Long-Term Care Insurance - Gone!

Very interesting article from The Washington Post online - interesting from an insurance perspective, and from the perspective of how Washington plays its game.

The Obama administration has eliminated the long-term care insurance program from the 2010 health care law.

"The program was to be entirely self-financed with the premiums participants paid. Obama officials said that presented them with a problem: If they designed a benefits package generous enough to meet the law’s requirements, they would have had to set premiums so high that few healthy people would enroll. And without a large share of healthy people in the pool, the CLASS plan would have become even more expensive, forcing the government to raise premiums even higher, to the point of the program’s collapse."

As the article says, this will also affect deficit-reduction plans associated with the health-care law.

- Rick

Nobel Winner - Short and Sweet

Here is a graduation speech by one of today's two Nobel prize winners in economics, Thomas Sargent. Given at UC Berkeley in 2007, it is very short and a nice summary of some of what we know about economics.

- Rick

Social Security vs In-Vitro Fertilization

Here is a very interesting case (from foxnews.com) regarding the rights to survivor's benefits of a child, conceived via in-vitro fertilization after the father's death.



Advances in medical and other sciences will continue to provoke the emergence of fascinating, complicated, and important issues in the risk and insurance area.



- Rick

Hurricane Irene (2)

An article from yesterday's (Thursday's) Wall Street Journal, about the potential impact of Irene on east coast state-run insurance programs. The dynamic between private insurers and regulators / state-run insurers - and the potential for non-coastal policyholders to have to subsidize coastal ones - could be significantly affected, and bears watching.



- Rick

Hurricane Irene

As Irene approaches the east coast of the United States, there are a number of potential risk management and insurance implications. Here's an article from the Wall Street Journal blog site about the increased trading of catastrophe bonds over the last few days.



- Rick

Medical Malpractice

Here's a New York Times article summarizing a paper from the New England Journal of Medicine on medical malpractice. The focus of the paper is largely on the frequency of malpractice claims against doctors in a variety of medical specialties.



One thing that the paper does not appear to address is a big issue in medical malpractice: the costs of defending claims (the "loss adjustment expense" in insurance terminology). Thus, even though, as the paper finds, most claims do not result in indemnity payments to the claimant, there are often huge legal costs expended in defending against such claims.



- Rick

Are Birth Rates an Economic Casualty?

Here's a report from the Centers for Disease Control, observing the fairly significant decline in birth rates over the last few years (since 2007). Note the short-term time series chart at the bottom of the document. Is this a result of the recent financial downturn?



Here's a long-term chart of birth rates, which also shows periods of economic recession (thanks to www.calculatedriskblog.com ).



Digging deeper into the cause / correlation would make for an interesting student project.



- Rick

The Mouse Strikes Again

According to the Kaiser Health News, some hospitals have been hiring Disney as a consultant to help improve their customer/patient satisfaction. Could be some potential linkage to actuarial and risk management issues - "quality of service" is likely related, to some extent, to effectiveness of treatment.

The references toward the end of the article to some pushback against paying to send hospital staff members to Disney for training is interesting...

- Rick

Public Pensions

Per an article in The Economist, it's good to see that someone (the city of Atlanta) has made progress in the public pension underfunding area...

- Rick

Health Insurance

A very interesting posting by Richard Posner, who is a justice on the federal 7th Circuit Court of Appeals, and a professor at the University of Chicago. He has largely defined the field of law and economics over the last few decades.

The posting is overall very interesting, but particularly note the following quote:

Third-party payment is a pervasive feature of American medicine. Why anyone should want health insurance other than “major medical”—that is, insurance against catastrophic medical bills—is a great mystery, as is the fact that Medicare subsidizes routine health care of upper-middle-class people. Since disease and injury tend to be unpredictable, health insurance smooths costs over time, which is efficient, but a person could achieve that smoothing simply by saving the money that he now pays in health-insurance premiums and investing it to create a fund out of which to pay future health expenses as they occur.

But we are stuck with third-party payment, and it systematically favors specialists over primary-care physicians, because specialists tend to provide discrete procedures, which are easier for the insurers, whether they are private insurance companies or government, to cost. The care provided by primary-care physicians has, to an extent, an elastic and discretionary quality.

It would be interesting to see how our actuarial science and insurance
students would respond to this.

- Rick

WC in Illinois

I know it's hard to believe that my home state of Illinois might be the site of possibly fraudulent activity... Here's an editorial from today's Champaign News-Gazette regarding a Workers Compensation situation that some are apparently suspecting to be questionable.

- Rick