Krugman on stimulus

I usually don't respond to Paul Krugman's blog posts. But last week he wrote about Stimulus and Ricardian Equivalence. The post gives a revealing view of his ideas, so it's worth making an exception.

Paul explains:

...think about what happens when a family buys a house with a 30-year mortgage.

Suppose that the family takes out a $100,000 home loan .... If the house is newly built, that’s $100,000 of spending that takes place in the economy. But the family has also taken on debt, and will presumably spend less because it knows that it has to pay off that debt.

But the debt won’t be paid off all at once — and there’s no reason to expect the family to cut its spending right now by $100,000. Its annual mortgage payment will be something like $6,000, so maybe you would expect a fall in spending by $6000; that offsets only a small fraction of the debt-financed purchase.

So, according to Paul, "Ricardian Equivalence," which is the theorem that stimulus does not work in a well-functioning economy, fails, because it predicts that a family who takes out a mortgage to buy a $100,000 house would reduce consumption by $100,000 in that very year.

How could anyone who thought about this for even a minute — let alone someone with an economics training — get this wrong?

How indeed?

The answer is, we didn't, and Paul got this one wrong.


We all agree that "Ricardian Equivalence" is how the economy would and should work, if there were no "frictions," or other problems.  Yes, even Paul, who writes

It [Ricardian Equivalence] is a dubious doctrine even done right; many people are liquidity constrained, and very few people have the knowledge or inclination to estimate the impact of current government budgets on their lifetime tax liability.

Read that carefully for admission of the converse: if the economy is functioning right, if people are not "liquidity constrained," if people are smart enough to recognize that today's deficits mean tomorrow's taxes, then Ricardian equivalence does hold and stimulus doesn't work. (More careful discussion with a few more ifs  here, here and here.)

So according to Paul, the prediction of a properly functioning economy is that people who take out a $100,000 mortgage consume $100,000 less in the first year; that they do not do so is proof stimulus works.

But of course it is not!  People who take out a $100,000 mortgage with $6,000 payments per year should spend about ... $6,000 per year less on other things. Much of that $6,000 comes out of rent they are no longer paying on the house or apartment they moved out of, so there is not necessarily any change in their consumption of housing services. Some of the $6,000 goes to principal payments, which are a form of saving, allowing the household to put less in the bank. So, in fact they need not change consumption or saving at all!

In fact the classic view predicts exactly what common sense predicts: No, the family does not make radical $100,000 changes in its consumption plans thank you very much.

But what about the extra $100,000 of "spending"? Doesn't the new house contribute to "aggregate demand?" What, in the classic view, goes down by $100,000?

The question is not the family's spending, but where did the $100,000 come from, and what were they going to do with the money?

Most likely, someone was saving money, and put it in a bank. If this family didn't take out the loan, another family would have (perhaps at an infinitesimally lower interest rate) done so, and the economy would have built a different house. Or perhaps the money came from an investor in mortgage-backed securities, who would have built a factory instead. These are where the $100,000 offset in aggregate demand comes from, and why the family's decision to take out the mortgage need have no effect on aggregate demand.

Can something go wrong in that process?  Sure. That's what real analyses of stimulus think about. But those like myself who, reading theory and evidence, come to the conclusion that stimulus doesn't work well, do not come to that conclusion because we think the family will spend $100,000 less!

To me, this example illustrates beautifully how Krugman "got this wrong." He never asked where the $100,000 loan came from!  In his analysis of  government borrowing and spending, he does not ask, who lent the money to the government, and what were they planning to do with it otherwise.  People "with an economics training" are supposed to remember lesson one -- follow the money and pay attention to budget constraints. His stimulus is manna from heaven, not borrowed money.

Good advice to anyone: If you get up one morning with the brilliant insight, "Bob Lucas thinks that a family who takes out a $100,000 mortgage will reduce consumption by $100,000," have a cup of coffee, settle down and think, "Wait, Bob's a pretty smart guy. Did I get this wrong somehow?" before hurling insults Bob's way in the New York Times' blog section.

(Note, this is about Krugman's analysis, not stimulus in general. There are plenty of serious analyses of fiscal stimulus that do not make simple logical errors. The plausibility of their assumptions and how they fit the data is an interesting topic. For another day.)

PS: Why is it my new year's resolution not to respond to Krugman blog posts?

Really, what do you do with a guy who insults fellow economists, while admitting in writing that he doesn't even read the opeds and blog posts that are the cause for his insults (let alone their actual academic work, where ideas can be documented and defended)?  He often doesn't even link or name the articles he's criticizing so his readers can decide for themselves!

If you don't believe me, look here , here, here, here and... well, I could go on. Just search his column for anyone he disagrees with. (And dear New York Times, is there anyone left in the journalistic ethics or fact-checking department?)

The best answer to that sort of thing is silence. Which I resolve to maintain, along with that diet and hitting the gym....

The Fed's Mission Impossible

A Wall Street Journal Op-Ed  reviewing the latest  Fed's proposal (press release) to regulate big banks -- and, soon, everyone else. Here's the much more fun introduction, which we had to cut for space,

Imagine that your brother-in-law and his 5 buddies are heading for Las Vegas. Again. You already cosigned the refi on his house, and it was only a last-minute wire to the bail bondsman that got him out of the slammer last time.

So, you’re going to have another little kitchen-table talk about “the rules.” This time, no lending to your buddies (“limits on credit exposure”). No buying rounds of drinks (“limit dividend payouts and bonuses”). And for God’s sake, don’t lose it all on one silly bet (“stress test”). Keep some cash for the flight home (“liquidity provisions.”) No pawning the wife’s engagement ring for one last double-or-nothing (“leverage limits”). And if I hear there’s trouble, I’m going to come out myself and make sure you don’t overdo it. (“Early remediation”)

Sure, he says, with a twinkle in his eye. Because you both know he’s got your credit card, and you’re not going to let your sister live in poverty (“systemically important”). And you can’t talk about her dumping this lug (“breaking up the big banks”), or at least stopping these Vegas trips (“Volker Rule”), not unless you want to sleep on the couch for a month (“Dodd Frank”).

On to the real oped:

The Fed's Mission Impossible

The Federal Reserve last week announced its new "Enhanced Prudential Standards and Early Remediation Requirements" for big banks, as required by the Dodd-Frank law. You have to pity the poor Fed because it faces an impossible task.

The Fed's proposal opens with an eloquent ode to the evils of too-big-to-fail and moral hazard. And then it spends 168 pages describing exactly how it's going to stop any large financial institution from ever failing again.



More capital is at least a step in the right direction. But the Fed's capital proposals don't go nearly far enough. Putting less than one investor dollar at risk for every 10 borrowed dollars seems laughably low when we're guaranteeing the debts. With a 50-50 chance of a banking tsunami coming across the Atlantic from Europe, you wonder why the Fed is allowing any dividends at all.

But there's nothing here to solve the deeper problems. The last generation of smart MBAs got around capital requirements by pooling risky assets into "AAA" securities that had lower risk weights, and then putting those securities in special-purpose vehicles with off-balance-sheet credit guarantees. Voilà! Same risk, no capital. I can't wait to see what they come up with this time. Diligently following risk weights, European banks built capital ratios by selling good loans and keeping "risk-free" sovereign debt.

The Fed's proposed "credit limits" are a revealing mess. They seem simple and obvious—big banks can't bet more than 10% of their equity on a single counterparty.

But on second thought, it's not so obvious. This wasn't the problem we had in 2008. Banks didn't fail because they lent to other banks. We had a classic run: Investors pulled money from banks that lost a lot on mortgage-backed securities. Yes, banks take too much risk. But they have no incentive to take stupid undiversified counterparty risk.

Credit limits are not so simple either. Suppose you buy a $100 Bank of America bond. OK, you have $100 at risk, though usually there is some recovery in default. But what if they give you $102 of collateral, yet that collateral might be hard to sell or stuck in court for a while? How does a regulator measure that risk? Or what if loans from A to B are funneled through shell company C using derivatives? Ten percent of equity is less than 1% of assets, and a tiny fraction of gross exposures, so measuring it right will matter a lot.
How does the Fed address these problems? Read the 22 pages of overview with 39 separate explicit questions. Translation: Help! We have no idea how to measure and regulate "credit exposure" for modern banks.

The Fed's proposed "triggers" for "early remediation" are interesting attempts to regulate the Fed, not the banks. The Fed recognizes that last time "while supervisors had the discretion to act more quickly, they did not consistently do so." Triggers will force the machinery to action.

Or will they? You're a regulator facing a bank in trouble. If you label it in trouble, you will start a panic in markets. This is the inherent contradiction—your job is to prop up banks, not cause runs. We'll see.
The Fed goes on to a chilling list of "corporate governance" rules, gems such as: "The covered company's board of directors (or the risk committee) must oversee the covered company's liquidity risk management processes . . . [and] determine whether each line or product has created any unanticipated liquidity risk." Well, duh, isn't that what boards do? Why must this be written into federal regulations, with force and penalty of law?

The Fed's proposal exemplifies what a recent editorial in these pages described as Washington's "badly written bad rules." Everything under the sun gets regulated, with no attempt to measure benefits or costs. Sure, as the Fed make clear, Dodd-Frank is to blame, but it could fight back just a bit.

Big picture time. Is any of this going to work?

For 70 years, our government has sought to stop crises by guaranteeing more and more debts, explicitly with deposit insurance, or informally with predictable too-big-to-fail bailouts. Guaranteeing debts gives obvious incentives to gamble at taxpayer expense, so we try to limit risks with regulation. But big banks still have every incentive to avoid, evade and financial-engineer their way around the rules, and they have lots of lawyers, lobbyists and ex-politicians to pressure regulators to use their wide discretion. The government has lost this arms race time and time again. Will this new round of rules, and greater discretionary supervision, finally stop too big to fail?

The depressing scenario is that the six big banks will use this massive regulation as an anticompetitive fortress. We will have the same six big banks 30 years from now, spurred to even greater size with continuing subsidies, cheap Fed-provided financing, the government guarantee, and occasional bailouts. And a financial system as innovative as the phone company, circa 1965.

The only hope I see is that nimble, new small-enough-to-fail competitors will spring up and rebuild the financial system. But this is faint hope in the face of the vast discretionary powers in last year's Dodd-Frank financial legislation and the Fed's rules, which allow the government to step in whenever they decide that a financial risk is "systemically important."

What is not "systemically important?" How I can I build a new financial company that demonstrably causes no "systemic" danger—and is therefore not subject to the Fed's onslaught of regulation, discretionary supervision and "remediation"? How can I assure my creditors that they will receive the legal protections of bankruptcy court, and not be dragged into some arbitrary and politicized "resolution"?

The Dodd-Frank legislation never defines "systemic" or, more importantly, its absence. Under the law, the Financial Stability Council can just "determine" that any company might have "serious adverse effects on financial stability." They can consider any "factors that the Council deems appropriate." The Fed proposes to subject any company to "other requirements or restrictions" if it thinks existing rules do not "sufficiently mitigate risks to U.S. financial stability."

There is nothing to say that a risk to "financial stability" can't be, for example, taking profits away from the big six, or a failure that takes money away from an influential voting bloc. Don't laugh: Life insurance companies were bailed out in 2009 at least in part so they could keep up payments on guaranteed-return retirement products.

The Fed does not propose any such limit to its powers or describe how it will encourage a financial system free of too-big-to-fail firms. The Fed's report has instead a searching inquiry on how it can expand its powers, and how it can begin "designating" and regulating companies beyond the big banks.

If we are going to get out of the guarantee-regulate-bailout trap, we must legally define what is not too big, and what can, will and must—by absence of legal authority—fail. If the government won't break up too-big-to-fail banks, we must at least allow competition to do it.

Health economics by anecdote

In a big-think post  "Is capitalism sustainable" on Project Syndicate, Ken Rogoff put in this little zinger

A third problem is the provision and distribution of medical care, a market that fails to satisfy several of the basic requirements necessary for the price mechanism to produce economic efficiency, beginning with the difficulty that consumers have in assessing the quality of their treatment.

Ok, a difficulty of the blogging/oped medium is that you have to keep things short, and I too hate to be quoted for little snippets out of context...But, really, Et tu Ken?

It's hard to know if the car mechanic is doing a good job. Get ready for the Federal takeover of the car industry. I can't tell B grade exterior from A grade interior plywood, so we need a Federal takeover of home rehab. Vets and dentists operate outside of the mass of stifling health care and insurance regulation, so I guess they're in for the treatment next.

Is it really that much harder to assess the quality of treatment for all health care than the other services we receive? For all medical care, not just extreme cases? Actually, my doctor complains that everyone who comes in has spent a week on the internet and knows too much about treatment options. The internet is ushering in a grand era of star ratings and consumer information.

Where is the evidence? Just this sort of armchair argument has been used for centuries (remember the guilds?) to justify competition-stifling regulation of all sorts of businesses.  Milton Friedman's PhD thesis showed that licensing doctors was good for raising doctor's salaries, but didn't do much for the quality of health care. (His later essay on health economics is still a classic.)

And as always, the real argument for the free market is not that the market is perfect, but that the government is usually far worse. Do we have any evidence that government regulators assess the quality of care better than the people whose lives and money are at stake? Is there any vaguely plausible way that the small asymmetric information in health care justifies the monstrous system we have constructed?

Rant over. But really, there is a lot of harm passing around anecdotes like these as if they are agreed-on economic facts, representing both documentation and a serious cost-benefit tradeoff of viable alternatives. 

(I've written a bit more on free-market heath insurance here. ) 

All the world's troubles in 10 minutes

Last month, John Taylor asked me to give some  lunch-time remarks at a conference on "Restoring Economic Growth" at the Hoover institution. "Oh," said John, "Just talk about what's going on in Europe and how to fix the U.S. economy. Keep it to about 10 minutes." As any economist knows, it's easy to talk for an hour and nearly impossible to talk for 10 minutes. Then I looked at my fellow panelists, who turned out to be George Schultz and Alan Greenspan. Heady company, I feel like a kid again.

The euro crisis,some emerging thoughts on how to create a run-free financial system, a review of why everything on the current policy agenda does not have a prayer of working, and a note of cation to economists'  collective habit of jumping from bright idea to policy. (There is a permanent version on my webpage)

In case you’re not reading the papers, we’re in financial crisis 3.0, a run on European banks stemming from their sovereign debt losses.

This is not high finance. European banks have been failing on sovereign debt since Edward III stiffed the Perruzzi in 1353. This is not a “multiple equilibrium,” a run of self-confirming expectations. People are simply getting out of the way of sovereign default, since it’s pretty clear that governments are at the end of the bailout rope.

By dutiful application of bad ideas and wishful thinking, the Europeans have turned a simple sovereign restructuring into a currency crisis, a fiscal crisis, a banking crisis, and now a political crisis. They could have had a lovely currency union without fiscal union. The meter in Paris measures length. The Euro in Frankfurt measures value. And sovereigns default, just like companies. They could do what George Schulz beautifully called the “simple obvious” things, and return to the kind of strong growth that would let them pay off large debts. Alas, the ECB is full in, both buying debt and lending to banks who buy debt, so now a sharp euro inflation – which is just a more damaging and wider sovereign default -- seems like the most likely outcome.

How did we get here? Financial crises are runs. No run, no “crisis.” People just lose money as in the tech bust. (Let me quickly plug here Darrell Duffie’s “Failure Mechanics of Dealer Banks.” This wonderful article explains exactly how our financial crisis was a run in dealer banks.)

For nearly 100 years we have tried to stop runs with government guarantees -- deposit insurance, generous lender of last resort, and bailouts. That stops runs, but leads to huge moral hazard. Giving a banker a bailout guarantee is like giving a teenager keys to the car and a case of whisky. So, we appoint regulators who are supposed to stop the banks from taking risks, in a hopeless arms race against smart MBAs, lawyers and lobbyists who try to get around the regulation, and though we allow – nay, we encourage and subsidize –expansion of run-prone assets.

In Dodd-Frank, the US simply doubled down our bets on this regime. The colossal failure of Europe’s regulators to deal with something so simple and transparent as looming sovereign risk hints how well it will work. (European banks have all along been allowed to hold sovereign debt at face value, with zero capital requirement. It’s perfectly safe, right?)

The guarantee – regulate - bailout regime ends eventually, when the needed bailouts exceed governments’ fiscal resources. That’s where Europe is now. And the US is not immune. Sooner or later markets will question the tens of trillions of our government’s guarantees, on top of already unsustainable deficits.

What financial system will we reconstruct from the ashes? The only possible answer seems to me, to go back to the beginning. We’ll have to reconstruct a financial system purged of run-prone assets, and the pretense that nobody holds risk. Don’t subsidize short-term debt with a tax shield and regulatory preference; tax it; or ban it for anything close to “too big to fail.” Fix the contractual flaws that make shadow-bank liabilities prone to runs.

Here we are in a golden moment, because technology can circumvent the standard objections. It is said that people need liquid assets, and banks must borrow short and lend long to provide such assets. But now, you could pay for coffee with an electronic transfer of mutual fund shares. The fund could hold stocks, or mortgage backed securities. Nobody ever ran on a (floating-NAV) mutual fund. With instant communication, liquidity need no longer coincide with fixed value and first-come first-serve guarantees. We also now have interest-paying reserves. The government can supply as many liquid assets as anyone wants with no inflation. We can live the Friedman rule.

Short-term debt is the key to government crises as well. Greece is not in trouble because it can’t borrow one year’s deficits. It’s in trouble because it can’t roll over existing debt. Governments can be financed by coupon-only bonds with no principal repayment, thereby eliminating rollover risk and crises. The new European treaty, along with wishing governments would mend their spending ways, should at least insist on long-maturity debt.

You may say this is radical. But the guarantee – regulate – bailout regime will soon be gone. There really is no choice. The only reason to keep the old regime is to keep the subsidies and bailouts coming. Which of course is what the banks want.

On to the US: Why are we stagnating? I don’t know. I don’t think anyone knows, really. That’s why we’re here at this fascinating conference.

Nothing on the conventional macro policy agenda reflects a clue why we’re stagnating. Score policy by whether its implicit diagnosis of the problem makes any sense: The “jobs” bill. Even if there were a ghost of a chance of building new roads and schools in less than two years, do we have 9% unemployment because we stopped spending on roads & schools? No. Do we have 9% unemployment because we fired lots of state workers? No.

Taxing the rich is the new hot idea. But do we have 9% unemployment – of anything but tax lawyers and lobbyists -- because the capital gains rate is too low? Besides, in this room we know that total marginal rates matter, not just average Federal income taxes of Warren Buffet. Greg Mankiw figured his marginal tax rate at 93% including Federal, state, local, and estate taxes. And even he forgot about sales, excise, and corporate taxes. Is 93% too low, and the cause of unemployment?

The Fed is debating QE3. Or is it 5? And promising zero interest rates all the way to the third year of the Malia Obama administration. All to lower long rates 10 basis points through some segmented-market magic. But do we really have 9% unemployment because 3% mortgages with 3% inflation are strangling the economy from lack of credit? Or because the market is screaming for 3 year bonds, but Treasury issued at 10 years instead? Or because 1.5 trillion of excess reserves aren’t enough to mediate transactions?

I posed this question to a somewhat dovish Federal Reserve Bank president recently. He answered succinctly, “Aggregate demand is inadequate. We fill it. ” Really? That’s at least coherent. I read the same model as an undergraduate. But as a diagnosis, it seems an awfully simplistic uni-causal, uni-dimensional view of prosperity. Medieval doctors had four humors, not just one.

Of course in some sense we are still suffering the impact of the 2008 financial crisis. Reinhart and Rogoff are endlessly quoted that recessions following financial crises are longer. But why? That observation could just mean that policy responses to financial crises are particularly wrongheaded.

In sum, the patient is having a heart attack. The doctors are debating whether to give him a double espresso or a nip of brandy. And most likely, the espresso is decaf and the brandy watered.

So what if this really is not a “macro” problem? What if this is Lee Ohanian’s 1937 – not about money, short term interest rates, taxes, inadequately stimulating (!) deficits, but a disease of tax rates, social programs that pay people not to work, and a “war on business.” Perhaps this is the beginning of eurosclerosis. (See Bob Lucas’s brilliant Millman lecture for a chilling exposition of this view).

If so, the problem is heart disease. If so, macro tools cannot help. If so, the answer is “Get out of the way.”

People hate this answer. They want to know “what would you do?” What’s the bold new plan? What’s the big new idea? Where is the new Keynes? They want FDR, jutting his chin out, leading us from the fear of fear itself. Alas, the microeconomy is a garden, not an army. It grows with property rights, rule of law, simple and non-distorting taxes, transparent rules-based regulations, a functional education system; all of George’s “simple obvious steps,” not the Big Plan for the political campaign of a Great Leader.

You need to weed a garden, not just pour on the latest fertilizer. Our garden is full of weeds. Yes, it was full of weeds before, but at least we know that pulling the weeds helps.

Or maybe not. This conference, and our fellow economists, are chock full of brilliant new ideas both macro and micro. But how do we apply new ideas? Here I think we economists are often a bit arrogant. The step from “wow my last paper is cool” to “the government should spend a trillion dollars on my idea” seems to take about 15 minutes. 10 in Cambridge.

Compare the scientific evidence on fiscal stimulus to that on global warming . Even if you’re a skeptic, compared to global warming, our evidence for stimulus -- including coherent theory and decisive empirical work -- is on the level of “hey, it’s pretty hot outside.” And compared to mortgage modification plans, strange “unconventional” monetary policy, the latest creative fix-the-banks plan, and huge labor market interventions, even stimulus is well-documented.

There are new ideas and great new ideas. But there are also bad new ideas, lots of warmed over bad old ideas, and good ideas that happen to be wrong. We don’t know which is which. If we apply anything like the standards we would demand of anyone else’s trillion-dollar government policy to our new ideas, the result for policy, now, must again be, stick with what works and the stuff we know is broken and get out of the way.

But keep working on those new ideas!

How to destroy the middle class

In a splendid recent editorial piece, The New York Times  distilled every bad idea floating around the liberal policy agenda.

A few choice moments:

"Economic growth alone, ... would not be enough to restore the middle class"..."To lift wages requires generous tax credits for low earners, a higher minimum wage, and guaranteed health care" ... "Job training efforts" 

That is, after all, how our ancestors got off the farm.

"...the [jobs] bill recently filibustered by Republicans would have created an estimated 1.9 million jobs in 2012."

I didn't know the tooth fairy was making economic "estimates" these days.

..."unrelenting political pressure for principal write-downs of underwater loans, expanded refinancings for borrowers in high-rate loans, and forbearance for unemployed homeowners." 

Econ 101 quiz. What happens to the unemployment rate if you don't have to pay your mortgage so long as you don't get a job?

"..all forms of income to be taxed at the same rates"

That means dividends and capital gains at the 39.5%  rate. Well, at least it's consistent. If you don't believe in saving and investment, taxing the heck out of them should do the trick.  

 "a financial transactions tax."..."high-end tax increases.. to control the deficit"....  "public education, Social Security, unions, child care, affirmative action and, not least, campaign finance reform"

Read on, (how to destroy the) "Middle Class Agenda" at the New York Times

A continent of bad ideas

Why does noone see that Europe can have a nice currency union without fiscal union? I tried to put together this and some of the other bad ideas that I think are clouding the euro crisis debate in this post on the IGM/Bloomberg "business class" blog.

By artful application of bad ideas, Europe has taken a plain-vanilla sovereign restructuring and turned it into a banking crisis, a currency crisis, a fiscal crisis, and now a political crisis..

Read more here

If you are persistent you will win

If you are persistent you will win

The health insurance claim of Sanjay (name changed) was rejected by the insurance company. Repeated attempts by the insured with insurance company at various levels were not successful. We as Insurance Brokerage Firm advised him to take up the matter with Insurance Ombudsman. The matter took some time as the office of Insurance Ombudsman is having large number of complaints or cases coming up every day. After processing the date were fixed, the case was taken up and finally the insurance company was ordered to pay the claim. We appreciate the persistence effort put in by the insured, which has brought success to him.

Outlook magazine of November 3, 2011 has carried the case of Dr Kunal Saha, a medical doctor working and residing in USA. His wife had died in Kolkatta in 1998 while undergoing treatment. Kunal was convinced that Dr. Sukumar Mukherjee, the top Kolkatta physician who first treated Anuradha, had inflicted on her a massive overdose of Depomedrol, a long acting corticosteroids that went on to play havoc with her immune system; and that the treatment that followed, involving other doctors and the Advanced Medicare Research Institute (AMRI) a reputed private hospital, had been appallingly negligent .Armed with both certainty and rage, Saha, himself, a Kolkatta trained doctor put his peers in the dock.

Saha had too traveled 50 times over 13 years to India to fight the legal battle. I admire this gentleman.

The claim of Saha was for Rs 77 crores but Supreme Court of India delivered a ruling in 2009 which vindicated his struggle. By finding the Kolkatta doctors negligent, it opened the door for compensation order to be passed.

In October 2011, National Consumer Redressal commission has ordered that three Kolkatta doctors who treated Anuradha and AMFI will have to pay Rs 1.73 crores. Net payment after deductions to Saha will be Rs 1.34 crores. According to Dr Kunal Saha the amount spent by him on legal battle has been of the order of Rs 5 crores.

The points coming up before us are;

1. We should be persistent in follow up of our case whether it is Health insurance claim against an Insurance Company or liability claim against someone, who has not performed his duty.

2. Were 3 doctors or AMFI having professional liability cover in 1998 from Insurance Company? If yes will the Insurance Company pay it?

Let us wait and watch.

4 PSU General Insurance Companies to come out with IPO

New India, National, Oriental & United all the 4 PSU General Insurance Companies will be coming out with IPO. Even though some newspapers have written that this is because Government of India is facing financial deficit.

Let us look at the positive aspects of this move of the government;

1. IPO by these strong Insurance Companies will set a healthy record for listing of Insurance Companies in India. It means putting the insurance companies shares on right path i.e. growth 2 or 3 IPO's by Private companies at high premium and then going down on listing or within 2 months of listing would have been disaster.

2. Independent Directors are a requirement of SEBI for listing on Stock Exchange. It means that all the insurance Companies will now become broad based and will start following the rules /concepts of Corporate Governance. It is good for all of us, who are the customers of these Insurance Companies.If you feel that you should be considered for appointment of Independent Director ,this is the time to lobby for it.

3. Listing on Stock Exchange means that name of the company is covered many a times in press/TV so insurance Companies will not have too waste their money on advertising as brand is coming in front of customers on regular basis.

But here is a word of caution. The shares of these companies should not go into the hands of foreign companies because these companies (4 PSU’s) are very valuable because of

1 Real Estate assets( offices/Mumbai Flats owned by New India -thees are worth many many thousands of crores) owned by them. Pvt. Companies are generally operating out of rented buildings.

2. They own valuable investments in stock, accumulated over 40 years.

These shares should go to Indian Citizens who have been the customers of these companies. Therefore I feel;

'Let us write to Finance Minister that 10 % of the equity is reserved for policy holders of the company. We who have been loyal to these 4 companies can get the benefit of appreciation in share price. If you agree make it a point to send a letter to Finance Minister. Let us have this as a campaign.

List of Insurance Repositories selected for maintaining the Insurance data in de mat form.

Recently when the claim was lodged for health insurance with a general insurance company then the delay in clearing /payment of the claim was that they had called for original proposal form , which was submitted when the insured had purchased the policy for the firs time i.e. 3 years back . What can be the situation if insured had purchased the policy 15 years back ?

We always advise the clients that they should keep all the old policies of health insurance in a file ,as it may be needed in future ,when the claim is lodged.

May be Repositories which will start operations in near future will simplify the whole thing as these will maintain data in de mat form. All of us are hopeful that this will help the insured as well as insurers.

5 companies which  have been selected by IRDA for the work of Insurance Repository  are;

1. National Securities Depository
2. Central Securities Depository
3.Stock Holding India
4 CAMS
5 Karvy

It is understood that" In principle" approval has been given to them.
Karvy, which is also in the business of insurance distribution, has been asked to keep arms length distance between Insurance Repository and  its insurance distribution firm . It is a difficult task but we are sure that IRDA, the regulator will take sufficient precautions so that de mat data is not misused.

Yellow markings in the skin around the eyelids are a warning to you as well as insurer

Researchers in Denmark have come out with a study after compiling data of 13000 persons and that too over 30 years . According to this those who were having patches, known as xanthelasmata were more likely to have heart attack or even die with it within 10 years.

These spots are deposits of Cholesterol which are soft and painless. They do not interfere with eyesight /vision. People generally go to dermatologists or skin specialists and get these treated.

In this Danish study started in 1970’s 12745 people were in the control group Out of this 4.4% were having xanthelasmata.Over 33 years 1872 had heart attack ,3699 developed heart disease and 8507 had died. The study shows that those with markings were 48% more likely to have heart attack,39% more likely to have heart disease and 14% more likely to die. The heart disease link is more acute for men in 70 to 79 years age group.

May be insurance companies issuing health insurance policies/life insurance policies  will start compiling data on xanthelasmata,come out with corrective steps (medical advice or loading of premium ) and save on costs associated with claims.

Apollo Munich / L & T / Max Bupa- which one is better and why?

Apollo Munich / L & T / Max Bupa- which one is better and why?

These 3 private sector companies are competing for business from premium customers or HNI’s, (high net worth individuals) who are looking for better health insurance products with good and attractive features.

Let us see the comparison ;

L & T is charging premium 72% higher than premium of Apollo Munich or 25% higher than premium of Max Bupa. The additional benefits offered are:

Hospital Cash Benefit – Rs. 6000 (max)
Recovery Benefits – Rs. 10000 (max)
Attendant person payment- Rs. 1000

provided the insured remains in hospital for 10 days or more than that.

At the same time L&T  product is losing on the following point;
No Claim Bonus is 5% vs. 10% being offered by Apollo Munich or Max Bupa.

When I checked up with few customers about their reaction on L& T product then the feedback was “no one is wishing to earn Rs. 17000 by getting hospitalized for 10 days. A person who is well off and can pay higher premium of L&T  is not the one who is looking for payment of Rs. 17000.

Let us see how L&T product will perform in the months to come.

Safety First on Halloween

Just because Halloween celebrates all things scary, doesn't mean you want any safety scares of your own.  Use these tips from USA.gov to make sure you and your family have a fun and safe holiday.

Pick Visible Costumes:  Pick brightly colored costumes to make it easier for cars to see trick-or-treaters on dark roads.  If the costume must be dark, apply reflective tape on the costume or candy bags to help them be more noticeable.  Flashlights are also good to carry.

Use Face Paint instead of a Mask with your Children’s Costumes:  Face paint may work better than a mask when it comes to visibility.  If you decide to paint designs on your kids' faces, follow the directions on the face paint package closely.  It's a good idea to test the face paint a few days before Halloween and be sure to avoid the eye area when applying.

Don’t snack while Trick-or-Treating:  Inspect all treats before allowing your children to snack on them.  Toss out any candy with opened or damaged wrappers and homemade treats. 

Consider using a Glow Stick:  Make sure costumes are flame resistant.  In luminaries or jack-o-lanterns consider using a glow stick or battery-powered lights instead of candles.

Today (Oct 1, 2011) is a good day as portability of Health Insurance policy has started on Oct 1, 2011

Our compliments to IRDA for bringing this change.

In case any one of you faces any difficulty please inform us or comment on this blog so that it can be taken up with concerned authorities/Insurance Companies.

We feel with a view to fulfill 45 days condition Insurance Companies should start issuing renewal notice 60 days in advance, because only then the customer can fulfill the procedural requirement.

It is then that customer can make up his mind for portability and submit the following

(a) Portability Form

(b) Portability Form

To new insurance company.

We feel Insurance companies should set up the system to issue receipt so that client can use it for reference. A clarification 15 is calendar days or 15 working days will be appreciated. We assume it is 15 calendar days.

HIV patients will be able to get health insurance policy issued

Under the present guidelines of various Insurance Companies have not been issuing Health Insurance policies to HIV patients. From time to time we had expressed that insurance policy should be issued to them, with HIV being mentioned as preexisting disease. We always felt that HIV patient can be involved in accident and may need hospitalization. He can also get some disease which has no correlation with HIV.

It is good to know that IRDA has considered this viewpoint favorably and in near future Insurance companies will start issuing policies to HIV patients with HIV being mentioned as preexisting disease.

We feel it is a good gesture of Regulator as well as Insurance Companies.

It is depressing to know that bribe is demanded in a hospital

Reading of this news item (The Times of India) left me thinking -why it happens in India.





But why it happens? There is urgent need to establish more and more medical colleges/hospitals wish that next budget will bring some proposal which will encourage setting up of medical colleges as will as hospitals.

Be ready to pay Service Tax on health care from next budget (2012)

Be ready to pay Service Tax on health care from next budget (2012). There are clear indications that government is going to impose Service Tax on health insurance from next budget (2012) In case of health care- two options are being considered.
Option 1.

To exclude all services provided by clinical establishments with turnover under Rs.4 crores from the tax. This means that apart from your medical bill at a large private hospital you will also have to pay service tax, which could be 10% of the total amount. The implication of this will be that you should increase sum assured at least by 20% (10% to take care of Service Tax and 10% to take care of inflation).

Option 2.

To leave out hospitals, medical care, diagnostic and paramedical services but tax health check-ups and cosmetic surgery”. After the last budget, the government had deferred a tax on most healthcare facilities in the wake of public protests.

Give with one hand –take it away by other hand

Give with one hand –take it away by other hand.

It is very common to hear this type of statement. The same thing was noticed in one of the news item according to which Apollo Munich is going to get approval for health insurance product for senior citizens of any age. This product is going to get approval of IRDA by end of August 2011.

This is one part of the story where it is giving with one hand. The cooling off period will be 1 year or 12 months. This is what we have called is taking away by other hand. We feel Cooling off period of 12 months is totally unreasonable. Which senior citizen will accept this while knowing it? This will encourage tendency for missselling.Let us avoid it .We do hope the regulator will look into this aspect.

Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us

Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us

It is disappointing to know that Indian general insurance industry which touched premium figure of Rs 42000 crores during 2010-11 has incurred underwriting loss of Rs.10,000 crore .Does it give a signal that for next 5 years these companies will go on incurring losses.
According to Mr. G Srinivasan, chairman and managing director, United India Insurance, commented that the challenges for both the industry and individual insurance companies are enormous.
Over the years, the general insurance industry may be making underwriting losses but the companies have huge investment income by which they have been able to cover up those losses and have been able to show reasonably sound balance sheet over the years, Srinivasan had said at an event in Mumbai.
“The situation will no longer continue because the quantum of losses are increasing. In 2009-10, the general insurance industry had made an underwriting loss of Rs.5,900 crore, whereas in 2010-11 the estimates is that the industry would cross Rs.10,000 crone underwriting losses. The general industry may have to record net losses in 2010-11,’’ he said.
It will be a good idea to know how many cases( number & Rs. Term) are pending against general insurance companies with the following;
Insurance Ombudsmen
Consumer forums at district,state and national level
Civil courts at district ,High Courts,Supreme Court
The figure will be astonishing.

What is the option before the Insurance Companies;
Refix the premium rates
Use the Insurance Broker firms in a big way
Totally do away with their direct sales force .
Strengthen underwriting team.
Merge with other company
Depending on investment income to show reduced losses or a marginal profit is not for what the promoters entered this business. A weak organization is no good for customers.

HEALTH COVERAGE TO CHILDREN AND FAMILIES

MEDICAID & THE CHILDREN’S HEALTH INSURANCE PROGRAM (CHIP)  

offer free or low-cost health coverage to children and families.

• If you are eligible for health coverage from your employer, but are unable to afford the premiums, some States have premium assistance programs that can help pay for coverage.  These States use funds from their Medicaid or CHIP programs to help people who are eligible for employer-sponsored health coverage, but need assistance in paying their health premiums. 

• If you or your dependents are already enrolled in Medicaid or CHIP, and you live in a state offering assistance (Florida), you can contact the Children's Health Insurance Plan or your State Medicaid office to find out if premium assistance is available. 

• If you or your dependents are NOT currently enrolled in Medicaid or CHIP, and you think you or any of your dependents might be eligible for either of these programs, you can contact any of the groups listed here to find out how to apply.  If you qualify, you can ask the State if it has a program that might help you pay the premiums for an employer-sponsored plan:
  


• Contact the State Medicaid Office


• Contact the Children's Health Insurance Plan


• Contact INSURE KIDS NOW by calling 1-877-Kids-Now (1-877-543-7669)

• Once it is determined that you or your dependents are eligible for premium assistance under Medicaid or CHIP, your employer’s health plan is required to permit you and your dependents to enroll in the plan – as long as you and your dependents are eligible, but not already enrolled in the employer’s plan.  This is called a “special enrollment” and you must request coverage within 60 days of being determined eligible for premium assistance. 


• As a Florida resident, you may be eligible for assistance paying your employer health plan premiums. 

 To learn more, call for further information at 1-866-762-2237, or click here to go online to the FLORIDA MEDICAID website.

                    

Free Medicare to all citizens- Time to introspect

Free Medicare to all citizens- Time to introspect.

Times of India of Aug 8, 2011 has carried a news item on the concept being considered under free medicare. Part of it is:

“Working towards its aim of providing free healthcare to all, the government is planning a national health entitlement card (NHEC) for every citizen that will guarantee access to a package of essential primary, secondary and tertiary healthcare fully funded by the centre.

The proposal, finalized by a high-powered expert panel of the Planning Commission, talks of covering both in-patient and OPD services free of cost with cashless facility. The health package will focus on the most common and high-impact healthcare requirements.

While the centre will bear the cost of services offered under the national health package, state government can add more services at their own cost. The health services can be availed through public sector and contracted private facilities, including NSOs and non-profit agencies.

Service providers, be it public or private, who accept the health card will not provide any services to those willing to pay additional fees either out-of-pocket or through their privately purchased insurance policies.

This is being done to keep away those who can pay to avail health services.”

This news came on (the same day) when the world was facing crisis due to debt/ deficite Aug 8, 2011 some of the major countries USA, Italy, Portugal, Greece are facing crisis due to Social Insurance/ Social benefits which were provided by those governments to their citizens.

The question before us is we on the right track. Is there any survey on lignor consumption in localities where we have so called BPL families living. Are we supporting them so that they can spend more on lignor, panmasala and gutka.

Let us include OPD in our health insurance policies.

Let us include OPD in our health insurance policies.

OPD coverage is equally important. Are we living in mid-eighties when Mediclaim product was developed with coverage for Curative treatment?

The News item as above shows the importance of Diagnostic tests where small amount would have saved pain and agony to Joshi/Mishra, their families and the claim which insurance company will have to pay. Imagine the productivity loss which the employer of Joshi/ Mishra has suffered.

The time has come when we should introduce health insurance which offers OPD coverage.

Stay Safe during a Lightning Storm

"IF THUNDER ROARS, GO INDOORS"

Since thunder and lightning storms happen frequently during the summer months, FEMA offers these tips on how to avoid injury during a lightning storm:

• Avoid contact with corded phones.
• Avoid contact with electrical equipment or cords.  Unplug electronic equipment well before the storm arrives because power surges from lightning can cause serious damage.
• Avoid contact with plumbing and bathroom fixtures because they can conduct electricity: do not wash hands, do not take a shower, do not wash dishes or do laundry.
• Stay away from windows and doors, and stay off porches.
• Do not lie on concrete floors or lean against concrete walls.
• If you're caught outside during a storm, stay away from tall trees. Avoid open fields, beaches, and boats on the water. If possible, seek shelter in a thick growth of small trees or in a low lying area.  Also avoid anything metal such as golf clubs/carts, tractors, bicycles, etc. Seek shelter in a car if possible, but avoid touching any of its metal parts. 

      Because lightning is unpredictable and can strike 10 miles outside of  any rainfall the risk to individuals and property is increased.   If you feel you hair standing on end (which indicates lightning is about to strike) squat low to the ground on the balls of your feet. Place your hands over your ears and your head between your knees. Make yourself the smallest target possible and minimize your contact it the ground. DO NOT lie flat on the ground.

      Lightning strike victims carry no electrical charge and should be attended to immediately.  The following are things you should check when you attempt to give aid to a victim of lightning:

• Breathing - if breathing has stopped, begin mouth-to-mouth resuscitation.
  
• Heartbeat - if the heart has stopped, administer CPR.
  
• Pulse - if the victim has a pulse and is breathing, look for other possible injuries. Check for burns where the lightning entered and left the body. Also be alert for nervous system damage, broken bones, and loss of hearing and eyesight.

Your chances of being struck by lightning are estimated to be 1 in 600,000, 

but could be reduced even further by following these safety precautions.

Information provided by the Federal Emergency Management Agency (FEMA).

Is it possible to reduce health care costs?

Is it possible to reduce health care costs?

It is very easy to increase costs. The challenge comes when you have to answer question
“Is it possible to reduce health care costs?”

The truth is yes, it can be reduced if Tiger biscuits can be produced packed transported & then sold at retail level at Rs.50 per kgm by a reputed company Brittania- then why it is not possible to reduce costs when it comes to Health care.

In health care economies can be achieved by
(a)Standardision on design of hospitals
(b)Standardisalon on equipments to be procured/ installed
(c)Use of generic medicines vs branded medicines

(d)Effective procurement of equipment/medicines by hospitals forming consortium

We are sure the cost can be brought down by 25% and the benefit can be passed on to the consumers.

New Generic Drugs in 2011-2012

Generic drugs can save you money. What are considered generic drugs? According to the FDA:

"A generic drug is identical--or bioequivalent--to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Although generic drugs are chemically identical to their branded counterparts, they are typically sold at substantial discounts from the branded price."

Below are two lists* for drugs which are soon to become "generic" for the years 2011 and 2012.

2011

Brand Name----Generic Name----Availibility

Uroxatral------------------------- alfuzosin------------------------July
Zyprexa---------------------------olanzapine----------------------October
Lipitor-----------------------------atorvastatin--------------------November
Caduet----------------------------amlodipine----------------------November
Tazorac----------------------------tazarotene cream---------------November

2012

Brand Name----Generic Name----Availibility

Lexapro---------------------------escitalopram--------------------February
Entocort EC-----------------------budesonide----------------------February
Avandia---------------------------rosiglitazone--------------------March
Avandaryl-------------------------glimepiride---------------------March
Avandamet-----------------------metformin-----------------------March
Boniva----------------------------ibandronate---------------------March
Seroquel--------------------------quetiapine-----------------------March
Avapro----------------------------irbesartan----------------------March
Avalide---------------------------hydrochlorothiazide-------------March
Provigil---------------------------modafinil------------------------April
Plavix-----------------------------clopidogrel----------------------May
Viramune-------------------------nevirapine-----------------------May
Lescol-----------------------------fluvastatin----------------------June
Tricor-----------------------------fenofibrate----------------------July
Clarinex--------------------------desloratadine--------------------July
Singulair--------------------------montelukast---------------------August
Actos-----------------------------pioglitazone----------------------August
Exforge---------------------------amlodipine-valsartan------------September
Diovan----------------------------valsartan------------------------September
Diovan HCT----------------------hydrochlorothiazide--------------September
Geodon---------------------------ziprasidone----------------------September
Combivir-------------------------lamivudine-zidovudine-----------November
Atacand--------------------------candesartan---------------------December
Maxalt---------------------------rizatriptan-----------------------December

*these lists are provided by Excellus BlueCross BlueShield, a nonprofit Independent Licensee of the BlueCross BlueShield Association.

Facts and Myths about Generic Drugs

Fact: 7 in 10 prescriptions in the United States are filled by generic drugs.

Myth: Brand name drugs are safer than generic drugs. Fact: FDA receives very few reports of adverse events about specific generic drugs. Most reports of adverse events are related to side effects of the drug ingredient itself.

To learn more facts and myths concerning generic drugs, please visit the FDA site.

Back-To-School Student Health Fair August 6th

Morton Plant North Bay Hospital is hosting a Back-to-School Health Fair for all Pasco County school students in grades Pre-K through12:

Saturday, August 6th, 2011

Morton Plant North Bay Hospital

Medical Arts Building

6633 Forest Avenue, New Port Richey, FL

To register, call 727-940-2804. Click here for maps and directions.

The following programs will be offered free of charge:

• School/Sports Physicals
• Cardiac Screenings: EKG & ECHO (high school student athletes only)
• General Health Information
• Fingerprinting provided by the Pasco County Sheriff's Office

All students under the age of 18 must have a signed permission slip or have a parent or guardian present with them on

the day of the event to participate. Permission slips will be provided upon registration.  All students ages 18 and older must bring photo identification.

In addition, the following services will also be provided by the Pasco County Health Department free of charge.  All students must be accompanied by a parent or guardian to receive these services:

• Dental Screenings and Education
• School Immunizations - please bring immunization records

MORTON PLANT MEASE

BAYCARE HEALTH SYSTEMS

Consolidated document containing all terms and conditions on health insurance to be issued by Irda

There have been so many notications pertaining to health insurance that Irda may comeout with a conslidated document having all terms and conditions pertaining to all players( Insurance Companies,TPA,s,Intermediaries). This will help all players/customers to refer to one document and have all the queries answered.

If this comes out -it will be a very good step. We welcome this proposal.

OPD coverage to make beginning in Indian Health Insurance

Non coverage of OPD has been one of the major weakness of Indian Health Insurance policies.
As a part of RSBY pilot project is being launched in Puri ,Orissa and will be followed in Mehsana, Gujarat.
We are sure this will result in reduction in claim figures in these pilot projects and scheme will extended to all over the country.What ever happens to RSBY is ultimtely going to spread to all the policies.

TPA,s should provide service to Insurance Companies only

In the recent past we have been hearing that TPA,s have started providing services to corporate clients inmanaging their health care schemes.

Irda does not wish this to happen.This is a good news.Insurance industry lost some of the corporate clients where the cliam ratio was much less than 100%.As a result clients wwhich were adding to the favourable margins were being lost.

PSU's still retain 59% market share of Indian health insurance market (2010-11) of Rs.11145 crores

The health insurance figures for the year 2010-11 are available and PSU's have achieved premium figure of Rs.6578.64 crores vs Rs.4949.67 crores(2009-10). This is 59.02% market share vs 59.09% market share which was achieved during last year.

Health Insurance Premium of Indian Insurance Companies 2010-11 vs 2009-2010

You will notice that every company has shown growth in business with exception of Chola.

Growth during the year of this portfolio is 33.05% and 5 top insurance companies and their market share are:

ICICI Lombard deserves appreciation for taking up 4th position as a result Oriental is now at 5th position in the list. Star Health has crossed figure of Rs.1000 crores by touching figure of Rs.1232.44 crores.

Our comment is- health insurance is the fastest growing segment but even then a lot is to be achieved as we have large population and it needs to be covered.

Some are going & some are coming

Bharti group has sold Bharti AXA (both life & non Life) to RIL (Mukesh Ambani Group). DLF Pramerica is being sold to HCL (Shiv Nadar Group). Future Generali (Kishore Biyani Group) is looking for buyers for both of its Insurance companies.

After tasting the attraction of Insurance sector many well known names /business houses have decided to leave.

At the same time some are getting in this sector .Mahindra & Mahindra is entering non life business. . Magna is also entering non life. Edelweiss is entering Life business.Religare Health should be operational in near future.

Delegations of many foreign companies have been visiting India frequently and have been looking for partners. Some of these are:
Cigna
United
Discovery
Samsung Fire & Marine
….

Let us welcome those who are entering and bid goodbye to those who have left.

CORIS Gipsa TPA JV is not coming

There were indications that CORIS Gipsa TPA JV will become operational by end of 2011 and as a result of the same New/National/Oriental/United (4 PSU’s) will shift their TPA work to the new company.

Tenders were floated and Coris, a French company was selected. Suddenly we find that JV is being dropped. Tendering/Selection process has come under cloud and it was decided by the high ups to avoid negative publicity by dropping this JV.

May be it is the end of the JV idea. Let us wait & watch.

Florida Kid Care - Income Eligibility 2011

Are you eligible for Florida Kidcare, Medicaid, or Healthy Kids? In order to make that determination, you first need to know where your family income falls in the poverty guidelines. See the new 2011 Federal Poverty Guidelines below:

The 2011 Poverty Guidelines for the 48 Contiguous States and the District of Columbia

Persons in family	Poverty guideline
1	$10,890
2	$14,710
3	$18,530
4	$22,350
5	$26,170
6	$29,990
7	$33,810
8	$37,630
For families with more than 8 persons, add $3,740 for each additional person.

To read more information about the Federal 2011 Poverty guildlines, click HERE. Also, if you need to view the income amounts at the varying percentages over 100% of poverty level, please click HERE. The next step is to look at the Florida KidCare Eligibility chart. Below is a brief summary:

• Children ages 0 through one, up to 200% of the federal poverty level, are covered under Medicaid (Title XIX and Title XXI funded)

• Children ages one through five, up to 133% of the federal poverty level, are covered under Medicaid (Title XIX funded)

• Children ages one through five, at 134% to 200% of the federal poverty level, are covered under MediKids (Title XXI funded)

• Children ages one through five, above 200% of the federal poverty level, are covered under MediKids full pay

• Children ages 5 through 18, up to 100% of the federal poverty level, are covered under Medicaid (Title XIX funded)

• Children ages 5 through 18, at 101% to 200% of the federal poverty level, are covered under Healthy Kids (Title XXI funded)

• Children ages 5 through 18, above 200% of the federal poverty level, are covered under Healthy Kids full pay

To learn more or apply for Florida KidCare, please click HERE to visit their web site.

Emphasis is needed on preventive cure

Emphasis is needed on preventive cure.

More and more emphasis needs to be put on preventive cure to reduce hospitalization claims. We always thought that good hygiene is important for healthy life but correlation of brushing teeth twice leading to lower cardiac illness risk is a good and interesting study. This has appeared as a news item in TOI.

Health Insurance portability is delayed

Health Insurance portability is delayed.

In one of my blog I had written that portability of health insurance is having complexities and it will take much longer time to become effective. We have been advising clients that do not postpone buying of Health Insurance policy for portability conditions to be known and being effective. This has happened as the portability is delayed from July 1, 2011 to Oct 1, 2011.

Frauds have no limit in insurance claims

Frauds have no limit in insurance claims.

The following news item is an eye opener, where the person concerned tried to have a claim by taking his father’s death and even managing documents required for lodging claim.

The question before us is:

Was the claim lodged with American Insurance Company, who asked the investigator to investigate the case?

Is it that Indians have stared buying life insurance from foreign insurance companies in foreign?We have started hearing that some people are now buying health insurance outside India because of better coverage.

Pre-existing Condition Insurance Plan (PCIP)

Affordable Healthcare Insurance

The Pre-Existing Condition Insurance Plan makes health insurance available to people who have had a problem getting insurance due to a pre-existing condition.

The Pre-Existing Condition Insurance Plan:

• Covers a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs.
• Does not charge you a higher premium just because of your medical condition.
• Does not base eligibility on income.

To be eligible for the Pre-Existing Condition Insurance Plan:

• You must be a citizen or national of the United States or reside in the U.S. legally.
• You must have been without health coverage for at least the last six months. Please note that if you currently have insurance coverage that doesn’t cover your medical condition or are enrolled in a state high risk pool, you are not eligible for the Pre-Existing Condition Insurance Plan.
• You must have a pre-existing condition or have been denied coverage because of your health condition.

Florida PCIP offers a choice of plan options to fit your needs (different levels of premiums, calendar year deductibles, prescription deductibles and prescription copays) at more affordable premiums.


Follow these links for more PCIP FAQs and information on the Affordable Care Act.

New Dietary Guidelines to Replace the Food Pyramid

LET'S EAT FOR THE HEALTH OF IT!

Your food and activity choices each day affect  your health -- how you feel today, tomorrow and in the future.  The tips below are a good starting point toward a change for a healthy diet and a healthier you: 

• Make at least half you grains whole grains
• Vary your veggies
• Focus on fruit
• Get your calcium rich foods
• Go lean with protein 
• Find your balance between food and physical activity 
• Keep food safe to eat

 More in-depth information can be found by following each topic link above and by visiting the Ten Tips Nutrition Education Series.  Sample menus are available to show how all the recommendations for each food group and nutrient intake can be integrated into a weekly menu.  You can also find tips for eating out and key information on vegetarian diets, and more.

Improving what you eat and being active will help you to reduce your risk of chronic conditions such as diabetes, heart disease, some cancers and obesity. 

For additional resources check out:

• www.DietaryGuidelines.gov
• www.Health.gov/paguidelines
• www.HealthFinder.gov

 Information supplied by the USDA Center for Nutrition Policy and Promotion