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Walt Bernard Podgurski,  Editor,  440-773-1108, 

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Editorial Mission Statement: The goal of this publication is to provide readers a broad selection of what is being written about the insurance industry and related issues. Some articles may have a “tilt” towards a particular perspective one way or another. Inclusion in this newsletter is not an endorsement of any views or content; but report the various and differing views appearing in media.
  Daily Insurance ReportMonday, 05/21/18

Vermont legalizes importing cheaper Canadian drugs, needs federal approval
By Jen Christensen, CNN
Vermont is the first state in the country to pass legislation that could allow the importation of less-expensive prescription drugs from Canada.
Republican Gov. Phil Scott signed the bill Wednesday morning. It was approved by the Legislature with bipartisan support.
"The price for many drugs, especially specialty drugs, has gone sky-high," said state Sen. Virginia Lyons, a Democrat who co-sponsored the bill. "We've found that drugs from Canada are very safe and the equivalent of FDA-approved, and we could keep our costs down by having our own wholesale importer and allow our people to buy at this reduced cost. It's about time that happened."
Vermonters wouldn't get access to the reduced-cost drugs right away. The law directs the state Agency of Human Services to design a workable program. The drugs would also have to meet the US Food and Drug Administration's safety and effectiveness standards, and they would have to be the ones that "generate substantial savings for Vermont consumers."
Once the drugs were imported, the law would not allow the state to sell them to other states.

Trump Opts for a Baby Step in the Drug Cost War – Not the Expected Leap Forward
Craig Hasday, President of EPIC Northeast Benefits and President of Frenkel Benefits
Last week President Trump released his long-awaited “American Patients First” blueprint on attacking out-of-control pharmacy costs. Unfortunately, it’s more of a whimper than a roar. If the regulations are effectively written to support my understanding of the President’s intent, the incremental steps forward were not horrible, they are just not bold enough.
Drug manufacturers will have to disclose the cost of drugs they advertise. The shock value of this will be eye-opening and may impede manufacturers who have been gouging consumers with their outlandish pricing strategies.
And Medicare will be allowed to use some of the cost control measures that employer-based plans implemented long ago. Medicare would now be able to eliminate the onerous two-drugs-for-each-condition minimum and the six sacrosanct therapeutic class categories, such as cancer and HIV/AIDS, where every available drug had to be covered. With these policies eased, at least the government will be able to put up their dukes to fight the manufacturers’ ridiculous cost demands. Medicare will also be allowed to develop policies to encourage dispensing drugs in the most cost-efficient setting (e.g. a doctor’s office instead of hospitals)
Multi-source drugs will be available sooner as manufacturers will be limited in their ability to use federal safety program rules to extend drug patent lives.
But, surprising to me, is that employer plans would not get much relief at all from the President’s plans. Although there was smoke blown at drug rebate practices, it seems that the President took it easy on rebates, which in my view are a legal kickback scheme that creates unfair incentives and contributes to an opaque pricing system. And trying to pressure other countries to not negotiate as hard on drug costs is almost laughable.

Hundreds of companies are now paying off their employees' student loans
Annie Nova / CNBC.COM
Around 70 percent of college graduates are in debt today. The average person leaves school $30,000 in arrears, and many owe more than $100,000.
Hundreds of companies are now offering student loan assistance to their workers.
"It's as meaningful to recent graduates as 401(k)s," said Meera Oliva, chief marketing officer at Gradifi, a Boston-based firm that designs student loan repayment programs for companies.
Student loan assistance, which started as a niche offering by a handful of companies, is finding its way into the mainstream menu of workplace benefits.
"This is certainly emerging as a new and very important benefit," said David Pratt, a professor at Albany Law School who studies employee benefits.
This year, Fidelity began to offer businesses a way to contribute to their workers' education debt. Since then, more than two dozen companies have signed up and it expects that number to double by the year's finish.

High Deductible Health Plans are the Worst Strategy in Health Care
Julien Emery
The most common response to rising healthcare costs, over the last 8+ years, has been to raise the out-of-pocket liability for employees (deductible + out-of-pocket-max)...and it’s a giant, counterproductive mistake.
The graph below demonstrates how the rise in deductibles has outpaced growth in both premiums and wages. Relying on high deductible plans to mitigate those rising premiums puts undue financial strain on employees and leads to worse health outcomes.
Conventional wisdom tells us high out-of-pocket costs will appeal to a person’s sense of frugality and consumerism and lead them to make smarter healthcare decisions because of “skin in the game.” The unstated and widely unmet requirement, however, is available cash flow to actually purchase healthcare when the need arises. the math in its simplest terms is this: if a person’s personal savings is less than their deductible, they’re not going to get the healthcare they need to remain healthy. They are going to defer care rather than invest in their health and this will lead to higher costs down the road and cause problems for everyone.
The math in its simplest terms is this: if personal savings is less than the deductible, they’re not going to get the healthcare they need when they need it.
The average American under 35 yrs old has less than $2,000 savings in their bank account and 57% of all Americans have less than $1,000 savings. Compare this to the avg out-of-pocket liability on an employer-sponsored plan for single employee coverage ($3,822) and on the federal marketplace plans ($6,909). This gulf, between the average savings and the amount of money a person needs to spend before insurance kicks in, is causing people to defer the care they need.

Fixing a key piece of the health care puzzle
So why then do the costs of medical procedures and treatments remain a mystery? Prices are available for almost everything else except when it comes to our own health care. Patients are required to know the risks before consenting to any given medical procedure but are often forced to make significant decisions about their health care without any idea of the cost. Anyone who has ever tried to decipher a medical bill understands how powerless its complexity can make you feel.
Our bipartisan legislation, the Transparent Health Care Pricing Act of 2018, aims to change this by requiring public disclosure for costs of products, services, and procedures. We believe patients should have the information they need in order to make informed decisions about their health care—and research shows Americans want to know more about how much their health care costs. A national survey by the nonpartisan organization Public Agenda found that 63 percent of Americans don’t believe there is enough information about how much medical services cost.
There are a variety of proposals to improve our health care system, but price transparency is one of the ways to address a core problem – rising health care costs. Americans spent a total of $3.3 trillion on health care in 2016 – an average of $10,348 per person. That’s a significant amount of money for the average American family, and yet many of us don’t know the breakdown of expenses or have a choice of spending less on one procedure, or more on another. Moreover, the same or a similar procedure can cost dramatically different prices for no apparent reason.

Texas Democrats look to single-payer in congressional races
Democrats hoping to wrest congressional seats away from diehard repeal-and-replace Republicans are campaigning on an unlikely issue for Texas — single-payer health care.
Across the country, many Democrats are trying to minimize internal battles on health care. But Democrats in this deep red state have also watched closely races where single-payer advocates have upset centrist primary opponents. And some believe that moving left on health care will mobilize new voters in primaries —and offer a shot at winning come November.
More than half the 22 Democratic House candidates competing in the Texas primary runoff next Tuesday openly tout their support for single-payer health care.

Tax Tips: IRS begins notifying companies of lapses in Obamacare compliance
By PETER A. DEMARCO / CRAIN'S Cleveland Business
Despite hopes in some circles that the Affordable Care Act would go away under a Republican administration and Congress, its requirements and filing deadlines endure.
The Internal Revenue Service is actively reminding companies of that fact as it begins issuing notices where it sees noncompliance, even assessing penalties in some cases.
After allowing companies a few years to learn and adapt to the requirements of ACA, the IRS began issuing notices in November 2017 about compliance problems for the 2015 calendar year. These notices focused on instances where companies did not meet their obligations with respect to the employer shared-responsibility payments for 2015.
Companies with fewer than 50 full-time employees, or the equivalent in some combination of full-time and/or part-time employees, are exempt from penalties, but those companies need to monitor their status closely; passing that threshold and failing to comply can lead to stiff penalties ultimately.
Companies that exceed the 50-employee standard are considered "applicable large employers," and they are required to offer employees health coverage or pay a penalty. That's the employer shared responsibility payment that has become the focus of IRS enforcement notices and penalties.
In addition to providing coverage or paying a penalty, companies also are required to report coverage to the IRS so it can more easily monitor compliance. Those reports first became required under the law in 2016 for the 2015 tax year.

Marsh, Munich Re & Metabiota launch parametric pandemic insurance
by ARTEMIS on MAY 21, 2018
Global broker and risk consultancy Marsh has launched PathogenRX, an insurance product designed to protect businesses against pandemic risks such as the outbreak of infectious diseases, that utilises a parametric trigger provided by epidemic risk modeling specialists Metabiota and capacity from reinsurance giant Munich Re.
The impact of infectious disease outbreaks and other pandemics can be significant for businesses, ranging from direct impacts to extensive business interruption, which makes a parametric triggered event definition and risk transfer solution, backed by global reinsurance capacity a valuable product for corporate risk managers.
Of course this also meets the mandate of the major reinsurers such as Munich Re, bringing their reinsurance risk capital direct to the corporate market through such arrangements, while also helping to narrow an evident gap in traditional re/insurance protection.
Marsh said the solution can help to minimise financial losses caused by the outbreak of pandemics, citing the PathogenRX product as the “world’s first integrated risk solution for measuring and protecting against economic impact of infectious disease outbreaks.”
The insurance product will be offered to U.S. based companies, but can also protect their global operations as well. An attractive prospect for corporate risk managers for whom the impacts of epidemics and pandemics could be significant.

77% of People Aren't Taking Full Advantage of Social Security
If you're not sure which age you want to start claiming benefits, it's time to figure it out.
Katie Brockman /The Motley FOol
For most people, Social Security is a lifeline in retirement -- in fact, for 61% of beneficiaries in 2014, Social Security benefits made up at least half of their retirement income.
However, despite depending so much on Social Security, the majority of beneficiaries don't fully understand how it works. The age at which you claim benefits will affect how much you'll receive each month, yet only 23% of workers actually try to maximize their lifetime benefits by planning the age at which they claim Social Security, according to Employee Benefit Research Institute's 2018 Retirement Confidence Survey. Furthermore, only around half of employees have even considered how age affects the amount they'll receive in benefits.
The age when you start claiming benefits will affect how much you'll receive each month for the rest of your life -- so it's a pretty important decision that shouldn't be made on a whim.

Long Term Care Insurance Premiums Tax Deductions
Insurance & Estate Strategies
For most people, when there is a tax incentive out there, it pays to pursue it if it makes sense for your situation. Anyone considering long-term care insurance costs would want to also determine if there are certain tax benefits to the plan to help reduce the overall cost of the plan.
Premium payments for tax-qualified LTCI policies are deductible as medical expenses under federal income tax rules (and in a few states), though the total amount of the deduction is subject to age-based caps.(3)
For most individual returns, the taxpayer must itemize his or her deductions in order to deduct the LTCI premiums. That is, the deduction is usually not available if the taxpayer claims the standard deduction.
Assuming the taxpayer itemizes, LTCI premiums will be deductible to the extent the premiums, when added to all other non-reimbursed medical expenses, exceed 7.5% of the taxpayer’s adjusted gross income (“AGI”). The 7.5% threshold is scheduled to increase to 10.00% beginning with the 2019 tax year.(4)
As discussed below, self-employed taxpayers and certain business owners can deduct LTCI premiums “above-the-line” as a self-employed health insurance expense, and the deduction is therefore not subject to the income threshold.


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Walt Bernard Podgurski - - Editor