Millions are Losing Their Health Insurance

"If you like your health insurance you can keep it," Barack Obama promised the voters on many occasions.
About 20,000 part-time employees of Home Depot recently found out how false that promise is. The company announced that it is ending its health insurance coverage for its employees and sending them to the new health insurance exchanges.
They will be joined by employees of McDonald's, Disney, CVS Caremark, Staples, Blockbuster, and many others.
A lot of these employers have mini med plans with limited coverage. McDonald's, for example, has a plan that limits health insurance benefit to $2,000 but gives employees the option to pay a higher premium and get $3,000 or $4,000 of coverage. At Home Depot, the coverage reaches $5,000. The state of Tennessee, under TennCare, used mini med plans with a $25,000 annual cap on benefits.
Mini med plans typically have no deductible. They usually charge a modest copayment for physician visits and drugs. But if a McDonald's employee goes into a hospital, the co-insurance rate is 30% and the plan's benefit cap will probably be blown right through after the first 30 minutes of admission.
These plans are being abolished under ObamaCare and if the employees end up in one of the new health insurance exchanges they will get subsidized insurance that will look very different. For one thing, the premium the employee pays will double and for many it will more than double. Then they will face, say, a $1,500 deductible for individual coverage. Surprisingly, if the employee goes into a hospital he faces a 20% copayment (comparable to the mini med plans!), but the total out of pocket exposure is limited to $2,250.
Now, which of these plans is better? For the orthodox health policy community, this isn't even a serious question. That's because they live in neighborhoods and associate with people who would never even consider buying mini med coverage. And, remember, imposing one's worldview on others is 90% of what liberalism is all about.
But would you be surprised to learn that there are many people who would find the mini med plan more attractive?
Let's begin by asking why anyone wants insurance. In every other field, the answer is obvious. Insurance protects assets. Life insurance protects the value of human capital. Fire and casualty insurance protects homes, cars and other structures. People are willing to pay a premium to transfer the risk of a financial catastrophe to others. The same should be true in health care as well. Health insurance is a way of protecting one's financial resources against the expense of a catastrophic illness.
But if you don't own a house, you have no need for homeowners insurance. If you don't own a car, you have no need for auto casualty insurance. Similarly, if you have no assets at all (other than your human capital) why would you want health insurance?
For low and moderate income households, the reason why mini med plans are attractive seems to be this: People living paycheck to paycheck have trouble maintaining a reserve for unexpected medical expenses. So as an alternative to personal savings and higher wages, they appear to be willing to take less in take home pay in return for a modest amount of health insurance.
Okay, all that is rational. But what would be irrational is to buy a health insurance plan with an unlimited benefit ? one that, say, is able to pay a $1 million medical bill. Why would you buy a million dollars' worth of coverage, if you don't have a million dollars of assets to protect?
In the modern era, a perverse idea seems to have dominated the health policy community. The idea is that the purpose of health insurance is not to protect assets. It is to provide access to health care.
That might make some sense if it were really true. But the fact is that we have made it extremely easy in this country to obtain health insurance after you get sick. More than 90% of all the people with health insurance are in a plan that cannot deny them admission because of a health condition. For the elderly and the poor, it's 100%. In saying what I am about to say, let me preface by saying that I am aware that there are many very, very bad studies claiming that health insurance saves lives, improves health, etc. But when serious scholars have looked at this question, the reasons to think that health insurance affects mortality or health status are few. If health insurance affects health at all, the effect is marginal.
So, back to the original question. If you are making say, $15, $20 or $25 an hour, the ObamaCare plan is unlikely to look very attractive. Yes, it provides catastrophic insurance, which the mini med plan does not. But if you have a catastrophic medical event without ObamaCare insurance, odds are that you will be able to rely on the social safety net ? uncompensated care or even Medicaid. And if that doesn't work, odds are that you or a member of your family will be able to sign up for an employer plan that pays full expenses.
People with modest incomes are going to need help from others if they have a catastrophic medical event. What's the best way of getting help? Is it by obtaining subsidized health insurance with high deductibles and high out-of-pocket payments? Or is it through obtaining help to pay medical bills after the event occurs?
Ironically, the very people that ObamaCare is designed to help may be the ones most hurt by its enactment.
But I am open to the possibility that I am wrong. So let's entertain a market test. Instead of abolishing mini med plans, let people choose between those plans and ObamaCare's mandated benefits. Let's give people what they want.

World Takaful Conference begins tomorrow

More than 400 key players and thought leaders in the global Takaful industry will be gathering on the 15th and 16th of April 2013 in Dusit Thani, Dubai, for the 8th Annual World Takaful Conference (WTC 2013), according to a press release from its organisers. Held under the theme “New Strategic Imperatives for the Takaful Industry: Sustaining Growth and Boosting Profitability”, WTC 2013 aims to set the stage for discussions that will strive to improve the competitive performance of Takaful players and will also seek to identify and capitalise on the new growth drivers for the global Islamic insurance industry.

Speaking ahead of the event, David McLean, Chief Executive of the World Takaful Conference, noted that “the global Takaful market has shown strong growth in the last few years. Driven by increasing consumer awareness and improvements in the quality of products and services being offered, the global Takaful industry has seen a significant increase in its market share. With tremendous growth opportunities yet to be fully tapped, the international Takaful industry is poised to enter a new phase of major growth in the coming years and therefore it is essential to ensure that strong foundations are in place to fully support this growth. A critical challenge facing the industry is that a large number of Takaful operators are finding it difficult to sustain financial performance due to the increase in competition. Though the overall outlook for the global Takaful industry remains positive, it is essential that the mounting challenges posed by increasing competitive pressures and declining underwriting profits combined with the reduction in investment income need to be immediately tackled so that the industry can maintain its exciting growth trajectory.”

McLean also added that “the Takaful industry, like any other growing industry, is facing a number of challenges such as balancing a growth drive with sustainable profitability, the need for skilled professionals, an enhanced regulatory and prudential framework and a deeper pool of Shari’ah-compliant investment opportunities all of which need to be urgently addressed.”

The World Takaful Conference 2013 will be officially inaugurated with a special opening keynote address by Jeff Singer, Chief Executive Officer of the Dubai International Financial Center Authority (DIFCA). Confirming his participation at the event, Jeff Singer said that “the global Takaful market has shown strong growth over the last few years. The key factors underpinning this growth include the development of supporting regulatory frameworks, favourable demographics, growing affluence, the growth in organized savings and the overall development of the international Islamic finance industry resulting in greater availability of Takaful and Islamic finance products that meet the needs of end-users. However the key challenges for the global Takaful industry remain efficiency, profitability and scale. In order to ensure the long term stability of the global Takaful industry, it is essential to find innovative solutions to manage the challenges of an increasingly competitive Takaful market, drive operational efficiencies and improve the financial performance in the industry.”

He also said that “the theme for this year’s World Takaful Conference (WTC 2013) - “New Strategic Imperatives for the Takaful Industry: Sustaining Growth and Boosting Profitability” is important and timely as the Takaful industry globally is evolving rapidly and there is tremendous growth potential.”

“I am delighted to be a part of the debates and discussions at the 8th Annual World Takaful Conference (WTC 2013) in Dubai that will seek to achieve the full potential of the global Takaful industry”, he added.

The inaugural session will be immediately followed by a keynote plenary session featuring Zainudin Ishak, Executive Director & Chief Executive Officer of HSBC Amanah Takaful (Malaysia) and Chairman of the Malaysian Takaful Association; Chris Wei, Group Chief Executive Officer of Great Eastern Holdings Limited; Hussein Al Meeza, Managing Director and Chief Executive Officer of Dubai Islamic Insurance and Reinsurance Company (AMAN); and Parvaiz Siddiq, Chief Executive Officer of Noor Takaful. The session, which will analyse new strategies for sustaining growth in the global Takaful industry, will address the challenges of slowing growth rates and competitive pressures and will assess how Takaful operators can effectively manage the shift to profitability.

A key highlight of the 8th Annual World Takaful Conference (WTC 2013) will be the exclusive industry leaders’ power debate featuring an exceptional cross-section of international thought leaders in the global Shari’ah-compliant insurance industry. The session chaired by Irshied Tayeb, Regional Head of Insurance Services - Middle East & North Africa, Bin Shabib & Associates and featuring Dr. Bassel Hindawi, Immediate Past Insurance Commissioner of Jordan;  Shahril Azuar Jimin, Senior Executive Vice President / Chief Commercial Officer of Maybank Ageas Holdings Berhad; and Azim Mithani, Chief Executive Officer of Prudential BSN Takaful Berhad, will discuss practical solutions to overcoming the key obstacles to the further development of the global Takaful industry.

Featuring ground-breaking original research insights, WTC 2013 will also include the exclusive onsite launch of the Global Family Takaful Report 2013 and the World Islamic Insurance Directory 2013. The Global Family Takaful Report, developed by Milliman, will provide research insights into the performance of Family Takaful offerings, the future direction of the market and new opportunities for the growth of Family Takaful across key international markets, while the World Islamic Insurance Directory, jointly published by Takaful Re and the Middle East Insurance Review, will provide a snapshot of the global Takaful scene, with an insight into financial and management data of Takaful and Re-Takaful operators in key markets.

Speaking ahead of the launch of the Milliman Global Family Takaful Report 2013, Safder Jaffer, Managing Director & Consulting Actuary - Middle East & Africa, Milliman, noted that “with global family Takaful contributions currently estimated at US$2 billion, Milliman projects a 260 per cent increase within the next five years to US$5.2 billion. At a global level, the growth in Family Takaful continues to outweigh the growth observed in both general Takaful and conventional life insurance.”

“Following the successful launch of the first ever Milliman Global Family Takaful Report 2011, the feedback we got from practitioners was overwhelming and consistent –the industry needs to distinguish ‘Family Takaful’ from ‘General Takaful’. Whereas General Takaful is still exploring avenues to find its feet in the market, the success of Family Takaful has been solid particularly in South East Asia”, he said.

He also noted that “the 2nd Milliman Family Takaful report provides an update of  the overall market trends, a specially focused insight into the developing Indonesian market, which has witnessed significant growth in Family Takaful during recent years, and a focus on distribution in key Takaful markets in the Middle East and South East Asia. We are delighted to be launching this report at the 8th Annual World Takaful Conference (WTC 2013) and we look forward to discussing the findings of the report with the international industry leaders at WTC 2013.”

WTC 2013 will feature more than 35 leading industry partners and exhibitors showcasing their latest innovations at the World Takaful Exhibition organised along the sidelines of the conference. The exhibition will be officially inaugurated on the 15th of April.

Commenting on their participation at WTC 2013, Christian Gregorowicz, Chief Executive Officer of NEXtCARE said that “the global Takaful industry has shown strong growth in the last few years, with many new market entries, and has seen a significant increase in its market share in key countries, backed not only by increasing awareness and improvements in the quality of Shari’ah compliant products, but also with the a growing demand of Islamic financial solutions. To realize its full potential, it is essential for the Takaful industry to ensure long term operational and technical profitability. The way forward for leading operators is to focus on improving operational efficiency which will contribute towards enhanced financial performance.”

“We are delighted to be supporting the World Takaful Conference 2013 and we hope that the discussions at this key industry event results in identifying strategic initiatives that the industry must adopt to build on and sustain its long term growth", he added.

Ten Tips for Buying the Right Insurance in 2013

Most people buy insurance the wrong way. They buy it piecemeal. They buy a little bit of this here and a little bit of that there. They buy too much in some areas and not enough in others. Then, when there is a serious claim, their insurance coverage often fails them. If your New Year's resolution for 2013 is to fix that, we have some tips that can help you accomplish it.

Homeowners insurance

Tip 1: If Hurricane Katrina wasn't reminder enough, along came Superstorm Sandy in 2012 to remind everyone that homeowners policies do not cover flooding. The policies cover those homes destroyed by fire, and homes damaged or destroyed by a storm. But they do not cover flooding. If you are exposed to any chance of severe flooding, even if you don't live anywhere near a body of water, talk to your agent about flood insurance and check out the government flood insurance website at FloodSmart.gov.

Tip 2: If you work from home even part time, you need to add an endorsement to your homeowners insurance called "incidental occupancy endorsement." Homeowners policies, besides covering your building and contents, also cover personal liability, including liability for guests injured on your home premises. But they do not cover injuries to those who come onto your premises for business purposes. That includes not only businesses that have regular visitors to the home -- such as yoga instructors, piano teachers or day care providers -- it also includes injuries to the occasional visitor, such as a co-worker or delivery driver who's dropping off some work from the office and falls on your icy driveway in the winter and gets injured. No coverage. How much does it cost to add this nifty endorsement? Less than $30 a year. For that small price, it's silly not to have one.

Tip 3: Speaking of liability coverage, be sure to standardize your liability limits on all your policies -- auto, home, cabin, boats, etc. I recommend no less than $500,000. Remember, if you injure someone seriously, you will get sued for all the medical bills, for the lost wages they incur, and for pain and suffering.

Just the medical bills alone can easily reach $500,000 in a serious accident. If you have any income or assets that you are concerned about losing in a lawsuit, add an extra layer of protection on top of your basic policies in your insurance portfolio -- called an umbrella policy -- of at least $1 million or more. A $1 million policy costs about $200 a year. I consider it the best buy in the insurance business.

Car insurance

Tip 4: Most people are underinsured for lawsuits. The most common limit I see is $100,000 per person. That won't even cover the medical bills in a serious accident. The minimum liability coverage that anyone with any assets or income to protect should be carrying is $500,000 to $1 million or more. If your liability limits are low, contact your insurance agent right away and get those limits raised to more realistic figures. Raising liability coverage is surprisingly minimal in cost.

Tip 5: When you raise your liability limits on your car insurance, don't stop. Raise your limits on your home, cabin, boats, snowmobiles, etc., to the same amount. You don't know where the lawsuit may come from. You want the same amount of money protecting you, so it won't matter where it comes from.

Tip 6: Raise your uninsured and underinsured motorist coverage on your car insurance to the same levels as your liability coverage for people you hurt. It's estimated that 10% to 20% of all drivers have no insurance. I guarantee you that these are not the drivers with perfect driving records. Since we can't control who hits us or how much insurance they have or don't have, buying high limits of this coverage is the only way we can ensure that we and the loved ones riding with us get fairly compensated.

Tip 7: Save money by dropping collision and comprehensive coverage of older vehicles you can comfortably afford to replace without car insurance. Make sure you save enough money to make it worth the risk.

Save money on insurance by self-insuring more of the small losses on your vehicles with bigger deductibles. Not only does it save money, but it also reduces the number of small claims you file, thus keeping rates as low as possible now and in the future.

Life insurance

Tip 8: Remember that buying life insurance is an act of love. It's the only insurance policy that you can buy where you are not collecting on it. For a family of four, financial experts recommend that survivors of one parent's death make do with 7.5 times income. I recommend 10 times income. The extra cushion will allow the surviving parent to work fewer hours and spend more time with his or her children. Nothing can replace the emotional loss to the family. Don't compound the pain by adding financial stress to the picture.

Tip 9: For a young family getting started financially, I recommend term life insurance as the most cost-effective way to provide the most money for the lowest premium. Lock in the price for at least 20 to 30 years. And make sure the policy is convertible to a permanent policy, so if at the end of the term you find that you still need life insurance and can't qualify for it medically, you are assured you can convert.

If one spouse is a homemaker, carry at least $250,000 to $500,000 in life insurance on that person. Buy an amount high enough so the surviving working spouse can be more available to the children and still hire replacement services such as a nanny.

Tip 10: It's quite common for employers to provide some life insurance for their employees as a company benefit and at the same time offer them supplemental group life insurance on a payroll deduction basis. What most people don't realize is that the costs for the supplemental life insurance are quite a bit more than a healthy nonsmoker will pay on the open market for the same amount of coverage. The tip here is to not just buy group life insurance because you assume it's cheaper. It probably isn't. In addition, when you leave the company or the company closes down, so does your life insurance.

Sri Lanka give 'IPL' Malinga insurance for future?

Sri Lankan cricket selectors have shown they lack foresight by appointing Lasith Malinga as deputy to Angelo Mathews who was named as the team's Twenty20 captain.
Mathews was an automatic choice having served as deputy to Mahela Jayawardene who stepped down after the World Twenty20 final.
"It’s a good time to bring in a new captain who can ease into the job and quietly take control of the team," former Sri Lankan cricketer Russel Arnold wrote in his column in islandcricket.lk, while talking about Jayawardene's resignation.

"In the T20 format, Sri Lanka can start looking forward to the 2014 World Twenty20 and build a team in that format. The new man can be groomed slowly to learn the pressures of the game and be allowed to grow into the role. At the end of the day, Test cricket is the tougher challenge, so some experience will always help for the future.
"I see no other candidate other than Angelo Mathews for the job."
Although chief selector Ashantha de Mel also hinted they were considering forming a separate T20 squad with an eye on the next World Cup in 2014, they have opted for experience by giving Malinga a leadership role.
Malinga has been a great servant of Sri Lanka cricket but the 29-year-old pace ace he certainly doesn't represent the future.
Big-hitting all-rounder Thisara Perera would have been a better choice since he is 23 and has many more years of cricket left in him.
After Sri Lanka's batting imploded during the World Cup Twenty20 final against West Indies, even De Mel suggested that in future he would plonk for batsmen who could sixers.
Perera fits the bill perfectly for the truncated version of the game because of his ability to clear the ropes easily as an impact.
World Cup winning West Indies captain Darren Sammy also affirmed that Twenty20 was increasingly becoming a batsman's game.
Perera has become a vital cog in Sri Lanka's one-day and Twenty20 team which goes in his favour unlike the other two prospective candidates for the vice-captaincy Jeewan Mendis and Dinesh Chandimal.
Picking Malinga goes against the grain of thinking of grooming a young T20 side for the future.
He represents the failed past and is likely to be an unpopular choice of Sri Lankan fans angered by his affinity with the IPL (Indian Premier League).
Having retired from Test cricket to prolong his career because of a knee injury, Malinga's prima donna attitude on the field has not gone unnoticed.
He even angered a Sri Lankan fan in Dubai when they were here for the series against Pakistan who was ignored completely when he sought an autograph after bumping into him in a shopping mall.
Are the selectors giving him insurance by appointing him as vice-captain for one year?
Arguably his skills are on the decline, even allowing for the fact that he had a bad day in the office during the World Twenty20 final.
"The year 2012 hasn’t been particularly happy for Malinga. There have been a number of highs for him, but there also have been occasions where he has been taken to the cleaners – something that was considered impossible at a point in time. It wasn’t the number of runs he conceded, but the manner in which he was demolished by some of the batsmen was astonishing," wrote cricket analyst Nishad Pad Vaidya in cricketcountry.com website.
"It is baffling that a bowler of Malinga’s calibre has conceded runs at such a haemorrhaging rate on four occasions in ODIs this year. To concede over 70 runs in a ten over spell is expensive in the fifty over game and there have been instances where he has breached that mark without completing his quota," he added.
His decline began when India's Virat Kohli took him to the cleaners.
"Malinga’s expensive burst came back to haunt Sri Lanka at the worst possible time – the final of the ICC World T20 2012," he pointed out.
Malinga finished with figures of 4-0-54-0 having conceded 50 runs in the last three overs.
"In hindsight, that was the difference between the two sides as Sri Lanka collapsed under the pressure and all the good work put in by the other bowlers was in vain," summed up Vaiyda.
Malinga may be the second highest wicket taker in the T20 format and the darling of Mumbai Indians, but the question is whether he is still a potent force for Sri Lanka to appoint him vice-captain.

John Cleese: Why I love having insurance

John Cleese: Why I love having insuranceMy dad was an insurance salesman. He started in Bristol when he left school at 15 and then, after fighting in the First World War, sold marine insurance in Bombay, Hong Kong and Canton, until he returned to Somerset in 1924 to work for a big company called Guardian Assurance. Every year, he sold more life insurance than anyone else in the company. The reason for his success? He was a kind and decent man and all the solicitors and bank managers in Somerset liked and trusted him. So if one of their clients needed insurance, they'd say: "Oh, give old Reg Cleese a call. He won't try to sell you too much."  As a result, I grew up with the unquestioning belief that insurance was a "good thing," and this was long before I realized how unpredictable life was. Robin Skynner, the psychiatrist, once said to me: "People always think things are going to go according to plan, despite their lifelong experience that they never do." One business guru advises us to "expect the unexpected," thus proving himself a complete prat since the moment you expect the unexpected, it ceases to be unexpected. It is now expected, and so becomes exactly what you are expecting. On the contrary, the frustrating thing about the unexpected is that, there you are going along, expecting the expected, and things are happening just as you expected, and then, just when you least expect it, it happens. It's an alarming thought and the only way to sleep at night is to get insurance. Or so I've always believed.  Take last January for example. My lovely then-girlfriend-now-wife and I were on holiday for a week. And at that moment, all that mattered was that we had a week together. We arrived in our room and there in an ice bucket was a bottle of champagne. We settled on the sofa, I took the bottle, removed the foil and gently unscrewed the wire securing the cork. As I put the wine on the table and turned to the bottle to ease the cork free, it shot out of the bottle at the speed of light and right into my eye. There was blood everywhere, because as it turns out, my eyebrow had been cut by the wire in the cork. Thank God, it hit my eyebrow, not my eyeball.  Never before had I seen a cork shoot out of an ice-cold, completely unshaken bottle of champagne without a little help from my thumbs. There was no way of anticipating what happened. But, I had a broad-ranging, personal-injury-while-travelling-abroad policy with no champagne-cork exclusion. So if the cork had struck an inch lower, at least I could have had my eye mounted properly.  And so, I love insurance! Especially if I am travelling in the United States of America, where becoming a doc-tor is a quicker way to inconceivable wealth than starting a hedge fund. Tom Lehrer, the U.S. satirical song-writer and mathematician, once told of a friend who entered medical school to study "diseases of the rich."  My experience of American doctors came early, in 1965. I was touring in a musical called "Half a Six-pence" with Tommy Steele. I woke up one Sunday at 5 a.m. with a terrible, agonizing toothache. Some-how, I found a dentist in Boston who was prepared to see me. I shook his hand, sank into the dental chair with a cry of relief and pointed to the offending molar. He examined it and embarked on an exploration of the rest of my dentition, making many disparaging noises as he completed the tour. He later explained that X-rays were going to be necessary. I agreed, they were taken, and after a prolonged period of study, he outlined a course of treatment involving crowns, bridges, root canals and so on. Finally, he shook my hand and informed me we could start at 10 o'clock on Tuesday morning.  Incidentally, it is not widely known, but several of the most notorious pirates who operated in the Caribbean had excellent American medical qualifications. For this reason, if you are travelling abroad, and especially if you are visiting the U.S., you should take out appropriate medical insurance.  A final thought: I wish insurance companies would offer a policy that would cover me in the event of my forgetting to take out a policy. That would bring real peace of mind.  John Cleese is an English actor, comedian, writer and film producer known for his work with the comedy troupe Monty Python and the British sitcom Fawlty Towers. In B.C., he can be heard on the radio in ads for Pacific Blue Cross, B.C.'s largest provider of health, dental and travel benefits. He wrote this as part of that campaign.