Monthly Archives: August 2013

Changes Ahead in the Affordable Care Act

We are moving along toward implementation of the Affordable Care Act with more activity starting on October 1 and implementation of other provisions kicking in on January 1, 2014.  Between assaults on the whole program from conservative politicians and the difficulties the government has had in trying to implement a massive social program there are still plenty of questions about what is happening.  Some of the criticism of the Act is difficult to understand.  The provision that is about to kick in this October is the opening of the Health Insurance Exchanges.  The concept of health-care exchanges to foster competition and create a private insurance marketplace were based on a proposal by the conservative Heritage Foundation and tested in Massachusetts under Republican governor Mitt Romney.

While the jury is not in yet, it appears they are going to work more or less as advertised – by both conservatives and liberals.  We posted on this blog a month ago on the early indications for competitive pricing for Washington health insurance and while the savings may not be as robust as other states, pricing seems to be at or below previous prices.  Another aspect of the Act that has received a lot of objection is the “individual mandate” to buy insurance coverage.  Some pundits have pointed out – a little unkindly – that individual mandates and subsidized premiums was a conservative argument when the alternative was a single payer system like Medicare.  And, mandates are not uncommon, as 49 states require motor vehicle owners to purchase liability insurance under much the same theory – that everyone ought to be required to share the risk.  
In Washington State, we are gearing up for the opening of the health insurance exchanges.  The state is beginning to advertise the existence of the exchange in particular to convince young and healthy people to participate.  The participation of these low risk groups will be key to keeping insurance premiums as low as possible.   

The state, which is operating its own exchange, has established a website with tools and information that will help individuals understand and plan for the law which is scheduled to go into effect with a lot of its major provisions in January 2014.  You can go to the website today at  to find information and to use tools like a calculator to estimate costs and eligibility for financial support.  The go-live date for the Health Exchange Call Center is September 3 with open enrollment in insurance plans beginning October 1, 2013 and continuing through March 31, 2014. 

Another major provision of the Act is scheduled to kick in on January 1, 2014.  As of that date, it will be illegal for health insurance companies to deny insurance to anyone with a pre-existing condition or charge that person any more for health insurance than they would any healthy person.  This provision has already been in force for children with pre-existing conditions and insures they will be covered under their parent’s coverage as part of family coverage. In January 2014 this provision is extended to everyone.   

Although the Affordable Care Act still has plenty of detractors, it has survived attempts to repeal and overturn it.  There are still plenty of questions about both its implementation and whether or not we will be successful in enrolling enough young, healthy people to spread the risk and whether there will be abuse of the pre-existing conditions provisions by those who might wait until they are actually sick to purchase insurance.  It does appear that the prospect of near universal coverage is having some impact on lowering premiums. 

We will keep an eye on these developments here at Homer Smith Insurance and keep you informed as we learn more.  

Job Tenure and Unemployment

There’s always something interesting going on over at if you like numbers.  Earlier this week they posted a list of the average tenure on jobs for a number of countries.  Average tenure for labor statistics types means how long any one person stays on a job with one employer.  It may not surprise you to know that US workers have the shortest job tenure when compared to the developed countries of Western Europe and Canada.  In fact, not only are we in the lead – if that is the right way to describe it – the US job tenure is less than half that of Britain, the next shortest tenure on the list.  On average, US workers spend 4 years on a job with the same employer compared to 8.25 years in Britain and a whopping 13 years for Greek citizens.  Since Greece has been in the headlines this past year for its economic problems, a short tenure may not necessarily be a bad thing.   

The length of time people stay with one employer varies with factors like age, sex and public sector employment versus private sector.  In general it looks like tenure for women has been increasing while tenure for men has been decreasing.  Older workers have had a longer average tenure as well and the longest tenure is for women aged 55 to 64.  Their average tenure rose from 7.8 years in 1963 to 10 years in 2012.  This may reflect the changing nature of women in the workforce as more women actively pursue careers.  Also, while it is tempting to believe that people used to work for one company their entire working life and retired with a gold watch; not so much.  We have a big country and there has always been a steady change in the employment picture that seems to condition job movement.  

With the recent recession a lot of attention has been focused on home ownership and unemployment rates.  Articles on home ownership have lamented the decline in home ownership which went from an all-time high of 69.2% in 2004 to the lowest rate since 1997 – 65.4%. More recently though, economists have been looking at the relationship between home ownership rates and employment and discovering that higher rates of home ownership are related to higher levels of unemployment.  The conventional explanation is that home owners can’t easily pick up and move to seek employment.  This explanation is reinforced by findings from a Pew Research survey that found most Americans have moved to a new community at least once in their lives and those who move most frequently suggest that it was for economic opportunity.  

Washington State and the west in general seem to have benefited from the national predilection for movement.  Older Americans in the West are more likely than those who live elsewhere to have moved at least once in their lives. Over thirty percent of older adults in the South say they have lived in the same community all their lives and the figures in the Northeast and Midwest are even higher at about forty percent.   Only 23% of Westerners 62 and older have lived in their current community their entire life.   

Here in our community we have the full range of experience with national movement and job tenure.  The Olympic Peninsula is experiencing a significant migration of people coming to our area for its natural beauty and active lifestyle.  At the same time, we here at Homer Smith Insurance have been around since 1950 and our experienced personnel have a lot more than four years on the job.  If you need insurance advice, give us a call, we are here to help. 

The Faces Of Insurance Fraud

“Yes, as through this world I’ve wandered
I’ve seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.”

Woody Guthrie, Pretty Boy Floyd

Woody’s song came to mind when we saw the report last week that Byron Frisch, a former professional football player was being charged in a $50 million insurance fraud scheme.  Frisch was accused, along with four other people, of providing false information to obtain more than $50 million worth of life insurance policies for people who were not qualified for the insurance or able to pay the premiums.  The group apparently recruited elderly individuals to apply for “free” life insurance policies that had million-dollar death benefits, and then submitted phony applications with false information.  The policies were then “packaged” and sold to investors – presumably like mortgage securities.  The payoff came when the elderly insured’s died and the group collected the benefits.  Frisch was a financial adviser and several of his co-conspirators were attorneys. 

The story, and Woody’s song, reminds us that there is no one face of criminal activity and especially, no one face of insurance fraud.  On the face closer to six-guns, comes a report from Las Vegas that members of the Vagos Motorcycle Club have been indicted for reporting a motorcycle stolen and collecting the insurance money.  Their attempt at fraud was a bit more direct than Frisch and Company.  They hid a Suzuki motorcycle belonging to a prospective gang member so he could report it stolen, and then collected a settlement of nearly $7000 which was used to purchase a Harley Davidson – the “official” club ride.  The scam was not too difficult to uncover; the perpetrators hid the Suzuki at the home of a Las Vegas undercover police officer. 

The same week as these two stories saw a personal injury lawyer in Bridgeport, Connecticut charged with masterminding a fraud scheme involving an unlicensed doctor and several chiropractors.  This group conspired to exaggerate injuries and submit bills for unnecessary medical care to pump up the costs of claims and create larger claim settlements.  They managed to gain $2.5 million in settlements before being caught.  The good news is their crimes turned out to be a federal offense and in addition, the insurance companies are bringing suit against them.  

And, just to prove that perfidy is not confined to men, we saw the case of the California woman charged with setting fires to collect $128,000 in insurance money.  The lady is looking at 35 felony charges for setting five fires and defrauding insurance companies.  She is accused of fraudulently claiming lost, stolen, or damaged items including several large flat screen TVs, multiple Apple computers, diamond earrings, gold jewelry, several Gucci bags, a wine rack, dog stroller, and several designer clothing items and handbags. According to the prosecutors, the woman set fire to her homes in Rancho Santa Margarita and Aliso Viejo an apartment in Laguna Niguel and her Volkswagen Passat.  Just to sort of frost the cake, she is also accused of over $85,000 in housing, welfare, and MediCal benefits fraud.  If convicted on all charges, she could serve 41 years in prison. 

It isn’t so much that we are interested in running a police blotter here, it is really to remind people that the insurance industry is a really big target for fraud and while it may seem a big deal if someone is getting away with a little white collar crime, it is a crime that hits us all right in the pocketbook.  The Washington state Insurance Commissioner reports that “Insurance fraud is the second most-costly white-collar crime in the U.S. (behind tax-evasion). The National Insurance Crime Bureau (NIBC) estimates that 10 percent of all insurance claims are fraudulent, adding $200 to $300 a year in higher insurance premiums for the average household.”   Like terrorism, the maxim is “if you see something; say something.” The money you save could be your own.  You can report any suspicion of insurance fraud in Washington here.  

The United States of Aging

We don’t want to be continually reminding everyone that we are getting older, but, in fact, that is the only way we can go.  Perhaps the best we can do is to observe Mark Twain’s sage observation:  “Age is an issue of mind over matter. If you don’t mind, it doesn’t matter.”   Evidently, many of us here on the Peninsula are taking Twain to heart. The National Council on Aging has surveyed U.S. adults to learn what they can about American seniors’ outlook on aging, and gather their thoughts about how the country can prepare to support the burgeoning senior population. The results are pretty interesting and might indicate we are doing pretty well here in our little corner of the world.

Seniors in the study placed a lot of value on staying connected to their friends and family.  This was the top choice of 40 percent of seniors responding to the study, even more important than financial means (30%). Health issues were also important, but less than half of the respondents set goals to manage their health.  A hopeful note was that seniors who reported they were taking care of their health were optimistic about aging and a majority of these optimistic seniors were setting health goals.  Over 70 percent of seniors feel the community they live in is responsive to their needs but only about half think their community is doing enough to prepare for the future needs of the growing senior population. 

Low income seniors did not fare as well in the study.  They nominated affordable medical care, affordable health care and transportation as important areas of concern and were nearly twice as likely as seniors in general to say they had feelings of isolation.  Low income seniors also seemed less likely to use technology like cell phones and computers, was the group most likely to report they did not understand how to use advanced technologies and the most likely to view cost as a barrier to using technology.
Some specific findings included the fact that nearly one third of seniors consider public transportation and job opportunities in their communities as poor, but a substantial majority consider their health care services are good.  They also said that their community should invest more in transportation, affordable housing, affordable health care and home-delivered meals.  

Here on the Peninsula, our situation looks pretty good.  Life expectancy is a bit higher in Jefferson County than the state as a whole and the prevalence of chronic conditions like hypertension and obesity are lower than the state as a whole.  Clallam County is not so well off but still is near the state average. For a rural area, we have a pretty robust transportation system and that is supplemented by volunteer transportation programs.  While we have a lot of in-migration which suggests people here are not always living near family, the mass of activities and volunteer activities available pretty much assures a senior need not be isolated if they don’t want to be.  All in all, we have a pretty nice place for seniors to live.