New India introduces different rates for 3 zones in India

For motor insurance India used to be divided into 2 zones.
But for health insurance New India has divided India into 3 zones;
Zone 1 Mumbai
Zone 2 Delhi/Bangalore
Zone 3 Rest of India
The question arises ;
As the difference between rates for 3 zones is very small,is it worthwhile to have 3 rates?
A person from zone 3 wishes to go to Delhi or Mumbai for treatment because facilities are not available in his home town in zone 3.Will he be permitted to undergo treatment or not?
A person from zone 3 goes to Mumbai and claims I am visiting Mumbai-will he be permitted treatment for the disease which he could have got treated in his home town in zone 3?

Will 3 rates result in customer satisfaction or dissatisfaction?
Let us wait and watch.

only 2 health insurance co's start working in India in 2 and a half year

India is a large country .IRDA has special rules for setting up of health insurance co's by putting in equity of Rs. 25 crores vs Rs. 100 crores required for setting up of a normal non life insurance co.

In 2 and a half years time only 2 health insurance co's started working in India.

What can be the reasons?

1 Shortage of funds -No.I do not believe .In our country even movies are being produced with investment of more than Rs. 25 crores
2 Unattractive as a business-With population of 110 crores,every business is boomimg,GDP growth @ 9.3% (I do not believe this)
3.Rs.25 crores is too small asum for setting up an all India co and high real estate cost is affecting .Yes this is the possible reason.

Let us think on the following lines;
Instead of India as the territory why not consider state as the territory and IRDA considers issuing of licence to a co ,which will operate only in 1 state.
Lower equity of Rs. 10 crores will do.
easy to start the co as it has to open offices only in 1 state
better control on costs and lower cost of selling
Many of our banks in private sector stated at district level and then grew at the state level and are operating not only in India but even in foreign.level

Comments are invited

Do you know instance where renewal of health insurance for a senior citizen is refused

Do you know instance where renewal of health insurance for a senior citizen is refused? If yes let us know .Whenever this point comes up the insurance co says all renewals are being done and in no case it is being refused.
Your views will help us in taking up this issue.

Co pay concept comes to India (health insurance)

For a long time we have been habitual of near to 100% cost of hospitalization being paid by the insurance co.

National Varishta Bima( senior citizens)has introduced 10% as co pay ,which means 10% will be paid by the insured and rest by Insurance co.Star Health has this fugure at 30 %(with medical examination ) and 50% (without medical examination ).

This is a big change for all of us.

Insurance co's feel this will result in control on the costs as insured will be conscious of the costs.

Let us see how other co's adopt this concept.

Is helicopter medical evacuation covered under Health Insurance Policy ?

Business Standard (Sep 13, 2007) has carried the following photo;

None of the health insurance policy issued to us covers the cost of helicopter medical evacuation.
It is surprising that overseas travel policy issued by various co’s carries sum assured of USD 5,00,000 ( Rs 2 crores+) and in emergency helicopter medical evacuation is also covered/ paid for.
Within India Rs 10 lakhs is the max sum assured possible with Cholamandalam.New India is also increasing the sum assured to Rs 10 lakh and in near future plans to raise it to Rs 25 lakhs.
We do hope Cholamandam & New India will consider including helicopter medical evacuation as part of the policy (Sum assured Rs 10 lakhs).
Your comments are invited so that we can convey our thoughts to the Insurance Co’s.

Diseases knock billions off India Income

TOI (Sep. 13, 2007) has carried an interesting news item according to which
“In 2005 alone, the estimated loss to our national income from diseases like heart

ailments, strokes and diabetes, was a staggering $ 9 billions (Rs. 37000 crores)

Over next 10 yrs, India may lose more than $ 200 billions (Rs. 8, 00,000 crores)
due to employee’s sickness. Some firms are already losing about 14% of

their annual working days -51 days /year.

Very interesting to note that in India health insurance premium collected

during 2006-07 was Rs 3300 crores,which means per capita health insurance

premium spend is Rs. 30 for a year.

PM has announced on August 15, 2007 that Rs 2000 crores will be spent by

the Government of India for health insurance of poor people.
How it will be spent? Will it be subsidy to be given to 4 PSU’s or to all

the insurance co’s offering health insurance?
Till this time no indications are available.

It is in the interest of co’s to go in for Group Health Insurance so that health

of the employees is taken care off.

Your comments are invited.

Feature or Bug?

Yesterday's McPaper characterized one aspect of the ObamaTax pricing regime as the "Family Glitch:"

"Congress defined "affordable" as 9.5% or less of an employee's household income ... the "error" was that it only applies to the employee — and not his or her family. So, if an employer offers a woman affordable insurance, but doesn't provide it for her family, they cannot get subsidized help through the state health exchanges."

Why is this both an "error" and a "glitch?" And why presume in the first place that it was not, in fact, intentional? After all, even the folks in Capital City had to foreseen how many employers would be dumping shifting their employees (and retirees) onto the Exchanges in an effort to gain some control over the financial hurdles being placed before them.

Our Elected Betters© wouldn't have done something stupid, right?

Right?

Alzheimer's Update: Good news (for once)

SoIB Gail S tips us to this recent story in the Dayton Daily News, recounting an award-winning therapy that's deceptively simple:

"Three years ago, Wright State University professor Dr. Govind Bharwani was given a challenge: Find a way to help people living with Alzheimer’s disease so they are less prone to becoming confused, agitated, withdrawn and falling."

And it appears that he has, in fact, succeeded:

"The therapy works by providing each person with their own “memory box” filled with family photos, books and movies they love and other special items."

Once you think about it, it's kind of intuitive: one of the reasons that Alzheimer's patients become so frustrated is that loss of "connection" to the world. I recall that, with my mother, I eventually realized that she wasn't having "good" days or "bad" ones, so much as "today she's in her own world" versus "our world" days. What better way to restore (or at least enhance) that connection than re-establishing treasured experiences?

Another benefit is that this is all done with no drugs, which can be expensive and often have undesirable side effects. Research is now continuing to see how (or if) this can be applied to those living at home with this dread condition.

Kudos to WSU and Dr Bharwani.

Asset Pricing MOOC Open

My Coursera Asset Pricing MOOC is now open. The direct link is here -- but you may need to register to see it. 

I recommend browsing the week 1 videos, especially the theory preview videos, if you want a sense of what it's all about. Week 0 is background material on continuous time math.

Week 0 (background) and week 1 are up now, 2 and 3 should be up later this week.

Warning, this is a PhD level asset pricing class, designed to get you in to the theory used for research-level asset pricing. It pretty much follows my textbook "Asset Pricing" (and supplementary material) You don't have to buy the text to take the Coursera class. People who just want to watch the videos are also welcome.

Take two apps and call me in the morning

Introducing the iDoc® (not really, but we're getting close):



[Hat Tip: FoIB Jeff M]

How uninformed can NYT readers, commentors possibly be?

Every once in awhile you see a comment that just makes you stop and ask how clueless and misguided people can be, then you remember they are allowed to vote.


Your typical NYT tripe from some blowhard that doesn't understand 90% of what he is talking about. The real gem is down in the comments though;

• mikeoshea
• Hadley, NY

"All Republican Congresspeople - except those on Medicare - should be required to buy their own and their family's health care BY THEMSELVES, just as I must buy my wife's (I'm on Medicare, thank the gods) health insurance by myself."

Odd, I thought that is exactly what the law (ACA) required.....until a Democrat President ordered OPM to ignore the law and subsidize it. I also have seen only Republicans fighting to undo the waiver.


In a news report today, Rep. Phil Gingrey, M.D., expressed his opposition to the Obamacare exemption for Members of Congress and their congressional staffs.

“This is yet another example of the Obama administration changing the law for political gain,” Gingrey said. “The exemption for members of Congress and their staffs must be rescinded. Between increased health care costs, scores of missed deadlines and political handouts to friends, this is further proof that Obamacare must be repealed.”

Lets all just hope this Mike O'Shea idiot doesn't vote. And to the NYT, great job informing your readers there paper of record! 

ObamaTax Health Exchange (Marketplace) news

So yesterday, I did my Exchange training and exams. Started at about 9:30 in the morning, finished about 4:30 in the afternoon.

I understand Pat completed this in just a few hours, but he's a lot younger (and apparently smarter) than I am. And I also took the liberty of saving all the training material for future reference (which no doubt added some time, as well)

I'll have a more complete report soon, but here are some of my initial impressions fresh off the training and exams:

I'll just say this: if you're comfortable having ALL your personal medical, financial, tax and what-all info being zipped around between SSA, IRS and DHS (Department of Homeland Security?? Really??), then by all means head right for 'em on 10/1 (assuming they're actually online then).

I'm pretty knowledgeable about this stuff (really!) and even I was amazed and appalled at the level of intrusion this train-wreck has wrought. Oh, and you'll be pleased to know that as taxpayers, you'll have the double-mitzvah of paying through the nose not just for your own health care, but for all those wonderful "others" who qualify for premium and "cost-sharing" subsidies.

Here's my favorite part, though:

"QHPs [Qualified Health Plans] in a Marketplace must also provide coverage that meets one of five levels of generosity ... It is important to emphasize that AV is an average measure of generosity ... the percentage of medical costs the plan will cover after premium payments."

And just who's being generous with MY money? Oh, yeah.

And to top it off, this just in at the WSJ:

"Less than two weeks before the launch of insurance marketplaces created by the federal health "overhaul, the government's software can't reliably determine how much people need to pay for coverage"

Yeah, this is going to end well....

The New-Keynesian Liquidity Trap

I just finished a draft of an academic article, "The New-Keynesian Liquidity Trap"  that might be of interest to blog readers, especially those of you who follow the stimulus wars. 

New-Keynesian models produce some stunning predictions of what happens in a "liquidity trap" when interest rates are stuck at zero.  They predict a deep recession. They predict that promises work: "forward guidance," and commitments to keep interest rates low for long periods, with no current action, stimulate the current level of consumption.  Fully-expected future inflation is a good thing. Growth is bad. Deliberate destruction of output, capital, and productivity raise GDP. Throw away the bulldozers, let them use shovels. Or, better, spoons. Hurricanes are good. Government spending, even if financed by current taxation, and even if completely wasted, of the digging ditches and filling them up type, can have huge output multipliers.

Even more puzzling, new-Keynesian models predict that all of this gets worse as prices become more flexible.  Thus, although price stickiness is the central friction keeping the economy from achieving its optimal output, policies that reduce price stickiness would make matters worse.

In short, every law of economics seems to change sign at the zero bound. If gravity itself changed sign and we all started floating away, it would be no less surprising.

And of course, if you read the New York Times, people like me who have any doubts about all this are morons, evil, corrupt, and paid off by some vast right-wing conspiracy to transfer wealth from the poor to the secret conspiracy of hedge fund billionaires.

So I spent some time looking at all this.

It's true, the models do make these predictions. However, there is a crucial step along the way, where they choose one particular equilibrium. There is another equilibirum choice, where all of normal economics works again: no huge recession, no huge deflation, and policies work just as they ought to.

I took a setup from Ivan Werning's really nice 2012 paper: There is a negative "natural rate" from time 0 to time T, and the interest rate is stuck at zero. After that, the natural rate becomes positive again, and everyone expects the actual interest rate to follow. I solved the standard new-Keynesian model in this circumstance -- forward-looking "IS" and Phillips curves.

This is Werning's "standard" equilibrium choice, which shows all the new-Keynesian predictions. The liquidity trap lasts until T=5, shown as the vertical line in the middle of the graph.

The thick red line is inflation. As you see, there is huge deflation during the liquidity trap, though deflation is steadily decreasing.

The dashed blue line is output (deviation from  "potential".) As you see, there is a huge output gap, though strong expected output growth as it comes back to "trend" at the end of the trap. This is why growth is bad -- in these models you always come back to trend, so if you can lower growth, that raises today's level.

The thin red dashed lines marching toward the vertical axis show what happens as you reduce price stickiness. (I only showed inflation, output does the same thing.) As you reduce price stickiness, it all gets worse -- output at any given date falls dramatically. For price stickiness epsilon away from a frictionless market, output falls to zero and inflation to negative infinity.

I verify in the paper that all the claimed policy magic works in this equilibrium.  Even a small amount of "forward guidance" can dramatically raise output, wasted-spending multipliers can be as large as you like, and those policies get more effective as price stickiness gets smaller.

However, for the same interest rate path, there are lots and lots of equilibria.

This graph shows a different equilibrium. I call it the "local-to-frictionless" equilibrium. Again, the thick  red line is inflation. Now, during the liquidity trap, there is steady, mild inflation. The inflation pretty much matches the negative natural rate, so the zero interest rate during the trap (from t=0 to t=T=5) produces a the real interest rate near the natural rate.

As the trap ends, inflation slowly declines and then takes a "glide path" to zero -- i.e. zero deviation from trend, or back to the Fed's long-run target.

In this equilibrium, there is a small increase in potential output, shown in the dashed blue output line. The new-Keynesian Phillips curve says that when inflation today is higher than inflation tomorrow, output is above potential.

As we turn down price stickiness, the thin red lines show that inflation smoothly approaches the totally frictionless case, positive inflation from 0 to T and zero inflation immediately thereafter. I didn't have room to show it, but  output smoothly approaches a flat line as well.

The paper shows that all the magical policies are absent in this equilibrium: The multiplier is always negative, announcements about the far off future do no good, and deliberately making prices sticker doesn't help.

These are not different models. These are not different policies or different expected policies. Interest rates follow exactly the same path in each case, zero from t until T=5, and following the natural rate thereafter. These are different equilibrium choices of the same model. Each choice is completely valid by the rules of new-Keynesian models. I don't here challenge any of the assumptions, any of the model ingredients, any of the rules of the game for computation. Which outcome you choose is completely arbitrary.

The difference between the calamitous equilibrium and the mild local-to-frictionless equilibirum, in this model, is just expectational mulitple equilibria (with an implicit Ricardian regime.) If people expect the inflation glide path, we get the benign equilibrium. If they expect inflation to be zero the minute the trap ends, we get the disaster.

The paper goes on to compute all the magical policies, consider Taylor rules, and every other objection I can think of. So far.

What do I make of all this? Well obviously, maybe one isn't so dumb, evil, or corrupt for having doubts about changing the sign of all economic principles when interest rates hit zero.

Let me just quote from the conclusion

At a minimum, this analysis shows that equilibrium selection, rather than just interest rate policy, is vitally important for understanding these models' predictions for a liquidity trap and the effectiveness of stimulative policies. In usual interpretations of new-Keynesian model results, authors feel that interest rate policy is central, and equilibrium-selection policy by the Fed, or equilibrium-selection criteria, are details relegated to technical footnotes (as in Werning 2012), game-theoretic foundations, or philosophical debates, which can all safely be ignored in applied research. These results deny that interpretation.

....there really are multiple equilibria and choosing one vs. another is simply an arbitrary choice. Since there is an equilibrium with no depression and deflation, and no magical policy predictions, one cannot say that the new-Keynesian model makes a definite prediction of depression and policy impact.

I have not advocated a specific alternative equilibrium selection criterion. Obviously, the local-to-frictionless equilibrium has some points to commend it: It is bounded in both directions, it produces normal policy predictions, it has a smooth limit as price stickiness is reduced, and it does not presume an enormous fiscal support for deflation. But this is not yet economic proof that it is the "right" equilibrium choice.

We might consider which equilibrium choice is more consistent with the data. The US economy 2009-2013 features steady but slow growth, a level of output stuck about 6-7% below the previous trendline and the CBO's assessment of "potential," a stagnant employment-population ratio, and steady positive 2-2.5% inflation.

The local-to-frictionless equilibrium as shown in my second Figure can produce this stagnant outcome, but only if one thinks that current output is about equal to potential, i.e. that the problem is "supply" rather than "demand," and that the CBO and other calculations of "potential" or non-inflationary output and employment are optimistic, as they were in the 1970s, and do not reflect new structural impediments to output.

The standard equilibrium choice as shown in my first Figure cannot produce stagnation. It counterfactually predicts deflation, and it counterfactually predicts strong growth. One would have imagine a steady stream of unexpected negative shocks -- that each year, the expected duration of the negative natural rate increases unexpectedly by one more year -- to rescue the model. But five tails in a row is pretty unlikely.

The problem in generating stagnation is central to the new-Keynesian model. The "IS" curve and the assumption that we return to trend means that we can only have a low level of output and consumption if we expect strong growth. The Phillips curve says that to have a large output gap, we must have inflation today much below expected inflation tomorrow and thus growing inflation (or declining deflation). Thus if we are to return to a low-inflation steady state, we must experience sharp deflation today.  If one wants a model with stagnation resulting from perpetual lack of "demand," this model isn't it. Static old-Keynesian models produce slumps, but dynamic intertemporal new-Keynesian models do not.
....
I close with a few kinds words for the new-Keynesian model. This paper is really an argument to save the core of the new-Keynesian model -- proper, forward-looking intertemporal behavior in its IS and price-setting equations -- rather than to attack it. Inaccurate predictions for data (deflation, depression, strong growth), crazy-sounding policy predictions, a paradoxical limit as price stickiness declines, and explosive off-equilibrium expectations, are not essential results of the model's core ingredients.  A model with the core ingredients can give a very conventional view of the world, if one only picks the local-to-frictionless equilibrium. That model will build neatly on a stochastic growth model, represented here in part by the forward-looking "IS" equation and changes in "potential." Its price stickiness will modify dynamics in small but sensible ways and allow a description of the effects of monetary policy. This was the initial vision for new-Keynesian models, and it remains true.

Really, the fault is not in the core of the new-Keynesian model. The fault is in its application, which failed to take seriously the fundamental problem of nominal indeterminacy.... Interest rate targets, even those that vary with output and inflation, or money supply control with interest-elastic demand, simply do not determine the price level or inflation.  In a model with price stickiness, nominal indeterminacy spills over in to real indeterminacy.

In that context, this paper shows there is an equilibrium choice that leads to sensible results. Alas, those sensible results are non-intoxicating. In that equilibrium, our present (2013) economic troubles cannot be chalked up to one big simple story, a "negative natural rate" (whatever that means) facing a lower bound on short term nominal rates; and our economic troubles cannot be solved by promises, or a sign reversal of all the dismal parts of our dismal science. Technical regress, wasted government spending, and deliberate capital destruction do not work. Growth is good, not bad. That outcome is bad news for those who found magical policies an intoxicating possibility, but good news for a realistic and sober macroeconomics.
    

If all this just whets your appetite, I hope you will read the paper. Similarly, if you're brimming with objections, take a look at my attempts to anticipate most objections -- what about the Taylor rule, etc. -- in the paper.

McDonalds and the minimum wage

Recently, on a long car trip returning from a glider contest, I did something unusual among our liberal elite: I actually went to a McDonalds and ate there.

The lady who took my order must have been about 19, as were all the other employees I could see, and pretty clearly new on the job.  Getting the order right took some effort.  I made the mistake of paying cash. The bill was something like $7.62. I first offered a $10, and she rang it up. Then I found 12 cents in my pocket, and offered it. This was a big mistake, as the cash register had already computed my change, and adjusting to my offer of 12 cents was beyond her abilities.

Most people might have been annoyed, but as an economist and an educator, I'm happy to see human capital building. OK, I was a little annoyed.

Which brings me, of course, to the proposals for a sharply increased minimum wage.

In the end, there really isn't much argument about what a substantially higher minimum wage will do.

Let us not deny the benefit. For the few people who work at minimum wage, but have worked their way up the ladder enough that they will keep their hours; who are actually trying to support themselves and a few children on these meager wages, it will mean a modest rise in income. The rise may be more modest once you account for taxes and reductions in transfers.  There weren't any such people at my McDonalds, but NPR and the New York Times seem able to find them.

That transfer comes from somewhere. Some of it comes from a wealth levy on existing McDonalds shareholders. If a regulation lowers a company's profits, the stock price declines. Then the rate of return going forward is the same as always. So it's a one-time wealth tax on the existing shareholders. Economists are supposed to like wealth taxes, with an asterisk that it makes future investors a bit skittish.

Some of it comes from higher prices. I read estimates that a big mac might go up from about $3.00 to about $3.50, and dismissed those price increases as a small burden to bear.  Looking around my McDonalds, I found this argument less persuasive. Because, of course, the kind of people who work at McDonalds are also the same kind of people who eat at McDonalds. If you're working at minimum wage in the middle of Oklahoma, you don't go out to a nice Greenwich Village restaurant to sample organic free range locally grown non-GMO gluten-free artisanal nuts and berries. McDonalds is a treat. And a pretty nice one at that. It's clean, healthy -- yes, some offerings are  full of sugar and fat, but not of e coli, and you can get the grilled chicken if you want -- and reasonably tasty. Raising prices from $3.00 to $3.50 is not a small matter if you earn under $10 per hour and you're feeding a few kids too.

Still, that is the benefit.

The cost is just as easy to forecast. McDonalds cuts hours, and uses its most experienced and efficient workers more, and fewer people like my hapless server. And they don't get the oh-so-needed on-the-job training. The biggest impact of minimum wages is not so much on existing workers, but on new workers entering the labor force. (See a nice new NBER working paper by Jonathan Meer and Jeremy West.)

The effects fall heaviest on low-skill teenagers, especially minorities. Tom Sowell is eloquent on this point, for example in a recent New York Post OpEd. I was unaware until reading it that minimum wage laws were initially backed in part as conscious efforts to discriminate against minorities and preserve jobs for white people. Sometimes, I guess, policies do have their intended effects.

This much is pretty obvious. Looking around my McDonalds, though, I could see a deeper possibility -- an unexplored avenue for substitution away from low-skill labor.

source: chownow.com

Why, I wondered, after 10 minutes in line and the third effort to get my simple order right, did I not simply enter my order on my iphone, and then it's ready for me when I step up to the counter? Or why not enter it on a tablet provided right there? Why should ordering at McDonalds be any different than getting money from a bank, or getting a boarding pass at an airport? High end restaurants answer this question by saying they think their customers value the personal attention of a waiter. Maybe, but certainly not at McDonalds.

The answer, for now, is certainly that it's cheaper the way it is. But not for long.. At the left is the first image that popped up when I googled "restaurant ordering app."

And McDonalds is also reportedly testing an ordering and cellphone payment app. "Currently being tested at locations in Salt Lake City and in Austin, Texas, the app lets users order a meal remotely then collect it in person from a store or drive-thru window." My server's job days are already numbered.

Looking more inquisitively behind the counter, it struck me that the technology overall has changed little since the 1960s when my parents took me there as a child. The fry-o-lator beeps,  a teenager picks the basket up and dumps it out, sprinkles salt, and uses a cute little piece of aluminum to neatly line them up in bags, just as they did back then. The main change I could see is that they annoyingly don't let you put your own sugar in your coffee any more.

It's clearly only a matter of time before this whole thing is automated.  Industrial robots can assemble cars; designing a robot to operate the fry-o-lator, or even to cook and assemble the whole hamburger doesn't look that hard. Mechanization usually increases quality: your burger and fries could easily be cooked to order. Swipe your phone or card to pay and off you go. Or, a little drone helicopter delivers it automatically to your table.

(Update: The machine is here already. And planning a new chain to use it, rather than sell to McDonalds, as predicted. Thanks to Michael Ward for pointing it out.)

Reflecting on it, though, it's unlikely to be McDonalds. McDonalds has an amazing technology when you look hard at it: They have figured out how to run restaurants in a way that dramatically conserves on the world's scarcest resource, human capital. To run a McDonalds, you don't have to know how to cook, how to order food, how to buy kitchen equipment, or all the other hundreds of bits of tough knowledge and skill that it takes to run a restaurant. Hamburger U trains the rest.

The whole operation is about taking low-skill teenagers living typically unstructured lives, and training them to what it takes to work.  Peering around the side of the cash register at an earlier trip, I noticed there were pictures on the buttons! You can work at McDonalds and operate its cash registers even if you're functionally illiterate! To say nothing of not knowing what to do when offered $10.12 to pay a $7.62 bill. And McDonalds has a big investment in that technology.

In the face of technical change, it is seldom the successful incumbents who adapt, even when they innovate. Kodak did not bring us digital cameras, trying to protect their film advantage. Print media did not bring us the internet, and are floundering at it. Walmart tries to go online, but Amazon.com is displacing it. The major airlines flop in every attempt to imitate Southwest.

So, as I gaze around the familiar golden arches, it strikes me that the automated fast food restaurant -- and the rapid decline in low-skill employment that it implies --  will likely not come from McDonalds itself. Rather, new competitors will arise that perfect the automated, people-less technology. In the same way that McDonalds displaced the previous era of fast-food restaurants, by perfecting a technology that brilliantly used lots of low-skill people and conserves on scarce human capital. For McDonalds to go automatic would be for it to throw away the key innovation that defines it and has made it such a success.

So we may be past the point that McDonalds sticks with 1950s technology because it's still cheaper to use people. We may just be waiting for the tipping point.

But robot repair technician is a high skill job. McDonalds provided a positive social externality -- it gave young people their first experience of work, of showing up on time, in a uniform, of learning to be pleasant to customers, to work within a heirarchical organization, and so on. Young people who work at McDonalds don't get internships at NPR, the New York Times, or Goldman Sachs to to develop work experience. As McDonalds goes, so will that process. All that will be left is cleaning.

A sturdy hike in the minimum wage, in today's economy, is basically an industrial policy subsidizing the transition to low-skill service industry automation.

ObamaTax School's Now In Session!

Learn it, live it, love it:

I've been remiss....

In case you missed it, I'm the newly-installed Content Expert Writer (Insurance) for Answers.com. It occurs to me that IB readers might be interested in some of my work in that venue, so here are some free samples:

Part 1 of a 3-part series on Universal Life

An explication of Insurable Interest

Enjoy!

But it's a nice hat. That's because the people paid for that hat.

Remember the President's assurances that his ACA would finally “bend the cost curve”?

Despite a determined rear-guard media that clings to Obama's every word as universal truth, evidence accumulates that the President was talking thru his hat.

On September 17, 2013, CBO released it's most recent Long-Term Budget Outlook.

According to CBO, in 20 years, “major health care programs” will be the largest component of federal spending. 

CBO expresses its estimate relative to GDP - which is also growing.  CBO's estimate is that federal health care spending will increase from roughly 3% to north of 8% of GDP.  That's almost tripling the share of a base number that is itself growing every year.   CBO thus anticipates federal dollar spending growth for health care more like 4X's to 5X's its level in 2013.

Bend the cost curve, indeed.  

Talking thru his hat.

(btw, the same CBO estimate finds that  within the next 25 years, federal debt held by the public will be 100% of America’s entire GDP "without accounting for the harmful effects that growing debt would have on the economy."  The corresponding percentage as late as 2007 was less than 40% of GDP.  This administration's failure to bend the federal spending cost curve is clearly a serious problem that extends well beyond "health care".)

Cavalcade of Risk #192: Galloping Into View edition

Nancy Germond hosts this week's romp through the wilds of risk, a maze of medical conditions, and a not-so-*fowl* post on chickens (cluck all you want).

Bored Game

If you have nothing to do, what happens? Some drink. Some go shopping. Others create board

games.

"Everybody has to pay. Nobody ever wins,"

Each player starts out on the "Buy Insurance" square as a small business owner (except for the Occupy Wall Streeters, who begin the game unemployed). Along the way, players are taxed, troubled, hospitalized, or may even fall victim to a death panel as they make their way across the board.

CNS News

Do not pass Go.

Do not collect $200.

"We may have added some funny exaggerations in the game," LeFeber said. "But since the original bill was brought to you by the same folks who so efficiently manage the US Postal Service, Social Security Trust Fund, recent Bank Bailouts, and soon-to-be $17,000,000,000,000.00 in government debt--you know the game is rigged against us from the start."

Just like real life. You have to play the game to know what is in it.

Obamacare Cry Babies

Employees of Bibb County (GA) schools got an early peek at their new benefit plan for 2014.

Through the end of this year employees had a choice between several plans administered by UHC or Cigna. They could pick an HMO or PPO. Copay or high deductible HSA or high deductible HRA.

Choices, choices.

That was then. This is now.

The Georgia Blue's got tired of sitting on the sideline and made a winner take all offer to the SHBP (State Health Benefit Plan) administrator.

Blue won the contract. Cigna and UHC are gone.

Say bye-bye to copay plans and freedom of choice. Employees can pick from one of three plans and their choice is Blue or Blue.

No more copay plans.

They are calling the new design a PPO with an HRA wrap.

Last year the state provided this comparison between the 2012 and 2013 plans. The plans were not bad and not good. Most employees preferred the HMO because of the doc copay's.

2014 is a new year and copay's are last years news. The new PPO Wrap looks like this.

As you can guess, most of the employees are not happy.

Where are the copay's?  Gone . . . .

They can't do this to us! Yes they can . . .

I want my Obamacare plan. This IS your Obamacare plan . . .

For some reason I am reminded of that scene from Private Benjamin.
Pvt Benjamin - "I think they sent me to the wrong place. I did join the army, but it was a different army. I joined the one with the condo's and private rooms."

No doubt, many Pvt. Benjamin's will be checking out the exchange offerings when it opens in a few weeks. Some may even sign up, expecting to get a subsidy . . . or a condo with a private room.

A subsidy that will never happen.

The law says if you have an "affordable" health insurance plan through your employer, you can still buy from the exchange but you are not eligible for subsidies.

How is affordable defined?

Glad you asked. If the employee premium is less than 9.5% of the employee's W-2 gross income the plan is deemed affordable.

If the employer plan meets that criteria, neither the employee or their dependents will qualify for an Obamacare subsidy.

Elections have consequences.

Layers and Layers of Fact-Checkers

The Lame Stream Media prides itself on its unerring accuracy and commitment to getting the facts straight. As it turns out, at least when it comes to life insurance, this pride is, in fact, unjustified. As we pointed out almost 4 years ago, they can't even get the relatively simple suicide exclusion correct:

"...it appears that this may well have been an elaborately staged suicide, the point of which was to leave the proceeds of a life insurance policy to the victim's son ... “There’s no such thing as suicide insurance."

Which is true, but as we pointed out, irrelevant. It would have taken the reporter five minutes to interview a life insurance agent to provide clarity and context (not to mention accuracy).

And now we see the same shoddy reporting in another tragic case:

"... for Cindy Karlsen, there was the $1.2 million policy that her husband had now taken out on her life ... She learned Karlsen had invested some of the insurance money from his son's death into a life insurance policy on her."

And how did the erstwhile Mrs Karlsen learn this? Apparently it came as a big surprise to her that she had applied for life insurance, but some simple fact-checking by the (so-called) reporter might have revealed that it's almost impossible to buy life insurance on another person without his or her consent, let alone knowledge. And a policy with over $1 million on the line is going to require not just a physical examination, but (at least according to the carriers I represent), a telephone interview with the prospective insured.

So we are left to believe one of two things is true:

1) A life insurance company issued a million dollar policy strictly off an application - no exam, no blood or urine draw, no interview - and no effort to confirm the information on the application.

or

2) She agreed to complete and sign a lengthy life insurance application, take a fairly invasive physical exam - including, depending on her age, a stress-test and the release of her medical records - and do an exhaustive telephone interview, without the slightest clue that this was for a ... wait for it .... life insurance policy.

How dumb does the LSM think we are?

[Major IB Thanks to Jeff M for helping me noodle through this post]

Monday Afternoon LinkFest

Lately, we've had an embarrassment of riches concerning the ObamaTax and other related news. Because there are only 24 hours in a day, it's not really possible to give each one the blog-space it probably deserves, but at least we can give our readers a heads' up on what's hot:

1 - We've been warning folks about the very real probability of fraud in the new Navigator program. From FoIB Holly R here's the latest:

"...officials are watching for look-alike websites that could lead consumers to be the victims of fraud or simply confuse people ... States are on the lookout for websites created by interest groups, private insurance companies and sometimes scammers that have similar web addresses and the appearances of the official state exchange websites."

So-called "phishing" sites have been around for a long time, this seems to be the latest iteration of that phenomenon.

2 - Holly also tips us to this story - surely only one of many to come - about pushback on so-called "wellness" programs. In this case, certain employees at Penn State University are protesting a new requirement that they either participate in one of these, with the added benefit that they'll get to divulge some very personal information, at least some of which seems pretty intrusive (and doesn't seem to be particularly "health"-related):

"The plan requires nonunion employees, like professors and clerical staff members, to visit their doctors ... and submit to an extensive online health risk questionnaire that asks, among other questions, whether they have recently had problems with a co-worker, a supervisor or a divorce"

Cost for declining to participate? $100 a month (or $200 if they're married and have their spouse on the plan).

Potential solution (and probably rationale for the whole exercise): opt out of the Penn State plan and onto the Exchange.

3 - We've noted before that the Public Exchanges seem to be having a problem attracting (and keeping) carriers. Our Friend Jeff M reports from North Carolina that the Tar Heel State is no exception:

"FirstCarolinaCare Insurance abruptly pulled out of the North Carolina market, saying there are too many unknowns about how the Affordable Care Act will play out here."

So what if they gave an Exchange and no carrier came?

We may find out.

4 - And circling back around to Navigators and the likelihood of shenanigans, Florida has banned them from county health departments:

"Local health departments can accept public exchange brochures and other exchange outreach material, but they can distribute the materials only if consumers ask for information"

Florida heath officials wanted to make sure that they're agencies know that Navigators "aren't acting on behalf of the state."

Gee, one wonders why anyone would think that.

Not just No, but Heck No!

As Bob noted last month, the grand folks in Capital City aren't too keen on  rubbing elbows with us rubes waiting on line at the Health Insurance Exchange. Far beneath their stations in life, don'tcha know.

Well, it should probably comes as no surprise, then, to learn that Federal "workers" really don't want to give up their gold-plated (but Yugo-priced) health insurance. After all, they were promised that "if they liked their insurance, they could keep their insurance."

[Ironic, I know]

But if you'd really like to know just how much they don't want to forced off those great/affordable plans, "[a] new survey of 2,500 federal employees and retirees found that 92.3 percent believe federal workers should keep their current health insurance and not be forced into ObamaCare."

Frankly, I'm surprised that number's so low.

Exchange THIS

The LA Times reports some major California insurers have built "narrow networks" of doctors and hospitals for plans that will be offered thru the State's Obamacare Exchange.

Insurance companies (and consultants and many large employers) say that these narrow networks reduce costs by increasing the insurers' ability to negotiate price discounts.  Physicians and hospitals say they oppose these narrow networks because they fear patients won't be able to find the doctor or hospital they like, in the plan they like.

As for the State, Peter Lee - executive director of Covered California [the State's Obamacare Exchange] - says "Our interest is in assuring everyone enrolled in a plan has ready access to the clinicians they need . . . That means if a plan can't serve patients, we'll close it down from taking new enrollment"

So if a plan doesn't provide what the Exchange deems sufficient access, the Exchange will make sure the plan can't provide ANY additional access.

Is that a solution?

The Times goes on to say "Consumers could see long wait times, a scarcity of specialists and loss of a longtime doctor."

Isn't that exactly what people say who worry about rationing under Obamacare - and have been relentlessly ridiculed for saying it?

Summers withdraws

You have undoubtedly seen the news by now. Chicago Tribune, and Wall Street Journal

I'm sad, actually. A Summers confirmation would have been a great focus for a national debate on the role of the Federal Reserve, the role and character of its Chair, proper relations between the Fed and Wall Street, where we are going with financial regulation, whether bailouts and stimulus are a good idea, and how macroeconomic and monetary policy should be conducted.

I mean that as a totally honest statement -- don't read any coded pro- or anti- Summers implications in it.

I don't see that happening with any of the remaining candidates. We are at a good moment to attract some lightning, and I'm sorry to see the lightning rod bow out.

Water, water, everywhere - Are YOU covered?

With the horrific flooding going on in Colorado, folks may be wondering how (or even if) their homeowner's insurance policy will cover them. The folks at the National Flood Insurance Program have a neat little widget that helps you determine your home's risk of flooding, and how much flood insurance coverage might cost.

As always, it's best to check with your professional, independent homeowner's insurance agent.

Obamacare Security Breach

Much has been made, at least in some circles, of the vulnerability of your personal information

that will be filtered through the #Obamacare #datahub.

For the most part, the lame stream media has ignored this topic and when they have mentioned it they simply parrot what DC says indicating there is nothing to fear.

Security watchdogs know that hacking is a potential threat but most data breaches come from within, not outside the firewall.

That being said, the first known problem in the Obamacare #exchange has already been reported.

Two reviews are planned of MNsure, the state's new online health insurance exchange, after an employee accidentally distributed confidential information about more than 2,400 insurance agents.

A legislative panel and the legislative auditor said Friday they want more information about the breach. MNsure officials acknowledged mishandling private information. They said the employee sent an email to the office of an Apple Valley insurance broker on Thursday afternoon that contained Social Security numbers, names, business addresses and other identifying information.

LaCrosse Tribune

"Only" 2400 insurance agents.

No big deal, right?

If you buy from the Minnesota health insurance exchange, or any other exchange, how can you be 100% this won't happen to you?

Users of the exchanges will have to provide sensitive information, including Social Security numbers. The information will be sent to a federal hub to verify such things as citizenship and household income. The privacy of confidential data has been a long-time concern for some skeptics of the exchange.

"The people who believe in this are so driven that there's a sub-context of, `Just let us do our job and get as many people signed up as possible, and we'll pick up the debris later,'?" said Steve Parente, a University of Minnesota finance professor who specializes in information technology related to the health industry.

Yes, the push is to sign as many up as quickly as possible. Get more people dependent on the government for free money.

I would be remiss if I failed to mention another option for purchasing your new Obamacare health insurance plan, and it does not involve the data hub or navigators who have had 3 days of training..

Buy OFF exchange through a licensed insurance professional.

This Sceptered Isle, Part DCIV

From the Telegraph of London on 9/11: 

"Death rates in NHS hospitals are among the highest in the western world, shock figures revealed yesterday. British patients were found to be almost 50 per cent more likely to die from poor care than those in America."

Hat tip to Tim Worstall's enjoyable blog, which generally focuses on economics.

The Telegraph article also cites this comment from a U.K. Professor Sir Brian Jarman, who is considered a globally-recognised expert on hospital performance:

"I expected us to do well and was very surprised we didn’t do well – but there is no means of denying the results as they are absolutely clear."

Paul Krugman famously attempted to pre-empt this kind of factual finding several years ago, when he declared  "In Britain, the government itself runs the hospitals and employs the doctors. We’ve all heard scare stories about how that works in practice; these stories are false."

Shucks, a school child knows facts cannot be both absolutely true and absolutely false.   Facts are facts, and in that sense are not political.

Yet in real life the debate over centralized government control of the medical care system rages on, in many cases fueled by expert disagreement over whether facts are true or false.

Another Day, Another Obamacare Payoff

Obamacare. The master plan to deliver (almost) universal access to health care for everyone.

Promises of lower premiums.

Promises that you can keep your plan and your doctor.

Promises of no new taxes.

What's not to love about that?

Then one day, someone started reading the law and it was discovered the promises could not be kept. So HHS and the White House started down a path of handing out pardons.

Pardons for insurance carriers that offered limited benefit plans.

Pardon's for unions and businesses in Nancy Pelosi's district.

Pardon's for college student health plans.

Pardon's for religious institutions that objected to the mandated abortion pill.

Of course the latest round of pardons orchestrated by the White House was an exemption for members of Congress and their staff.

But that was last week.

In case you have been sleeping under a rock, the AFL-CIO, a MAJOR supporter of the Democrat party and Mr. Teleprompter's election campaigns has been whining about the impact of Obamacare. Today we find out someone is coming to dinner at the White House and it isn't Sidney Poitier. 

President Barack Obama is meeting with union leaders at the White House to discuss labor's growing concerns about the new health care law.

Friday's meeting comes after the AFL-CIO approved a resolution this week saying the law could drive up the cost of union-sponsored health plans, encouraging some employers to drop coverage.

White House officials and labor leaders have been trying to work out a possible resolution. Unions want members to be eligible for the same federal subsidies available to low-income workers in the new health exchanges. The White House has resisted that fix, saying the law doesn't allow it.

Townhall

Just because the law doesn't allow it doesn't mean an exception can't be done.

If the president can pardon the Thanksgiving turkey he can certainly arrange another pardon for 11 million of his closest friends.

Everyone get's a pardon.

Everyone except you and me.

Empty promises from an empty suit.

HHS Wants You to Meet Jamie

Continuing their ongoing effort to "educate" people on PPACA, HHS has introduced us to Jamie. Jamie is a 27 year old college graduate. She has been working at the coffee shop for four-and-a-half years and has never made more than $20,000 in a year.

Self admittedly, she really "has no plan...but that's just how her life has worked out." She hasn't been to the doctor since her junior year of high school. If she ever got really ill or injured she couldn't afford to pay for treatment. She doesn't have any savings and struggles to get by with all of her current bills.

For Jamie life with health insurance will provide her with "comfort and stability and safety". She's very eager to sign up for subsidized insurance.

Starting October 1st (maybe?) Jamie will be able to get the health insurance she so desires. Here is her scenario after running through the Kaiser Family Foundation subsidy calculator:

1. Purchase a Silver Plan: Cost to Jamie is $1,021 per year. She will also qualify for MOOP (Max Out Of Pocket) assistance under this plan which will lower her worst case scenario to $2250.
2. Purchase a Bronze Plan:  Cost to Jamie is $480 per year. However, if she takes this option she will not qualify for MOOP assistance and will face a worst case scenario of $6350.
3. Stay without insurance and pay Uncle Sam a "shared responsibility payment" of roughly $200 and role the dice that she will stay healthy.

I wonder what option Jamie will choose? Surely her Navigator will explain all of this and the implications behind each option.

Unusual and Interesting Insurance News

Over the years, we've chronicled such things as virginity and alien abduction insurance (different posts), the risk posed by superheroes simultaneously destroying much of a city while trying to save it, and hole-in-one coverage for sporting events.

And now for more:

■ Terrorism Risk insurance - Back in 2009, we interviewed Chris Klein, Global Head of Business Intelligence for Guy Carpenter (major risk and reinsurance specialists), who explained why government involvement was necessary in providing reinsurance for major terrorist acts.

Four years later, The Cato Institute argues that the Federal Terrorism Risk Insurance Act (TRIA) has passed its sell-by date:

"... the Terrorism Risk Insurance Act of 2002 to create a “temporary” federal backstop against catastrophic losses. This program subsidized private risk with public funds through a cost-sharing program for which the government does not receive any compensation ... The private market is capable of underwriting this risk."

Interesting analysis.

■ On a brighter note, MassMutual recently kicked off a campaign to get parents looking at the topic of life insurance through the eyes of their children. Through a series of cute and compelling videos, MassMutual hopes to get this conversation kickstarted.

Here's a sample:



■ Finally, I know we've never blogged on this one before:

"The Mid-Autumn Festival (scheduled on Sept. 19), is one of China's biggest holidays and features a lantern festival, the exchange of mooncakes and dining with family and friends while gazing at the harvest moon."

Very interesting Henry, and now I'm hungry for some fried won-tons. But what's that got to do with insurance?

Ah, so:

"Residents of three cities—Shanghai, Guangzhou and Shenzhen—can buy insurance online for 20 Yuan (about $3) and be compensated for up to 50 Yuan if clouds obscure moon-viewing between 8 p.m. and 12 a.m. on Sept. 19. The plan is being offered by Alibaba Small and Micro Financial Services Co. and Allianz Insurance China."

The plan's being offered in 41 other cities, as well, but at a higher premium. Still, this may be a true insurance bargain.

So if you're headed to China for this annual event, be sure to stop by the insurance counter (and bring a sweater).

Cavalcade of Risk #192: Call for submissions

Nancy Germond hosts next week's Cav. Entries are due by Monday (the 16th).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like). And please only submit if you are willing to link back to the carnival if your submission is accepted.

What a Waste of Time

For the last several months agents have been working on educating ourselves and our clients on the various administrative atrocities of PPACA. The latest one is the so called "Notice of Exchanges". The notice is a three page document that essentially all employers must provide all employees about the Health Insurance Marketplace. The notice is to "assist" people as they evaluate options for health insurance products they are being forced to purchase in 2014.

My guess is that I have over 40 hours put into developing a plan of action for distributing the notices to my clients. Even yesterday Hank and I were exchanging emails on this topic. On top of my time, many hours have been put in across our professional organization in determining and defining things like minimum value standard and affordability.

According to the original draft, the notice was supposed to be sent out by March 1, 2013, but then there was a delay. So, now the notice must be distributed no later than October 1, 2013. The DOL guidelines state that non compliance will result in a $100 per employee per day fine. So you can see why we have such a sense of urgency behind this matter.

This came September 11, 2013 at 4:55PM. In a frequently asked questions release the DOL determined that while the notice should be distributed there are no fines or penalties for failing to provide the notice. So in the course of a couple of months the government has gone from "we will fine you" to "meh, no big deal".

Just another one of our great government efficiencies...

Chickens, Roosting

Although the ObamaTax was heavily promoted by various unions, it appears that buyer's remorse is inexorably setting in:

"The AFL-CIO on Wednesday approved a resolution critical of parts of [the ObamaTax] ... The strongly worded resolution says ... will drive up the costs of union-sponsored health plans to the point that workers and employers are forced to abandon them."

Oh, methinks that ship sailed some time ago.

But not to worry, the new health insurance Exchanges will provide a safe landing for union members (and regular folks), so there's a silver lining.

Or maybe not:

"Obamacare is likely to have a "rocky" enrollment start on October 1 in some U.S. states, because of ongoing technology challenges facing new online health insurance exchanges"

Oh.

According to consulting firm Leavitt Partners (a Utah-based consulting firm that "has been involved in the design and development of some state exchanges and tracks exchange progress nationwide"), "not a single state appears to be completely ready" for the roll-out, scheduled to begin in less than 3 weeks.

And remember, final security testing has been put off until (literally) the last minute, so October 1st should prove, um, interesting.

Obama to blow up cost of Drug Plans

The problem we have when people like Obama and his apostles write sweeping reform is they have no clue how the system works which leads to all sorts of unintended consequences. We have a doozy of one coming.

Large Employers and self funded plans must comply with the out of pocket (OOP) cap. For 2014 they can have separate caps if, for example, an Rx plan is administered separate from a medical plan; in 2015 they must be combined. Currently that cap is $6,350 for an individual.

Lets look at a real world situation:  we have a client with a member taking Xyrem. It cost $9,000 per month or $108,000 per year. Plan has a 20% co-pay currently so the plan pays $86,400 and the member pays $21,600.

Except the member doesn't really pay $21,600. Like most Brand name drugs Xyrem has an assistance program, the manufacturer increases the price then refunds the member some portion of their liability. In this case the member pays $35 per month; that is correct, they only pay $$420.00 a year of their $21,600 co-insurance. The pharmaceutical company writes off the rest.

Under Obama's ingenious plan though, once we show the member was liable for $6,350 we need to start paying it at 100%. Now my client will be spending $101,650 per year. That extra $15,250, is pure profit to the pharmaceutical company. In Obama's world that apparently translates into affordability.

And for the member, their OOP for the year, thanks to Pharmaceutical games, is a whopping $35.

In case you think this is an isolated problem: while not all Rx cost this much, almost every brand name drug has a similar program.

Health Wonk Review - Big Data edition

The delightfully-named Tinker Ready hosts this week's round-up of wonky posts, with a major emphasis on the role of data, its collection and application. As always, you're sure to find something interesting and new.

Alphabet Soup Update: Why Local Matters

As we've noted time and again, having a local expert to administer Flex Spending Accounts and Health Reimbursement Arrangements is ideal. Our local gurus, FlexBank, just proved that again. Via email, they've tipped us to a little-known - but potentially major - option for groups utilizing Section 125 plans (so-called "POP Plans").

Premium-only plans are the vehicles by which companies make it possible for employees to pay their portion of health insurance premiums pre-tax. This can be a major cost-saver for both the employee and the employer. But there are rules for these plans, one of which is that mid-year changes are verboten (unless there's a "qualifying event").

The new Exchange policies, which many employees may wish to purchase, go into effect on January 1. If your employer has a calendar-year POP plan, no problem, you make the change. But what if your employer's plan isn't on a calendar-year basis? Some employees may elect to drop their current group coverage in favor of an Exchange-based individual plan, but that's not one of the recognized "qualifying events."

Until now.

Thanks to the folks at FlexBank, we learn that the folks in Capital City have heard those pleas, and are offering a one-time only "out" for employees in this situation. The IRS has stated that employers with non-calendar year based POP plans may amend them to allow employees to drop off of (or join!) these "cafeteria" plans effective January 1, 2014.

Good news indeed.

Another One (Thousand) Bites the Dust

As Nate noted some months ago, the Medical Device Tax has put a crimp in the medical R&D sector. The latest casualties of this component of the ObamaTax are the 1,000 soon-to-be-former employees of Michigan-based Stryker.

Adding insult to injury, the beleagured firm also owes Uncle Sugar some $100 million just from this year, and it's estimated to "cost the company fully 20 percent of its total research and development investments."

Train. Wreck.

9/11, 12 Years On

Seven years ago, we participated in the "Project 2,996" campaign to remember and honor those killed in 9/11. Today, on the 12th anniversary of that terrible day, we reprise our original post, to which I will append this prayer:

Baruch atah Adonai, dayan ha-emet ... Blessed are you, oh G-d, the righteous judge.

[Originally posted 9/11/2006]
As regular InsureBlog readers know, my better half has long maintained that “there are no coincidences.” That is, she believes that everything happens for a reason, although we may not be aware just what that reason is.

As for me, I’ve gradually become 90% convinced that she’s right on this (in everything else, of course, she’s 100% right). But one evening, a few weeks ago, that all changed.

I have a confession: My name is Henry, and I’m a news junkie. It is my habit to stay up way too late reading news blogs. Which I was doing several weeks ago, when I came across an item about one man’s extraordinary effort to harness the power of the blogosphere, in tribute to our fellow Americans who died in The Towers, exactly five years ago today.

The concept was deceptively simple: 2996 victims, 2996 blogs, each one remembering a single person. Bloggers were invited to sign up, and each was assigned – at random – one name.

Stop for a moment, and consider this: one blogger, reading one news item, decides it’s the right thing to do, signs up, and is assigned the name of a person he’s never even heard of, let alone met. We’ll come back to this shortly.

And so I was assigned the name of Jerome Robert Lohez, given a photo of him, and told the briefest of biographical information: age 30, lived in Jersey City, New Jersey.

That was it. A name, a face, a place.

The assignment was simple: On September 11, post his name and picture.

But I’m a news junkie, and that wasn’t good enough. I had to know more about Jerome. So I Googled his name (hey, why not?) and came across a site that CNN put together in December of ’01. It had pictures and names, of course, but I also learned that Jerome, born in France, married Dening Wu some three years before The Towers fell.

One month before The Towers fell, Jerome got his Green Card, and the happy couple flew to Europe to celebrate with his family. When they got back, two days before The Towers fell, Jerome told Dening “Only in New York do we have so much sunshine."

That was Sunday, September 9, 2001.

On Tuesday morning, he left for work. And The Towers fell.

And now we've come full circle: One. Random. Name.

Jerome didn’t just work in The Towers. He worked for Empire Blue Cross and Blue Shield. He worked in the insurance industry.

90% doesn’t cut it anymore.

Thank you, Jerome, for the lives you touched, the joy you brought, your love for New York and America, and for the privilege of paying you tribute.

Au revoir, Monsieur Lohez, au revoir.