Friday, January 20, 2017

Universal Life's Rocky Road: The Latest

As we've been saying for a long time, the first few Universal Life iterations contained the seeds of their own destruction. Flashing forward a bit, we more recently noted that carriers themselves seem to have a penchant for, shall we say, tweaking that downward decline:

"[P]erhaps inspired by the TA litigation, policyholders of other carriers are also suing their insurers, citing much the same legal reasoning."

The newest to enter the fray are The Good Hands People©:

"In his six-page ruling on Jan. 9 denying Nationwide's bid to dismiss, Senior U.S. District Judge Warren W. Eginton wrote the family's claims that Nationwide increased its fees to boost profits while disregarding factors included in the policy are plausible."

What's this mean in English?

Basically, that Nationwide (apparently) got greedy, and then got caught with their hands in the till by lying about various charges and fees. Interestingly, the principle invoked here is called "the implied covenant of good faith and fair dealing." Which, while quaint, seems to me to be the most important underpinning of any contract, perhaps especially life insurance. After all, what else is it but a promise top deliver full value at some unspecified future date, when the original buyer is obviously in no position to contest any abuse by the insurer.

It's not unheard of for older policies (especially underfunded ones) to begin to go "underwater" as regards the cash value. But the real problem here is that the policy owner (in this case, a trust) was unable to obtain accurate, timely information from nationwide that might have helped save the policies.

That's just not right.

So, the case will go forward, and we'll keep readers posted on its progress.

Thursday, January 19, 2017

Failure to Resuscitate

A couple weeks back we shared the news that Obamacare enrollment was flatlining. However, there were still four weeks left in open enrollment which gave hope to resuscitation.

Yesterday HHS released another data set with two additional weeks of open enrollment. The prognosis is now dire and indications are showing a failure to resuscitate. The enrollment figures released show only 63,190 new plan selections since January 1st. This is compared to the 2016 open enrollment when 153,631 plan selections were made during roughly the same time period. Overall enrollment is slightly lower by 10,557.

Comparing the press releases from 2016 and 2017 is quite somber. Note the tone (and figures) used by HHS.

Since Open Enrollment began on November 1, about 8.8 million consumers signed-up for health coverage through the platform or had their coverage automatically renewed. This week’s snapshot includes weekly and cumulative data for enrollment through, a breakdown of cumulative data for 38 states using the platform, and cumulative data for local markets.

“As expected, consumer interest is beginning to increase again as we near the deadline for 2016 coverage,” HHS Secretary Sylvia Burwell said. “We know we have more work to do and as we count down to the January 31 final deadline, we’re focused on making sure consumers understand that they must act soon to find affordable health coverage and avoid the fee for choosing to not have health insurance in 2016. Consumers should know that we’re here to help 24 hours a day, 7 days a week.”

More than 8.8 million Americans were signed up for 2017 coverage through as of January 14, 2017. This compares to about 8.7 million sign-ups as of January 14 last year, as Americans continue to demonstrate strong demand for 2017 Marketplace coverage.

“With almost 9 million people signed up for 2017 coverage just in states, it’s clear that Marketplace coverage is a product Americans want and need,” said Secretary Sylvia M. Burwell. “Strong demand is especially striking in light of the unique headwinds created by discouraging rhetoric from ACA opponents. More than 40,000 people have contacted our call center expressing concerns about whether they should sign up for coverage, with a sharp uptick in these questions last weekend. My answer is a resounding yes: in fact, I’ll be signing up for Marketplace coverage myself by the end of the month. If you still need coverage for 2017, visit or your state Marketplace before January 31, and join me and millions of other Americans in purchasing affordable, quality coverage.”

Today’s report covers the period from January 1 through January 14, 2017. Enrollment weeks are measured Sunday through Saturday. Since this year Open Enrollment began on a Tuesday, the totals reported in this snapshot reflect two fewer days than in last year’s published Week 11 snapshot. Measured over the equivalent time period, plan selections this year are almost 100,000 higher than last year.

Not surprisingly, the government still isn't giving up hope. But based on the enrollment my guess is that many of the insurance companies playing in the market are even closer to issuing DNR orders.

Your Record Drives Underwriting

It makes sense that your driving record would impact your auto insurance. If you've got a spotless record, you're going to pay less than your twin with the multiple DUI's (assuming similar vehicles, of course). But did you know that it also affects how much you'll pay for life and homeowner's insurance, as well?

I did know that it plays a role in life insurance underwriting: after all, applications ask for your driver's license number, and I've seen cases where really bad records result in less favorable underwriting results (which means higher premiums).

But I didn't know that it also comes into play when underwriting homeowner's (and, one presumes, tenant's) insurance, too:

"Allstate, meanwhile, is using driving records to help price home insurance. The company began doing so in 2011 in Oklahoma ... Home insurance prices are based mostly on a home’s reconstruction cost and location. Allstate started looking at driving records to learn about homeowners’ behavior."

To be sure, this makes sense: if you're prone to risky driving behavior, you're probably not going to be the most careful homeowner:

"Poor home maintenance or careless security can lead to damage and home insurance claims."

Which also makes sense.

But as it turns out, that doesn't really matter:

"Insurers don’t have to explain why certain behavior leads to claims. They only have to show a correlation between the variables and claims." [ed: emphasis in original]


Now, this practice isn't widespread - yet - but don't be surprised if your homeowner's insurer runs a motor vehicle report at renewal time.

And drive safely.

[Hat Tip: ‏@LexisInsurance]

Tuesday, January 17, 2017

Anthem and AllClear ID

I just received notice from Anthem about the expiration of the AllClear ID protection that was provided after they were hacked:

Identity Protection Services due to expire soon

January 13, 2017 As you know, individuals impacted by the 2015 cyber attack against Anthem were offered two years of AllClear ID Credit and Identity Theft Monitoring Services (called PRO). That two-year time frame is coming to a close.

We’re writing to let you know that beginning in the next day or so, individuals who chose to enroll in these services will receive a courtesy AllClear ID email 30 days prior to the expiration of those services. ONLY those individuals who chose to enroll in these services will receive a courtesy AllClear ID email. The email will inform them that their AllClear ID services are set to expire and provide renewal options for the individual. Note that enrollment and expiration dates vary, but the earliest expiration date will be in February, and the latest expirations will be in August 2017.

It's nice to know that the Chinese have erased all the stolen data and that ID protection is no longer required.  If that's not the case, might I suggest that Anthem pays for the renewal?  It is, after all, necessitated by their IT department's unbelievable incompetence.

Times are tough all over

In places like England and Hong Kong (to name but two), private insurance is available (indeed, mandatory) for any number of folks, including ex-pats and the like. And just like here, the cost of care continues to increase, even (especially?) in places with "Universal" (ie government-run) health care schemes.

But it's the cost of these medical insurance plans that caught my attention in this article at LifeHealthPro:

"The cost of international private medical insurance is climbing globally, with an inflation rate of 9.2 percent reported for 2016."

In fact, the author's company ("a global insurance advisor") recently concluded a study of almost 100 different countries to see if they could ascertain the primary factors driving these increases. And they seem to have found them:

"[A]n increase in the demand for international quality private care, increases in the cost of health care, new regulations, and fraud."

Regular IB readers will remain nonplussed at this revelation, but it's still interesting. And note, too, that this is different than medical tourism, which involves leaving one's home country specifically for a particular health issue.

The more you know...

Monday, January 16, 2017

Everything old is new again

Pretty much everyone's heard of universal, whole and term life. These are usually bought to replace income that would be lost at one's death, or to pay off the mortgage, those kinds of things. And they generally cover one person at a time (although one can buy spouse and children's riders, these usually come with an expiration date).

When the estate tax was a big deal, one often saw Second-to-Die plans that covered a couple; the plan paid off at the death of the remaining spouse, when the (bulk of) the estate tax was due.

What I haven't seen in a while are First-to-Die plans. As the name basically states, these plans insure two (perhaps more) lives and pays off at the first death. They can be handy for buy-sell agreements, or if a couple has a specific need for one. They're also budget-friendly, in that your insuring two folks for a little bit more than one. They can also be helpful savings vehicles for college funds and the like.

Nothing really ground-breaking, of course, just interesting to see a resurgence.

[Hat Tip: Donna S]

Friday, January 13, 2017

ObamaCare in a nutshell

Actually, it's a license you're required to buy for the privilege of then paying for your own health care.


[Hat Tip: FoIB Rich W]

Thursday, January 12, 2017

#ACA_Fail: Laurie Ann's story

For all of the sob stories about what may happen under Repeal/Replace, there's the reality of the very real, very human cost of the ObamaTax's implementation:
[click to embiggen]

Click here for the full (tragic) story.

[Hat Tip: @DaveinTexas]

Words Matter: Health Wonk Review is up!

HWR co-founder and all-around good egg Julie Ferguson hosts this week's eclectic round-up, focusing (natch) on the upcoming Repeal/Replace/Repeat(?) efforts now underway in DC. But there's plenty of other posts, as well, including one from David Harlow on Big Data, and a terrific video from (our favorite economist) Jason Shafrin on health care spending.


Uninsured as Medicaid Failure

Every time I see something like this:

It reminds me of this

Ten years later.  No solution.  Same problem worse.

Wednesday, January 11, 2017

Even *More* Flatlining

The other day, Patrick posted an excellent piece laying bare the unmitigated failure that marks the current Open Enrollment season. In it, he notes that enrollment was waaay off expectations (and goals), and explains why that's important.

Today, FoIB Allison Bell, writing from her familiar perch at LifeHealthPro, alerts us that the overwhelming majority of folks who did sign up for individual health insurance plans had "either a major health problem, such as cancer, or a serious but less severe health problem, such as high blood pressure or depression."

This, of course, is what happens when you make what used to be an insurance plan into a guaranteed issue one with no exclusions for pre-existing conditions.

To reiterate: this is exactly the same thing as buying a car, wrecking it, and then calling up your agent to insure it and pay the claim. No one thinks that makes sense when dealing with auto or home insurance; I've never understood why folks think it makes sense for health insurance (since they're all based on the same underlying insurance principle of indemnity).


(Un?)Intended Consequences, ObamaTax style

Truth bomb:

[Click here for original article]

And then there were 5

The dictionary defines attrition as "a reduction in size, numbers, or strength." And that certainly applies in spades to the ObamaCare Co-Op program. What began as a promising healthcare financing option has gradually, relentlessly gone downhill:

"Eighteen of the original 23 Obamacare CO-OPs have failed at a total cost to taxpayers of more than $1.8 billion."

But hey, it's only (your) money, right?

[Hat Tip: John Goodman]