Kim at the University of Alabama in Birmingham led research into the effects of soy on brain function, especially into how it affects menopausal women. Aged female monkeys were divided into three groups, each with a special diet: soy with isoflavones, soy without isoflavones, and a no-soy diet but with the drug Premarin.

The monkeys were examined at the end of the three-year study and it was determined that there were “fewer Alzheimer’s disease-linked tau protein changes in the brains of monkeys that received soy isoflavones,” according to Dr. Kim.

Isoflavones are a type of phytoestrogen found in soy. Poor tau protein function in the brains of humans with Alzheimer’s can cause the structure of brain cells to collapse. The research was presented at a general meeting of the American Chemical Society in 2001.

However, we are cautioned to avoid modern soy products and rely instead on traditional Japanese or Chinese diet. Asians have received the healthful benefits of soy for centuries. Soybeans have been cultivated since the 11th century B.C. in northern China. Unfortunately, soybeans have one of the highest levels of phytic acid found in plant foods. Phytic acid is a phosphorus compound that binds minerals (like calcium, iron, and zinc) and prevents absorption of those minerals.

But soy that is well fermented eliminates this problem. Fermented soy products include the familiar tofu, miso, tempeh, and the soy milks. The long fermentation process destroys any toxins and makes it easily digestible. As always, moderation is key in benefiting from any healthy food or herb.

One of the most exciting and unexpected avenues of research utilized specialized pre-sleep tapes. A project called ‘Suggestive Therapeutics’ has shown promise in a study conducted at the Mattie C. Hall Health Care Facility in Aiken, SC. Patients who were selected for this experimental program were given recorded pre-sleep affirmations as part of the project. Patients in the control group were those whose families declined participation for whatever reason.

Three days into the 90 day program, staff was rather frantic to fix a broken CD player because the results were so dramatic. A problem patient named Louisa was back to continual yelling, for one thing. All members of the experimental group showed improvement. Medication was decreased, weight was up, cooperation improved. Henry possibly showed the most improvement, resuming feeding himself 4-5 times a week. Esther, who could not be helped with medication, responded to the new protocol and can sit peacefully at her window; before, she yelled all day and night. Overall, during the 90 days no falls occurred, weight was stable and bed sores eradicated. The control group continued to worsen, with increased medication, noticeable weight loss, and behavior worsened. The families of the control group were now clamoring to be in the program. So, phase two of the study began.

A second version of the recording was also made for the benefit of staff, who could listen during their breaks. They were less stressed, and absenteeism dropped from about a third to only 3%.
Staffers began to think of themselves as healers and not just there to collect paychecks for an unpleasant job.

A pillow speaker played the recorded message as they fell off to sleep. The CD player was set on repeat because many patients get up several times a night to use the bathroom. The message is as follows:

As you relax, you are experiencing quiet, peace, happiness, and joy. You can feel God's love surrounding you. This allows you to rest in the knowledge that God's love is guiding you, helping you in every way to make each day good and purposeful. You have good, appreciative feelings for those around you, knowing that you wish every person in your life well and they hold you in high regard.
Your mind will move toward functioning well, and this will give you great pleasure. Your short-term memory is improving, your mind more alert and your recall of names and words improving day by day.
This time of relaxing will help to coordinate your nervous system and improve circulation through your body. The eliminating systems are removing toxins from your body. The foods that you eat will provide nourishment to your body.
You will be calm and cooperative to those around you at all times. You are self-sufficient. This makes you happy and proud. You will look forward to each day and enjoy life. Your short-term memory and your recollection of words and names are serving you well.
You are being healed -- you are becoming whole at all levels. The divine energy within you is rejuvenating your body, mind and spirit.

(One could make their own tape recording of this message for themselves or family members.)

Anyone who has been diagnosed with Alzheimers’, or health care facilities that are interested in replicating the study conducted at Mattie C Hall Health Care Center, may contact the ABC Holistic Health Wellness Foundation. The address is 204 TRESTLEWOOD DR SUMMERVILLE, SC, 29483-1824. You may call 757-457-7231 to order a copy of the report ‘Report of Suggestive Therapy’ or how to use the program in ‘Suggestive Therapy for the Relief of Alzheimer’s Disease.’

A brief description of the approach is given in the online July issue of the American Holistic Health Assn. at http://ahha.org/articles.asp?Id=116. In this article, author Dr. Barbara Derrick talks about its use with a widower named Wally who lived at home alone.

Other supplements are touted as fending off mental decline, among them methyl donors, but that is a topic for another article. Until then, keep exercising different parts of your brain, and keep playing games. Man is an intelligent animal that needs to play.

Are You One of the Thousands Going Overseas for Affordable HealthCare?

This is not exactly a new phenom -- this has been growing for at least ten years. But flying overseas to countries like South Africa, Thailand, India, or even Canada to get some amazingly affordable (and high-quality) surgery or other healthcare is a real option for thousands of Americans. They find that even with the travel expenses, their trip is a real money-saver plus the care is top-notch, often featuring private rooms and attentive nurses.

But do your homework first. I will have to stop back in again and post a summary of all the sources and groups that will help you get set up for your own medical travel. Also I might mention that Mexico is also very popular for DENTAL care -- the right clinics have up to date equipment and low pricees.

One of the more recent articles in the press is this story from Business Week called:

[Outsourcing the Patients
More U.S. health insurers are slashing costs by sending policyholders
overseas for pricey procedures.

For years, Americans have been traveling abroad to save money on elective procedures or dental work. David Boucher, 49, doesn't fit the usual profile for such medical tourists. An assistant vice-president of health-care services at Blue Cross & Blue Shield of South Carolina, he has ample health benefits. But Boucher recently chose to have a colonoscopy at Bumrungrad International Hospital in Bangkok, mainly to make a point about the expanding options available to Blue Cross customers. And his company happily picked up the $640 tab—a bargain by U.S. standards.

Blue Cross and other insurers would like to see more policyholders traveling abroad for medical care. Since the start of the year, Boucher has signed alliances with seven overseas hospitals and hopes to add five more by yearend, including them all in coverage for his company's 1.5 million members. As health-care costs continue to rise in the U.S., "medical travel is going to be part of the solution," he says.]
http://www.businessweek.com/magazine/content/08_12/b4076036777780.htm?chan=search

"Outsourcing the patients" it said. Yikes, I never would have thought it was possible. But with many elective (non-emergency) surgeries, it is so cost effective that even some insurers are paying for such trips. Best wishes to you and bon voyage.

State Insurance Regulators Levy $20 Million Fine Against Insurers

KANSAS CITY, Mo. (July 24, 2008) — State insurance regulators, working together through the National Association of Insurance Commissioners (NAIC), today announced the details of a $20 million regulatory settlement agreement between 29 jurisdictions and HealthMarkets, Inc., and its affiliated companies, MEGA Life and Health Insurance Company, Mid-West National Life Insurance Company and Chesapeake Life Insurance Company.

The regulatory settlement follows a three-year multi-state exam that found multiple problems involving consumer disclosure, oversight and training of agents, claims handling and complaint-handling practices. HealthMarkets faces up to $10 million in additional penalties if it fails to meet performance standards outlined in the settlement.

The multi-state examination was initiated by Washington State Insurance Commissioner Mike Kreidler and Alaska Insurance Director Linda Hall in 2005 and coordinated through the NAIC’s Market Analysis Working Group.

“This is a good multi-state settlement that addresses some serious violations of our consumer protection laws,” said Montana State Auditor John Morrison, who chairs the NAIC Market Regulation and Consumer Affairs Committee. “By coordinating our efforts through the NAIC, we are better able to expedite a collective regulatory response that protects consumers on a nationwide basis.”


According to the terms of the settlement, the companies must implement an outreach program that includes the following:

• Sending a notice to all policyholders with policies issued prior to Aug. 1, 2005that includes a toll-free number, mailing address and e-mail address where policyholders can ask questions about their coverage. The notice also must include a Web site address for each company.


• Ensuring each method of communication is staffed by someone able to provide detailed information about the policyholder’s specific plan.


• Establishing a Web site with a “frequently asked questions” section, general coverage descriptions, a listing of contact information and information on how to appeal a claim or file a grievance.

In addition, the companies must report progress twice a year through Dec. 31, 2009, on performance standards targeted for improvement. Led by Washington, the other states involved in overseeing the insurer’s ongoing activities are Alaska, California and Texas.
There are 13 areas in need of improvement, including:

• Agent training and oversight


• Claims handling


• Identification of company


• Transparency of the companies’ relationship with associations


• Complaints and grievances


• Cancellation, non-renewal and discontinuance notices


• Establishing and maintaining a compliance program

[Check NAIC website for more information or updates as they become available. NAIC stands for National Assn. of Insurance Commissioners. Above is from press release.]

Credit Card Companies, Decoupled from Banks, Explore New Worlds

Have you noticed that your credit cards have divorced themselves from banks?

MasterCard went public in 2006 and Visa followed suit in March of 2008. They benefit from access to more capital and flexibility in the marketplace. However, now they face pressure from shareholders to share the wealth.

Profit targets were much more modest when under the purview of the banks. Management tended to be complacent because they did not have stockholders pushing for more revenue and profits. The credit card companies were member-owned, meaning that if they were considering a buyout of a merchant processor to add value to the company -- it could still be vetoed by any member issuer. At least theoretically, that is. The banks also had a lot of input into matters like pricing, new technology, and more.

Now you are likely to see MC or Visa try to expand into global markets. Handling international payments had been left to co-ops, but now the prospect of real growth in revenue may be too tempting to pass up.

Changes have already come this business. Many of you may already possess an uncoupled debit card -- MasterCard has a decoupled debit card thru Capital One. Most banks really do not like this product because they get stuck with ACH fees while losing out on interchange. Meanwhile Visa has rolled out a MoneyCard for Wal-Mart. MC and Visa are also working thru businesses like Green Dot to build up networks of prepaid reload outlets.

The down side, as already indicated is that stockholders will be much more demanding than member banks ever were about profit and loss. And Wall Street, too, will demand that their marketing expenses be more transparent. The days of mass mailings of cards with few recipients actually qualified to keep it are long past. The card companies will have to work smarter to uncover qualified prospects.

One benefit to merchants in this new era is that they will have more power and influence with the credit companies in terms of bargaining for lower rates or breaks on volume. Merchants feel that they charged more than the actual cost of processing even allowing for a cushion to cover fraud, underwriting and other losses.
But Mastercard is assessing higher fees outside the United States. It has been raising acquiring and access fees about 2% a year and these increases look to continue for the foreseeable future.

Such tactics will be harder to pull off in the United States due to the different split in merchant fees here. Merchants will get hit harder by cost increases and can no longer absorb them. Shrinking profit margins may mean that some merchants will look for other options.

One such alternative is PalPal. You might be shocked to know that PayPal has expanded into digital payments -- no longer an online-only service, PayPal is now accepted by larger online vendors like Moosejaw Mountaineering and Grapevinehill.com.

MasterCard has moved to drop their fee for utility bill payments. It now charges a flat fee of 65 cents on most cards, down a dime. For their consumer debit cards the fee has dropped from 75 cents to 45 cents. This reflects the simple fact that their risk does not in fact rise with the size of the utility bill -- the customer and utility already have a contractual relationship.

One interesting scenario is if Wal-Mart were to buy stock in either company -- or even buy them outright. They are one of the few merchants who could swing such a deal financially. They already have a big influence on the credit card companies just because it is what it is -- the 800 pound gorilla of retailing.

Other specialized retail sectors might demand that fees better reflect actual costs. One such area is that of the pop song download. When you buy a download from iTune, iTune has to pay about 20 cents out of your 99 cents or a dollar to the credit card that you bought it with. Merchants like iTune are going to press for cheaper solutions and could drive down that fee.

Some speculate that the credit cards will have to lower fees as low a nickel a song for these kinds of transactions. This would increase acceptance of their cards for one of the fastest-growing segments of online business.

You will probably see more prepaid cards offered by non-banks such as supermarkets and pharmacies. One example already on the market is the Wal-Mart MoneyCard, a prepaid card handled by Visa and marketed to the under-banked. Visa also handles the prepaid cards offered by Springbok, used as employee incentives, rewards, and product promotions.

Coupled with the prepaid cards are reloading kiosks, part of the Visa Ready-Link program. You may have seen some of them already at merchant locations. Merchant clients share in the revenue from this program so it is likely to prove popular with both consumers and merchants.

Another area still in the pipedream phase is some kind of interface or competition with wiring services like MoneyGram or Western Union. Those two both have cushy markups, and Visa or MC could easily compete with them and still make a comfortable profit. Whether they decide to offer the same, competing services, try to get customers to switch to plastic prepaid cards, or simply buy them out is still unknown.

But think of the possibilities with that. Money transfer with money-card to mobile-phone or card-to-card, or some hybrid service are things that could soon be on customers menu.

It’s going to be a whole new world in the plastic card business.

(Interchange is the rate charged to acquirers and passed on to merchants.)