Here are all the articles I wrote during April, 2010. I hope they're useful to you.

April 29th, 2010

For Your Immediate Reading – Anthem Blue Cross will not be raising rates

As I told you at the beginning of this actuarial dance, the State’s findings will be different from those of Anthem BC’s.  Et voila!  As a result of the State’s actuarial analysis, the following is hot off the presses:

Commissioner Poizner released the following statement today regarding Anthem’s decision to withdraw its rate filing:

“This is a great victory for California consumers. I’m pleased that California consumers will not face rate hikes of up to 39 percent. In late January, because I was highly skeptical of the rate increase, I ordered an outside review to ensure that Anthem’s filing complied with state law. Anthem agreed to delay their increase pending this review. The independent actuarial analysis found numerous and substantial errors in their filing that would have led to massive and unjustified rate increases.  We notified Anthem of these errors and they admitted to the mistakes.”

The independent, outside actuarial analysis was performed by Axene Health Partners, LLC. The report was conducted over a 10-week period and required 500 hours of work by four licensed actuaries. The summary of the review is available at and the entire report is expected to be completed next week.

[Or you can simply read the initial report.]

Based upon a thorough review of Anthem’s calculations, Axene found numerous errors in the methodology used by Anthem to project total lifetime loss ratios. Correcting these errors resulted in lower lifetime loss ratios than initially calculated by Anthem.

The errors identified included:

  • Error #1: Double counting of aging in the calculation of underlying medical trend for the projection of total lifetime loss ratio.
  • Error #2: Anthem overstated the initial medical trend used to project claims for September 2009 for known risk factors.

Both of these errors are errors of math and not differences in actuarial …

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April 24th, 2010

Anthem Blue Cross alert

For subscribers in California, Anthem Blue Cross has announced that it will NOT be increasing individual premiums on 5/1/10 and for the foreseeable future, or at least until the State’s actuaries have completed their analysis of the proposed increase that had been scheduled for 3/1/10.    The company must give subscribers a 30-day written notice prior to increasing premiums.    Read the whole article.

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April 22nd, 2010

Small Businesses: How To Claim Your Health Insurance Premium Tax Credit

Questions abound!   Here’s an answer:


How does an employer claim the tax credit? The credit is taken on the annual tax return. The IRS will provide information on how tax-exempt employers can claim the new credit.

Does taking the tax credit affect an employer’s deduction for health insurance premiums? Yes. The amount taken for the tax credit must be subtracted from the deduction.

May an employer reduce employment tax payments during the year in anticipation of the tax credit? No. The credit applies against income tax, not employment tax (i.e. withheld income tax, social security tax, and Medicare tax).

See more FAQs so that you get the most out of your money!

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April 21st, 2010

Albert Einstein was SO smart!

I love this quote:

“We can’t solve problems by using the same kind of thinking we used when we created them.”

Hmmm… somehow I just know I can find a way to apply this to the Patient Protection and Affordable Care Act (aka HR 3950, aka health care reform, aka stealth care reform).

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April 20th, 2010

3 Ways to Stop Medical Mistakes

It could be a matter of life and death.   If you are hospitalized here are 3 ways to make sure mistakes don’t happen:

1.   BE THERE! Stay with the patient at all times.  NEVER leave a hospitalized friend or family member alone.  Even if you have to hire a private duty nurse for night times.

2.  ASK QUESTIONS! Don’t worry about sounding nosy or seeming annoying.  Memorize the “five rights” of medication safety:  Right Patient, Right Drug, Right Dose, Right Route (such as IV or oral), Right Time.

3.  KNOW YOUR RIGHTS! And enforce them.  These include the right to see your medical records.  Go with your gut.  If it seems like the wrong time for a medication, or if the medicine suddenly looks different, ask questions before accepting it or before letting your friend or family member accept it.

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April 20th, 2010

Hey Kids, This One’s for YOU (and parents too)!

If you are:

1.  A parent whose young adult child is about to be taken off of your health insurance plan because they’re all grown up (well done!), or

2.  A young adult who is about to be taken off of your parents’ health insurance plan because you’re all grown up (good job!),

… then this is good news is for you!

There is a provision in the newly enacted health care reform legislation that will allow young adults up to age 26 to stay on their parents’ health insurance plan, regardless of marital status or the availability of other health insurance.

While this provision doesn’t take effect until September, 2010, there are four insurance companies which have announced they will immediately comply with the new law, without waiting until September.

Humana, Kaiser Permanente and UnitedHealthcare say they will immediately allow young adults to stay on their parents’ plans.    And WellPoint (in some states, that’s Blue Cross) says they’ll implement the new provisions starting June 1.

Here’s an easy-to-read description about this portion of the new law.   I promise it won’t make your eyes bleed!

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April 19th, 2010

Are You an Employee or an Independent Contractor?

Watch out!  The IRS is cracking down on cheating companies!   This recent article is from Parade Magazine:

Some labor-force experts predict that 50% of jobs created in the economic recovery will go to contractors, consultants, or other temporary employees.  That’s good news for employers, since these “contingent workers” cost 30% less than full-time staff (no payroll taxes, health insurance, workers comp or coffee!).   But studies by the U.S. Department of Labor and the Internal Revenue Service suggest that thousands of companies may be calling workers “ contractors” when they’re really full-time.

True independent contractors control when and how they work, rather than obeying directives from an employer. By misclassifying workers, businesses get all the advantages of full-time employees but save millions of dollars. They also gain an edge over their competitors, deprive the government of billions in tax revenue, and hurt employees by making them ineligible for worker’s compensation, unemployment insurance, medical leave, and other benefits.

President Obama has allocated $25 million to the Department of Labor to combat employee misclassification, mostly by hiring additional investigators.  Meanwhile, the IRS is expanding company audits, and states from Nebraska to Maine are announcing initiatives to find—and fine—companies that aren’t playing fair.

“Misclassification is a spreading epidemic,” says Connecticut Attorney General Richard Blumenthal, who recently proposed higher fines and criminal sanctions for businesses in his state that misclassify workers. These companies, he adds, “not only victimize workers, who don’t get the compensation they deserve, but also honest businesses who are underbid or outpriced by those that illegally cut costs.”

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April 18th, 2010

Small Business Health Care Tax Credit

If you own a small business, this is for you.    Did you know that, as a result of the recent health care reform legislation, starting in 2010 you may be eligible for a 35% tax credit?

Eligibility Rules

  • Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
  • Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
  • Average annual wage. A qualifying employer must pay average annual wages below $50,000.
  • Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

  • Maximum Amount. The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
  • Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
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April 9th, 2010

Your Government’s Health Insurance Plan

I have it on good authority that you’ll be able to contact one of the following newly created federal boards and commissions to get help with your government-sponsored health insurance.  Which one will you choose?

1. Grant program for consumer assistance offices (Section 1002, p. 37)
2. Grant program for states to monitor premium increases (Section  1003, p. 42)
3. Committee to review administrative simplification standards  (Section 1104, p. 71)
4. Demonstration program for state wellness programs (Section 1201, p.  93)
5. Grant program to establish state Exchanges (Section 1311(a), p. 130)
6. State American Health Benefit Exchanges (Section 1311(b), p. 131)
7. Exchange grants to establish consumer navigator programs (Section  1311(i), p. 150)
8. Grant program for state cooperatives (Section 1322, p. 169)
9. Advisory board for state cooperatives (Section 1322(b)(3), p. 173)
10. Private purchasing council for state cooperatives (Section  1322(d), p. 177)
11. State basic health plan programs (Section 1331, p. 201)
12. State-based reinsurance program (Section 1341, p. 226)
13. Program of risk corridors for individual and small group markets  (Section 1342, p. 233)
14. Program to determine eligibility for Exchange participation  (Section 1411, p. 267)
15. Program for advance determination of tax credit eligibility  (Section 1412, p. 288)
16. Grant program to implement health IT enrollment standards (Section  1561, p. 370)
17. Federal Coordinated Health Care Office for dual eligible  beneficiaries (Section 2602, p. 512)
18. Medicaid quality measurement program (Section 2701, p. 518)
19. Medicaid health home program for people with chronic conditions,  and grants for planning same (Section 2703, p. 524)
20. Medicaid demonstration project to evaluate bundled payments  (Section 2704, p. 532)
21. Medicaid demonstration project for global payment system (Section  2705, p. 536)
22. Medicaid demonstration project for accountable care organizations  (Section 2706, p. 538)
23. Medicaid demonstration project for emergency …

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April 7th, 2010

I Love This Quote!

“Blaming the insurance industry for the cost of health care is like blaming the waiter for the price of the meal.”

Remember, health insurance is how you pay for health care (aka medical care).   Health insurance and medical care are two entirely different things!  But the politicians have done an amaaazing job of blurring the definitional lines between the two.

The “Stealth Care” Reform bill has done absolutely nothing to stem the cost of medical care or prescriptions.  These are the two main cost drivers in health insurance.

Basically, it’s all about simple arithmetic, folks.…

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