Christmas Cookies? What Would Your Boss Say?

Monday, December 20, 2010
The insurance industry and the federal government appear to be at war. They aren’t. Sure, there are times when a Congressman or the President may by vilifying my industry or some CEO is denigrating an entire political party, but these are just words and much of it is for show. As Sam Donaldson once remarked, “This is Washington. Only the amateurs get mad.” The government needs the insurers. And we all need the government.

The government / insurance industry partnership manifests itself in a number of ways. Today we are going to explore WELLNESS.

In my March 23, 2009 post, Protect Me From Myself, I discussed how my industry has been pushing Responsibility. If you would only take better care of yourself, quit smoking, and exercise more, your health care costs would decrease and your insurance might be more reasonable.

Allegedly, 75% of all claims are due to lifestyle. That’s our number and we are sticking to it.

The government has decided to test the theory. Employers are being encouraged to institute Outcome Based Wellness Programs. The employer hires an outside contractor to come in the factory or office, mostly factories, and meet with each employee. The goal of each interview:
Complete a comprehensive health care questionnaire
Record the employee’s height and weight
Take the employee’s blood pressure
Draw blood for comprehensive lab tests

Armed with this information, the wellness company can now coach the employee to quit smoking, lose weight, or better monitor his/her blood pressure. The employer is allowed to set goals for the employees and charge up to 20% more for the company’s health insurance for non-compliance.

One of these contractors, Bravo Wellness, has a helpful DVD that explains the concept. The featured employer set goals for his employees targeting:
Blood Pressure
Body Mass Index
Smoking Cessation
He penalized the employees who either fell short or chose to not participate.

Programs like this require both the carrot and the stick. Employers are encouraged to incentivize (pay) their workforce to take the initial exam and screenings. People don’t rush to disclose their health information. One contractor told me that the going rate was $300. Armed with this info, the employer can institute programs to encourage better behavior.

According to the National Association of Health Underwriters Corporate Wellness Certification Program, the return on investment (ROI) on Wellness is projected as:
34% - Increased Presenteeism
25% - Reduced Medical Costs
36% - Reduced Absenteeism
5% - Reduced Disability and Workmen’s Comp claims

Seventy percent of the projected return on investment of Wellness programs are from a reduction in absenteeism and an increase in presenteeism. In other words, fewer people will call off work and those who do show up will be more focused and productive if you have a Wellness program. The other thirty percent comes from reduced medical, disability, and Workmen’s Compensation costs.

Are there enough measurable gains to make this worthwhile for an employer or is this just a gimmick? The answer – it depends. A small employer, where the owners interact with the workforce on a daily basis, might find the intrusion into the employees’ personal lives uncomfortable and inappropriate. Large employers might have no difficulty imposing a company’s lifestyle values, such as no smoking or a 27 BMI, on their faceless workers.

And that brings us back to the government. We are getting mixed messages from this administration. As the federal government berates insurers for charging extra for preexisting conditions, it also welcomes penalties for lifestyle conditions such as uncontrolled cholesterol. This may be the test run for future government run health care programs. Will the federal health plans charge these people extra? Will the feds equate a 22 BMI with a good driving discount? Will Uncle Sam be monitoring your weight?

There’s a plate of Christmas cookies on the table. Did you ask your boss or the government if two would be OK?



Sunday, December 5, 2010
Retiring Representative John Shadegg (R-AZ) has been a frequent guest on Morning Joe, MSNBC’s morning news and talk show. The show’s namesake and principle host is former Republican Congressman Joe Scarborough. Mr. Shadegg has always been particularly candid on Morning Joe. I caught his November 30th appearance.

Congressman Shadegg extolled the virtues of the Bush tax cuts. He warned of dire consequences if taxes reverted to the rates of the 1990’s, even if only for people making over a million dollars per year. Actually, he was most concerned about those in the top tier.

How would we pay for continuing these cuts? These tax cuts were temporary because we couldn’t pay for them nine years ago. But reducing the tax rate was supposed to be such a powerful economic driver that the resultant job creation would have more than offset the short term loss of revenue. That hasn’t happened yet. But, according to Congressman Shadegg, continuing the Bush era tax cuts will ensure a reduction in unemployment.

Congressman Shadegg’s empathy was highly selective, especially when it came to the unemployed. He was very concerned about the tax cuts that could create jobs, but not terribly worried about those people who are actually unemployed. When it came to extending the unemployment benefits for the victims of the worst recession in seventy years, Mr. Shadegg suddenly became focused on every dollar coming to and leaving from Washington. He was positive that we couldn’t afford to continue benefits to the out of work. He implied that it was a waste of money. He opined that the unemployed wouldn’t stimulate the economy since they would just hoard the money.

Mike Barnicle: “Let’s get back to what you said about unemployment checks. People don’t spend that money?”

Representative Shadegg: “No, they will spend as little as they can because they’ll hold on to it as long as they can. In reality, they don’t create jobs.”

Yes, this is Health Insurance Issues With Dave and yes, the above has everything to do with the delivery of health care in this country. Watching Representative Shadegg the other day reminded me of why I have always been concerned about single payer, government run health care.

If nothing else, the last ten years have shown us that you may have to be thirty years old to serve in the U. S. Senate, but you don’t have to be an adult. Ten years ago, at the end of a major financial growth spurt, instead of saving money for the upcoming lean period (think Joseph’s interpretation of Pharaoh’s dream), we cut taxes. When we were attacked and went to war, our youth were asked to sacrifice twice, first in blood and secondly by being saddled with incredible debt. We then invaded Iraq, but still didn’t ask the American public for any sacrifice.

Somewhere along the way we screwed up the housing market, forgot the real purpose of banks, and sold our financial soul to China. And now we have well over 10% of our workforce unemployed and we are debating whether their food and shelter are national priorities.

Ten years from now. Twenty years from now. At some point when we have all been herded into a government run health care system, will your surgery be a future Congressman Shadegg’s priority? Will this government program, unlike all other government programs, be properly funded?

You don’t have to like Medical Mutual, Anthem, or UnitedHealth Care. You may even be really ticked at the annual rate increases. But, your policy will perform as per your contract and the insurer will always have the money to pay your claim.

Keith Olbermann has been highlighting the current mess in Arizona. Governor Jan Brewer has eliminated coverage for transplants from the State’s Medicaid program. Arizona can’t afford transplants. The eighty-some people who were waiting for lungs, kidneys or livers aren’t her priority.

The President and Congress have a lot of issues to tackle in the next few weeks during the lame duck session. Tax Cuts. Unemployment Benefits. Estate Taxes. Don’t Ask, Don’t Tell. A war or two. And, Harry Reid wants to talk about gambling. They all have their own agendas. Compromises will be made. Some bills will be signed.

And somewhere in Arizona there is a young woman with Cystic Fibrosis waiting for a lung…


The Blind Leading The Visually Impaired

Thursday, November 18, 2010
The “grandfathered” rules have changed. Let the celebration begin! Ok, maybe not.

New information was released this week further detailing which companies can or can not remain grandfathered. This is an amendment to the interim final regulations that were issued on June 17, 2010 by the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury.

This is the link to the thirty-five page summary.

This is the quick version of what changed: Businesses are now allowed to change insurance companies as long as nothing else substantially changes.

My posts of August 2nd and August 16th provided a quick list of requirements to retain your grandfathered status and how difficult that may prove to be. A key point of contention was that unions could change insurers, but small businesses and individuals could not, even if the insurance company left the market or made significant changes to its products. This amendment reverses that for businesses, but not for individuals. Heck, it’s a start.

The rules, this one, the set issued in June, and all future regulations, are subject to change or reversal. Long term planning is based purely on educated guesses.

The enforcement regulations and delineation of potential penalties will quickly follow.

My prediction: The forms, the cost to remain in compliance, and the penalties will all be far more expensive than simply opting out of private insurance for small business. Paying an annual “No Insurance” penalty (TAX) to the federal government will be cheaper and easier.

You are now up to date. This really is the blind leading the blind. No one really knows how this is going to play out. We are all guessing. Some of us may be better guessers than others, but no one really knows for sure. The recent election may have a real impact on the Patient Protection and Affordable Care Act or it may not change a thing. That can be said of every variable. All we can do, as business owners, as employees, as health care consumers, is to pay attention and hope for the best.

It is time to review the process.

March 23, 2010 – Congress passed and the President signed a far-reaching piece of legislation that affects 1/6 of our economy and the health and well-being of every American.
June 17, 2010 – The Departments of Health and Human Services, Labor, and the Treasury issued rules that apply to all business and individual health insurance policies, RETROACTIVELY from March 23, 2010. The rules also allowed for Public Comment.
June 17, 2010 – Some businesses and individuals learned that the changes they have made, or have been forced to make, preclude grandfathering from the new regulations. Businesses enact new plans accordingly.
November 16, 2010 – New rules. You might have been grandfathered after all, but now that you have made other changes, you aren’t!

Sometime in the next three to six months – Final rules will be issued.

Next Steps:
* Compliance
* Enforcement
* Penalties

Once the rules are final, how will the government and your insurance company know that you are complying? My guess will be FORMS. The Patient Protection and Affordable Care Act, with the onerous 1099 requirements, is a printer’s dream. Clients are already asking if there will be notarized affidavits required to certify their status. Not yet, but that could be coming soon.

Change can be useful. Change can be difficult. Ill-conceived, disorganized, rushed change is bound to cause unnecessary stress. Yes, this really is the blind leading the blind, but we appear to be going around in circles and there isn’t a whole lot any of us can do about it. Relax. Concentrate on your business. This isn’t war. Bullets aren’t flying. We will get through this. Together.


National Greatness and David Brooks

Monday, November 15, 2010
Today’s Health Insurance Issues With Dave is being replaced by the latest New York Times column from David Brooks. The Title is National Greatness Agenda. It is, on the surface, more about politics than health care or health insurance. Dig deeper dear reader. If we are not more responsible, if we don’t get our government’s finances under control, none of these new government mandated and totally unfunded programs will survive.

As the health care debate reignites, it is time to once again demand transparency, accountability, and clear, definable goals.

We may all agree that we are a great nation, but are we willing to work towards National Greatness?


OK. Now What?

Wednesday, November 3, 2010
Barry, my friend the CPA, is undoubtedly smiling. Barry formed a Tea Party of one, almost twenty years ago. His goal was to always have divided government. As long as the Democrats or Republicans were restrained, were kept from controlling both Houses of Congress and the Presidency, there would be some level of gridlock. Only the most important legislation could be passed. The moment either side had real power, all Hell broke loose. Last night was a good night for Barry and the many people who long for a smaller government.

This blog, however, is about health insurance and health care, not politics, so I will leave the list of winners and losers to others. Politics do play a huge role in how health care is delivered in this country and an even larger part in the foreseeable future. And health insurance, health care, and our system of entitlements had equally large roles in last night’s results. They are intertwined. The Republicans took the House last night. They almost captured the Senate. How will this impact health care?

The short answer may be “Not Too Much”.

President Obama came to office in the midst of a financial meltdown. He had three paths in front of him – a Crisis, a Disaster, and an Issue. He faced a divided country and had the chance to invest his political capital into only one. The Crisis was the economy and unemployment. The Disaster was Americans fighting and dying in two wars. The Issue was health care and specifically the uninsured and underinsured of our country. He chose the issue and spent the majority of his first two years and political good will pushing through an unpopular, poorly designed piece of legislation.

The Patient Protection and Affordable Care Act succeeded in energizing the opposition. Even centrist Democrats and Republicans were outraged by this combination of government overreach and intellectual dishonesty. Democrats representing swing districts, like John Boccieri, were pressured into supporting a bill that almost single-handedly caused their defeat.

Republicans have campaigned against the PPACA. Some have implied, some have even promised, to repeal this legislation. Can this legislation, passed only seven and a half months ago, be reversed? And, more importantly, do the Republicans want to?

NO and NO.

The Patient Protection and Affordable Care Act is not going to be repealed or reversed anytime soon. Oh, I’m sure Speaker-designate John Boehner will run a bill through the House. It will be great political theater. And, it will be risk free. The legislation won’t get through the Senate, and even if it did, it would be vetoed by the President.

I sincerely doubt that the Republicans would want to repeal this legislation. This is a fundraising bonanza. Campaigning against PPACA is far more profitable than solving the problems that necessitated the law.

So, we have a bad bill and the real possibility that cynicism may rule the day. Plus, we have yet to mention the insurers who have already spent millions to comply with the new rules and regulations. I firmly believe that the insurers have devised a path to real success under a government run health plan where they provide supplementary coverages. The major insurance companies would then have no desire to repeal the law.

We are quickly approaching the next calendar triggers of the health care legislation. It is possible that the Republican lead House of Representatives, far more interested in extending the Bush era tax cuts than anything else, might tackle meaningful reform in early spring. In a yet to be exhibited act of political maturity, the House could even draft a bill to limit and refine the PPACA. Such legislation could be passed by the Senate and signed by the President. It is possible. I leave the question of probability to you.

We had a major governmental change last night, a massive swing from the left to the right. What has changed in regards to the delivery of health care, the affordability of health insurance and the access to needed medical care? Alas, not much.


Stealing From Inside the Museum - Egyptian Artifacts Theft in Long Island Proves the Point

Saturday, October 23, 2010
Loss prevention at a museum starts by examining internal practices. When pieces are missing from a museum, the first place to look for a suspect is inside. Fortunately, a museum's risk can be reduced by performing thorough background checks on prospective employees and by creating moderate institutional oversight practices.

While the vast majority of museum employees are honest and trustworthy, there are many unfortunate instances where missing objects turn up in the hands of museum workers. Last week the New York Post reported that a federal court sentenced the director of the Long Island University Hillwood Museum to a year and a day in prison plus a $5000 fine for stealing Egyptian artifacts from his own museum. Barry Stern admitted to exacting revenge on his employer when his contract as museum director was not renewed. He worked 22 years for the university.

The Post describes how Stern stole the artifacts from the museum, brought them to Christie's for auction, and claimed they came from the Barry Stern collection. Records of the objects' existence at the Hillwood Museum were wiped out. The pieces earned Stern $51,500.

(As a side note, one wonders how the auction house failed to conduct enough due diligence regarding the provenance of the objects, particularly where the pieces presumably had accession numbers associated with the objects.)

The International Foundation for Cultural Property Protection helps cultural institutions minimize the risk of theft. Any of our colleagues can assist museums with internal loss prevention.

Read more:

How Much Will Free Cost You?

Tuesday, October 19, 2010
I looked at the Medical Mutual form again. Yes, I was a bit flustered by the beautiful woman with the deep dark eyes sitting there, next to me, in my office. But thirty-two years of experience kicked in and I continued to study the form. The numbers did not make sense. It took a call to the insurance company to solve the mystery.

I understood the answer immediately. Natasha’s health insurance policy renews November 1st. One premium, $510.96, is for her current “grandfathered” policy covering her and her college student son. The non-grandfathered version of the same policy is $547.75, a difference of $36.79 per month.

Welcome to the next phase of the implementation of the Patient Protection and Affordable Care Act. New provisions became effective on September 23rd. Like day following night, new prices became effective on September 24th.

In my post, Addicted to Other People’s Money, I wondered how much the new free basic preventive care services would cost us. We now have the initial price tag.

First, let’s detail what changed on September 23, 2010. The two key elements are Essential Benefits and Preventive Care. The definitions, below, come courtesy of Medical Mutual of Ohio. The email quoted in my July 20th post from Mrs. Obama bragged of even more comprehensive (expensive) benefits.

Essential Benefits: The law requires plans to remove lifetime limits on what the government defines as “essential” benefits. The law will also prohibit annual dollar limits, but not until 2014, which allows insurers to phase lifetime limits out by implementing annual dollar limits that will be incrementally increased each year until 2014. Essential benefits include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services, chronic disease management and pediatric services (including oral, vision and hearing examinations).

Preventive Health Services: Plans may not impose any cost-sharing requirements (e.g., copay, coinsurance or deductible) on preventive health services, as defined by the U.S. Preventive Services Task Force, when administered by a network provider.

Quick summary:
Essential Benefits become limitless.
Preventive Care Services become free.

Natasha (all names changed) and her son would be forced to pay $431 more over the next year for this. Another client, Paul, had a much more expensive experience. His new Anthem policy was effective September 20th. The premium for Paul, his wife, and two children for a high deductible contract is $402.55 per month. Since he had already paid his September and October premiums for his old policy, he wanted to re-date the new policy to November 1st. The premium for the exact same policy, enhanced with the new Free benefits, would be $480.77, an increase of $78.22. Are these new provisions worth almost $1,000? Not to Paul. And probably not to you.

So here we are, less than a year into the new law, and we are already seeing the impact of the new Patient Protection and Affordable Care Act. It is harder, not easier, to insure Americans. Insurance is more expensive, not less. And the words Cost Containment are still missing from the President’s vernacular.

The September 23rd changes are just becoming effective. More mandated changes are due for January 1st. And the rules are still being written, on the fly, as we reinvent the delivery of healthcare. I’m just hoping that nothing else is Free. We can’t afford free.


By the way, Jeff, my business partner, was concerned that this post was too dry and contained too much detail. I told him that I could trust my readers to not only plow through a fact laden piece, I could even count on some of you to add pithy, timely comments.

If You Want Your Art Back, Be Mindful of the Statute of Limitations

The First Circuit Court of Appeals decided the case of Museum of Fine Arts, Boston v. Seger-Thomschitz on October 14, 2010. Claudia Seger-Thomschitz, the heir of art collector Oskar Reichel, contacted the Museum of Fine Arts to reclaim Two Nudes by Oskar Kokoschka. Seger-Thomschitz argued that the painting left the hands Reichel because of Nazi coercion.

The Museum of Fine Arts spent 18 months researching the issue and concluded that Reichel sold the painting voluntarily. The Boston Globe published criticisms of this view in a May 2008 article. Nevertheless, the MFA sought an order from federal district court declaring that the museum legitimately owned the painting. The lower court ruled that the MFA rightfully owned the painting, and the court of appeals has now affirmed this decision.

The basis of the court of appeal's opinion is threefold. First, the district court's grant of a favorable judgment for the museum was proper on statute of limitations grounds because Seger-Thomschitz did not make a demand on the MFA within the three years statute of limitations under Massachusetts law. Second, the appeals court rejected Seger-Thomschitz's weak claim that the statute of limitations should bend in the wake of the non-profit section of the federal Internal Revenue Code [501(c)(3)]. Third, the court rejected her argument that the Massachusetts statute of limitations conflicted with America's foreign policy as expressed through the Holocaust Victims Redress Act of 1998, the Washington Conference Principles on Nazi-Confiscated Art, the Vilnius Forum Declaration, and the Terezín Declaration on Holocaust Era Assets and Related Issues. These proclamations are aspirational and not law, the court essentially declared.

The message in this case is clear: Where a party believes that art is improperly in the hands of another, the claimant must be conscious of the statute of limitations clock and perform the necessary due diligence to start a cause of action.

Two Nudes can be seen at

"Holocaust Historians Blast MFA Stance in Legal Dispute," The Boston Globe, May 28, 2008 at

Coberturas de US $ 1,000,000 y US $ 2,000,000

Tuesday, October 12, 2010

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Monday, October 11, 2010

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Sunday, October 10, 2010

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We Have To Destroy This Village To Save It

Monday, October 4, 2010
Insurance is real. My job is to work with real people, everyday, to solve real problems. I get angry and frustrated when the theoretical and the hypothetical invade my space and get in my way. Yes, I have an agenda. All but the apathetic have an agenda. The undeclared and disorganized agenda of the national Democrats interfered with my work this week. And I am more than just a little upset.

Jimmy (yes, the name is changed) is a healthy eleven year old living in Greater Cleveland. I have no idea where his dad lives. Jimmy lives with his mother, Wendy, a woman who has not worked since her unfortunate skiing accident of a few years ago. Jimmy’s major bills, like school, are paid by a generous aunt. Jimmy is uninsured.

Wendy had insurance for her son and herself, but she let it lapse in August. She didn’t pay the insurance and she didn’t tell her sister until last Monday. Why are the dates important? Because now we have a problem.

Wendy’s sister would have kept the old policy active, had she been notified in a timely manner. Though Wendy has recovered, for the most part, from her serious injuries, she is difficult to insure at this time. Due to the new health bill, we can not write a Child, Only policy on Jimmy. We could two weeks ago. A comprehensive policy on a healthy eleven year old used to be around $100 a month. That policy no longer exists.

Proponents of the new health care legislation, the Patient Protection and Affordable Care Act, love to cite the new provisions for covering children. No underwriting. No limits on preexisting conditions. Totally free preventive care. How do you price that policy? How do you properly build reserves for the sudden, and massive, shift of risk as parents currently paying for underwritten policies move to blindly issued contracts? You can’t. The insurance companies eliminated all Child, Only policies.

How many unhealthy kids are there? How many of my clients, small businesses in Northeast Ohio, are paying higher premiums because the owner’s child has a heart condition or a genetic disorder or some other ailment that requires substantial care? LOTS. And if the insurers didn’t play self-defense, if the companies unthinkingly threw open the doors and took all of them at a standard rates, the results would be devastating.

So where does that leave Jimmy, our healthy eleven year old? I can write, for the moment, short term, catastrophic coverage on Wendy and Jimmy. G-d forbid insurance. It is the best I can do. Governor Strickland, realizing the mess Washington has created, signed an emergency order this week to force the insurance companies to have a special “open enrollment” for Child, Only policies. Medical Mutual of Ohio, Anthem Blue Cross, and UnitedHealth Care have yet to determine how to comply with this order or how to price the product.

We had a health care system. It was uniquely American and it served 80% to 85% of us. It was hardly perfect, but it was ours and, like it or not, it reflected our values and our tastes. We needed to improve the system we had to better serve all Americans. Instead, we are in the process of dismantling our method of paying for health care and interacting with our medical providers.

Jimmy is just, to use the proper term, collateral damage.


Statute of Limitatons to Recover Stolen Culture Lengthened in California

Sunday, October 3, 2010
Governor Arnold Schwarzenegger signed into law California Assembly Bill 2765. This law allows an owner of a stolen or fraudulently taken cultural object to file a lawsuit to recover the piece within six years of finding the object. This new law is significant for three reasons.

First, it doubles the time an aggrieved party can recover an object of "historical, interpretive,scientific, cultural, or artistic significance" that has been stolen or taken by fraud or duress

Second, the law enacts the "actual discovery" rule. That means that the six year clock only starts to run once the original owner actually discovers the wherabouts of the cultural object.

Third, the law is retrospective. The legislature specifically stated that the law "shall apply to all pending and future actions commenced on or before December 31, 2017, including any actions dismissed based on the expiration of statutes of limitation in effect prior to the date of enactment of this statute if the judgment in that action is not yet final or if the time for filing an appeal from a decision on that action has not
expired, provided that the action concerns a work of fine art that was taken within 100 years prior to the date of enactment of this statute." There is no doubt then that the new law may impact Marei Von Saher's effort to move forward on her claim to recover Lucas Cranach the Elder's diptych "Adam and Eve" from the Norton Simon Museum, originally looted by the Nazis.

Read the law at

CPAC public sessions on Colombia and Greece cultural property agreements coming soon

Saturday, October 2, 2010
The Cultural Property Advisory Committee will be holding public sessions on October 12 and October 14, 2010 to consider renewing the cultural property protection agreement with Colombia and to consider a new agreement with Greece.

More information can be found by reading the Federal Register at

Random Thoughts Column

Monday, September 27, 2010
A few short posts about life as I know it.

Sprinkling a Little Holy Water

Boundaries. I noted a few weeks ago in my other blog, Again? Really?, that neither Reverend Kenneth Chaulker nor I should comment on the Catholic Church’s ongoing problems. I was reacting to his letter in the Plain Dealer. My suggestion was to leave the discussion of Catholicism to Catholics. Last Friday’s Plain Dealer gave us an opinion column from Sister Simone Campbell, the executive director of a Catholic social justice lobbying group based in Washington, D.C. If I compare her level of understanding of the real world issues involved in the health insurance debate, I am now qualified to lead Mass.

Just as I might be able to mouth the words in Latin, Sister Simone Campbell provided us, the readers, with another copy of the talking points from the Democratic Party’s campaign. About a third of the essay is a defense of the politicians who voted for the bill and an attack against those of us who have yet to be converted.

There are real discussions taking place around this country among business owners who will be forced to pay higher premiums, taxpayers asked to subsidize unfunded mandates, and legislators challenged to justify their decisions. Sister Campbell, like me in a church, is just another kibitzer.

Addicted? We’ve Got a Cure!

A series of emails arrived last week to alert me about an issue that could affect my clients. The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) applies to group insurance plans covering 50 or more employees. The law went into effect last October. The rules were issued three months later in January 2010. I printed the key email, a white paper from Milliman, the independent actuarial and consulting firm, and noticed an important sentence at the bottom of the page:

This document was sponsored and commissioned by Pfizer, Inc.

Pfizer? The name of the paper: The Mental Health Parity and Addiction Equity Act: Key Elements and Implications for Smoking Cessation.

Plan sponsors and their service providers and advisors need to be diligent when identifying insured benefits to be compliant with MHPAEA. For instance, it is easy to overlook smoking cessation benefits: they are covered by the act because they are a treatment for nicotine addiction, a substance use disorder.

Now it makes sense. Smoking isn’t a bad habit. It is a sickness. And we’ve got prescriptions for that. Guess who makes them?

The Good News – You’re Living Longer
The Bad News – That’s Gonna Cost You

John Hancock, a leader in Long Term Care Insurance (LTCi), recently announced a price increase. A careful study of all of their long term care claims (both group and individual) of the last twenty years forced them to make this decision.

Morbidity is up. Mortality is down.

Long Term Care Insurance pays when the insured is unable to perform two out of six of the Activities of Daily Living – bathing, dressing, using the toilet, transferring (to and from bed or chair), caring for incontinence, and eating. Hancock has seen an increase in claims and the claims are lasting longer. People are living longer after they begin to receive benefits. More people are living to an age where claims are almost inevitable.

The higher than anticipated utilization proves the need for the product. It also forced the reevaluation of the premium. John Hancock has been selling LTCi for less than thirty years, but has already paid out more than $3 billion in claims.

Why should you care? Because, insurance isn’t as easy as it looks. For every profitable line, there are types of coverages with very thin margins. And we want our insurers to be here, solvent, when we need them to write that check to us or our family. The insurers must maintain secure reserves. Their books have to balance. Their numbers have to be real.

All of the wishing and praying in the world can’t change the nature of basic mathematics.


By the way, I know that Mass is now done in English, but just as I prefer Hebrew in the synagogue, if I was going to celebrate Mass, I would go for the Latin.


Sunday, September 19, 2010

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• Cuando una persona es hospitalizada en su país de residencia, el deducible es automáticamente eliminado
• Cobertura de U.S.$ 1,000,000 y U.S. $ 2,000,000
• Libertad para seleccionar cualquier hospital o doctor a nivel mundial
• Facilidad de pago mensual, trimestral, semestral o anual
• Ofrecido por Claria Health Insurance Company, Compañía de Seguros norteamericana
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...SU SEGURO DE VIAJE AL ALCANCE DE SU COMPUTADORA! Seguro de Viaje al alcance de su computadora!
• Seguro para Ejecutivos, Profesionales o Viajeros frecuentes y sus familias
• Seguro para Grupos Viajeros, es apropiado para grupos corporativos, misioneros o iglesias, grupos de estudiantes u organizaciones
• Seguros Individuales o Familiares
• Puede obtener cotización, contratar, pagar y obtener la póliza con su respectiva tarjeta por Internet
• Sin limite de edad
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HROLIVAR Seguros Internacionales

Ofrecemos una amplia gama de Seguros Internacionales en U.S. Dólares, como Seguros para Expatriados, Seguros de Inversión y Protección (Universal Life), Seguros de Vida (Life Insurance), Seguros de Salud (Health Insurance), Seguros de Viaje (Travel Insurance) Individual o Familiar, de Grupos y para Profesionales o Viajeros Frecuentes, así como, Seguros para Estudiantes en el extranjero.
Nuestros Seguros de Viaje satisfacen los requerimientos del visado Schengen.
Representamos Compañías de Seguros de Estados Unidos de Norteamérica, todas de primer nivel y servicio al cliente, brindamos atención y servicio a una selecta clientela de Centro y Sur America.
Hemos seleccionado solo planes de Seguros Internacionales de primera línea, los cuales Usted puede revisar, seleccionar y comprar por Internet desde la comodidad de su computadora.
Estamos en Twitter y Facebook. Visítenos:


Cobertura Médica en su país y en el mundo entero
• Ofrecido por Claria Health Insurance Company, Compañía de Seguros norteamericana
• Oficinas en Fourt Lauderdale, Estado de Florida
• Extensa red médica con servicios que incluyen evacuación, repatriación, referencias médicas y monitoreo
• Cuando una persona es hospitalizada en su país de residencia, el deducible es automáticamente eliminado
• Cobertura de U.S.$ 1,000,000 y U.S. $ 2,000,0000
• Cobertura inmediata para accidentes y enfermedades infecciosas
• Libertad para seleccionar cualquier hospital o doctor a nivel mundial
• Asistencia médica mundial, 24 horas, 7 días a la semana
• Una llamada por cobrar al Centro de Emergencia, provee un servicio rápido en Inglés o en Español
• Facilidad de pago mensual, trimestral, semestral o anual
• Personas asegurables hasta 69 años
• No hay edad máxima para cobertura mientras que la póliza sea renovada, renovaciones garantizadas de por vida
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Previsión ante la Crisis: Piense en Dólares
• Ofrecido por Nalic Life Insurance Company con mas de 38 años de experiencia
• Compañía con alto coeficiente de superavit y solida diversificacion de activos
• Alta reputacion de solidez, confianza y credibilidad.
• Miembro del grupo financiero National Group, cuyo patrimonio neto excede los $250,000,000.00 en activos
• Se ofrece para extranjeros que no sean residentes, ni ciudadanos de Estados Unidos
• Producto en U.S. Dólares ($)
• Cantidad de seguro garantizada por fallecimiento
• Prima modicas desde U.S.$ 375
• Facilidades de pago: anual, semestral o mensual
• Para edades de 18 a 65 años
• Renovación Garantizada sin evidencia de asegurabilidad
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If You Don't Know What To Do, Do Nothing

Friday, September 17, 2010
My business is on hold. I’m not talking about the phones. I’m not talking figuratively. Literally, a major portion of my business is on hold. There is so much uncertainty, so little clarity, that I am, for the next few days, unable to write new individual health insurance policies through the largest insurers in this area.

I first noticed this about a week ago. One of my Anthem clients has a policy renewing October 1st. The new premium wasn’t too bad, but she wanted to know about other options. I couldn’t locate the link on their website. Admitting computer illiteracy, I sent a request in to Agency Services. I was shocked by Anthem’s response. The link was removed because there are no options. I was asked to resubmit my request after September 23rd. Anthem is waiting to see what the federal government is going to do.

Thirty-two years in the business and this is the first time I’ve ever seen an insurer tread water. I decided to run a quote for her as if she was a new client. My software said “Tilt”. Anthem’s online quoting had this note: “Plans and rates effective 9/23/10 and after will be available as soon as our Health Care Reform compliant plans are available for sale." If you need a new health insurance policy, Anthem is not an option. At least, not today.

Medical Mutual of Ohio is still quoting. In fact, MMO will quote their entire product line, but all applications with an effective date of September 23rd or later won’t be issued if children are to be included in the plan. Family policies are put on Underwriting Hold. The applications aren’t declined. They certainly aren’t issued. These potential policies are in limbo.

What can the insurer’s do? The Patient Protection and Affordable Care Act is a shell of goals and half-baked concepts. The rules and regs are still being written and many will apply, retroactively, to March 21, 2010. And, the insurers had better not complain. Kathleen Sebelius, the Secretary of U.S. Health and Human Services, is threatening any insurer who informs its clients of the actual costs associated with this scheme.

We have discussed the whole grandfather issue in previous posts. Grandfathering separates which business might escape some of these new rules for awhile and who will be impacted immediately. Businesses covered by Aetna don’t have to waste anytime studying the grandfather provisions. Between the recently written regulations and a couple of Aetna’s decisions, no Aetna small group health policy qualifies to be grandfathered.

Children are a key part of next week’s problems. Can they be underwritten? Can the insurance industry really cover every preexisting condition for every child, with no limits, without raising the price of policies? How much is enough? Who is going to pay?

Since we have never had an honest discussion about price or goals, we have arrived, six months into this grand experiment, at a crossroads. Some form of nationalized health care still appears inevitable, but the President and Congress refuse to put their cards on the table. Without taking the time to clearly define the goals and costs, we are at the first of several predictable impasses.

The insurers will be happy to sell supplements to the future government health plan. UNUM has already released the first plans specifically designed for that. Assurant and UnitedHealth One have new accident and dental policies. What are they supplementing? The federal government has done a great job of pressuring the insurance companies, but it is ill prepared to handle its part of the program.

So, a major portion of my business is on hold. If you and your family need coverage as of October 1st, I may, or may not, be able to help you. I hope to know more by next Thursday.


True Equality

Saturday, September 11, 2010
The Heck with building better highways for better Negro marchers. What we need is to get our fair share of the crooked contracts that build those highways.

Godfrey Cambridge

How do you define equal opportunity? In Cuyahoga County, the right last name and a lack of scruples guaranteed a safe and secure government job. These positions may not have paid very well, but attendance appears to have been optional.

I am happy to report that you don’t have to settle for county money. The federal government is dedicated to equal opportunity for all Americans willing to engage in criminal activity. If you are ready to make serious money, Medicare Fraud could be your big break.

A recent report on 60 Minutes detailed the scope of Medicare Fraud, how easy it is to steal from the U.S., and our government’s inability to control a program that insures almost 50 million Americans. It is estimated that WE, the U.S. taxpayers, are losing about $60,000,000,000 a year to Medicare Fraud.

Medicare Fraud could be overbilling or double billing. Unfortunately, it is most often the filing of claims for goods or services that were never provided. These aren’t errors. We are discussing the theft of billions of dollars.

The politicians will tell you that they are doing a great job. Sure Medicare Fraud is a huge problem, but they are holding Summits and making arrests. Kathleen Sebelius, the Secretary of U.S. Health and Human Services, posted her August 26th speech at the Stop Medicare Fraud Summit. Read her speech where she described band-aids like an excited four year old.

Last Friday The Miami Herald reported that Ernesto Montaner was sentenced to four years in prison and Jose Varona , three. The two men were also ordered to repay a total of $4 million. They were billing Medicare for rehabilitation services that never took place. Montaner’s father, the brains of the group, is in Costa Rica. What the story doesn’t say is how much money they really stole and what, if any, will ever be repaid.

Medicare Fraud is out of control because the government won’t allocate the necessary resources. Congressmen, like Anthony Weiner, often cite Medicare’s overhead as only 4%. As noted in the February 5, 2010 posting of this blog, Mr. Weiner has even claimed a preposterous 1% overhead.

* Let’s pretend that 4% is accurate.
* Let’s pretend that much of Medicare’s actual expenses don’t fall into other parts of the federal budget.
* Let’s forget about all of the costs shifted to our law enforcement agencies and courts.

Medicare paid approximately $430 billion in claims last year. $60 billion went to thieves. That is 14%! That money didn’t go to care. That money didn’t go to prevention. That money wasn’t even spent on taxable salaries. It is money, your money, flushed down the toilet.

The new health care bill, the Patient Protection and Affordable Care Act, attempts to level the playing field. Insurers are being forced to reduce their overhead expenses. Part of the savings will come from a reduction in agent compensation (ouch). Home Office personnel will also be cut. But the insurers, unlike the government, will never pay out 10% or more of their claims to crooks.

As long as there are cars, there will be ample opportunities to scam big money as a construction contractor. But I think if Godfrey Cambridge was delivering that stand-up comedy routine today about equal opportunity, he would want to know whether Blacks in Detroit or Los Angeles were getting their fair share of the Medicare Fraud largesse.

Rest in Peace Mr. Cambridge. Everyone’s getting their cut.


CPAC to Discuss Request by Greece for Cultural Property MoU

Wednesday, September 1, 2010
The United States often helps other countries whose cultural heritage is in jeopardy through bilateral agreements. These agreements come about through the Cultural Property Implemenation Act (CPIA). This federal statute gives force to the 1970 UNESCO Convention that protects cultural heritage by allowing the United States to set up import barriers to block looted and stolen cultural property from passing through our borders. It gives Customs and Border Protection and Immigration and Customs Enforcement the ability to seize illicit antiquities when smugglers try to bring them to America.

The CPIA sets up an advisory committee called the Cultural Property Advisory Committee (CPAC) to help the White House decide whether to enter into one of these bilateral agreements that creates import restrictions.

On October 12, 2010, CPAC will meet at the State Department in Washington, DC to consider adopting an agreement with Greece to protect its archaeological heritage from looters and smugglers. Greece is where the first building blocks of western democracy were laid, so it is important that its rich history is protected.

You can lend your voice America's commitment to Greece's archaeological treasures by submitting written comments to CPAC by  September 22, 2010.

To send comments to CPAC go to and a web page will appear. In the box titled "Enter Keyword or ID" type in "DOS–2010–0339-0001" and then click on "Search." Under the "Document Type" heading, click on the box that says "Notices." Then look toward the bottom of the page to see a link that says "Submit A Comment." Click it and start writing.

Useful comments submitted to CPAC are ones that describe how
a) how US import restrictions of objects looted from archaeological sites would help to deter the destructrion of these sites, or

b) how US import restrictions on looted and smuggled archaeological objects can promote the exchange of scientifically excavated cultural materials between the United States and Greece for scientific, cultural and educational purposes.

The information described here can be found in greater detail on the Archaeological Institute of America's special web site located at It is worth a visit to learn more.

Help protect cultural heritage by contacting CPAC and telling its members how you support adopting a bilateral agreement with Greece.

Herding Cats

Monday, August 30, 2010
My friend Mitch, who lives in Montreal, was stuck overnight in Cleveland. Mitch used to live on Solon. He misses his friends, our shopping, and our health care – in that order. While visiting him at the airport Marriott, he once again regaled me with his stories of fighting for the attention of Canadian doctors and hospital staff. He hopes to return to the U.S. one day. He is counting on our system to still be here for him.

Mitch and my friends on the far right are very worried that we will one day have a single payer, rigid system like Canada’s. My one word answer is to RELAX. If you would like proof that their fears are in vain, I give you an article in yesterday’s Plain Dealer.

The story, a reprint of a New York Times article, was about medical marijuana. Medical marijuana is legal in some states, illegal in others. It is banned by some employers while ignored by others. The federal government has raided distribution centers while giving lip-service to states’ rights.

We are Americans. We could never tolerate an absence of choice. We would never accept a one-way, the only way, type of health care system. We are contrarians by nature. Our rules constantly change because we are constantly changing.

The short article included a brief description of Nick Stennet’s employment problem. Mr. Stennet told his employer about his health problems and his daily use of medical marijuana. He was later fired when, surprise, he failed the drug test. The lawyers should have a field day with this.

The laws in Rhode Island might be like the laws in Hawaii, but very different than those in Utah or Alabama. People in Maine choose to live in Maine, not New Hampshire. And California is constantly at war with itself. That’s us. This is the essence of the United States.

Rigid? Choiceless? Single-payer with no other options? That’s just not our style.


Museums and Arts Organizations At Risk for Losing IRS Tax Exempt Recognition: Is Your Organization on the List?

Friday, August 20, 2010
The IRS recently published a long list of non-profits that have not filed appropriate forms for the last three years. Many museums, historical societies, and arts organizations are featured. These groups risk losing their tax-exempt status if action is not taken soon.

The IRS is giving organizations the opportunity to keep their tax-exempt recognition so long as paperwork is filed by October 15, 2010.

See if you are on the list at,,id=225889,00.html?portlet=7.

The Display of Art - A Fiduciary Duty of the Museum

Recently Eli Broad, art collector and philanthropist, told the American Association of Museums about its members' duty to take art out of storage and put it on display. “If 90% of your work is in storage you need to begin lending it to other institutions. Get art out of the basements,” The Art Newspaper reported.

The fiduciary duties of care, loyalty, and obedience obligate art museums to display their works. Museums are generally institutions legally formed for the public good. They hold works in trust for the viewing public. When works are accessioned and not displayed, museum boards of directors may be putting themselves at risk of violating their fiduciary duties.

While these duties have not been traditionally enforced by state attorneys general, the rise in deaccessions by institutions to raise revenue for operating costs could prompt greater scrutiny of these fiduciary duties. Taking works out of the basement makes good legal sense.

As Seen In The Plain Dealer

Monday, August 16, 2010
My last post on Health Insurance Issues With Dave generated a lot of responses. Some people were frustrated with yet another under-publicized provision of the Patient Protection and Affordable Care Act. Some used my article as an opportunity to complain about the Democrats, in general, and the President, in particular. But the phone calls all went something like this:

Dave, OK I’m scared. This doesn’t apply to me, right? I’m grandfathered.
No, it does and you aren’t!

There was an excellent article about the rules to be eligible to retain grandfathered status in the August 8th Plain Dealer Forum Section. It was written by Michael P. Coyne. The article tied in so well with my blog and my clients’ concerns that I felt compelled to write a Letter to the Editor. This appeared Saturday, August 14th.

Michael P. Coyne's article about "grandfathered" health plans (Forum, Sunday) shed some light on the challenges small businesses face with the Patient Protection and Affordable Care Act. Please let me add a real-world example.
A client called recently to verify that his plan still qualified as "grandfathered." It didn't. He employees about 25 skilled and semiskilled workers and has always provided health insurance. His June renewal with a major carrier included a rate increase of 23.7 percent. Luckily for his employees, another carrier with a little better coverage was less expensive. The employees won. The employer won. Everyone is happy -- except Washington.
You lose your "grandfathered" status if you change insurance carriers.
"Why should I be punished?" my client asked. "They now have better coverage."
The answer, of course, is simple. None of this is about coverage.

Is it really that simple? Yes. Unions can change insurance carriers without forfeiting their grandfathered status. Businesses can not. Will this affect the client’s employees and how he does business? Definitely. I’m positive that this legislation will have a significant impact on the payment and delivery of health care.

The rules may be written on the fly, but the outcome appears to be predetermined.


By the way, special thanks to those of you who followed ALL of the links in the last post. Even the most serious of topics needs a little levity.

Don't Cry Uncle, Stay Grandfathered

Monday, August 2, 2010
Grandfathered - The right to stay under the old rules and regulations that new policies must follow. The more onerous the new rules and regulations, the more desirable it is to be grandfathered.

The new rules are coming. In a rush to change the delivery and payment of health care as quickly and as irrevocably as possible, Congress made the Patient Protection and Affordable Care Act effective the day it was signed into law, march 23, 2010. The rules have yet to be written. The U.S. Departments of Treasury, Labor, and Health and Human Services are issuing interim final rules. Nothing is set in stone, except that all of the rules they create will apply to all group and individual health insurance policies that aren't grandfathered.

Policies on the books as of March 23, 2010 may be grandfathered, may be exempted from some of the new rules. Which rules? Who knows? The rules and regs are fluid. The insurers are being pressured to institute some changes "voluntarily".

How important is grandfathered status? There is no way to assess the value at this point, but the government is attempting to make it very difficult to maintain. So difficult in fact, that the rules to keep that status got my attention. When Washington erects this many roadblocks, and a damaged bridge isn't involved, you might want to see what is on the other side.

The following, courtesy of Medical Mutual of Ohio, is a synopsis of the Interim Final Rule for the maintenance of the status of a grandfathered plan. The following changes will cause individual and employer plans to no longer be grandfathered:
* A merger, acquisition or similar business restructuring, if the principal purpose of the action is to cover new individuals under the grandfathered plan.
* A substantial elimination of benefits to diagnose or treat a particular condition.
* Any increase in cost-sharing percentage requirements (such as coinsurance) above the level in effect as of March 23, 2010.
* An increase in the fixed-amount, cost-sharing requirements (e.g., deductible or out-of-pocket limits) above the level in effect on March 23, 2010, other than copayments, that exceeds the sum of medical inflation plus 15 percent.
* An increase in copayments above the level in effect on March 23, 2010, by an amount that exceeds the greater of the sum of medical inflation plus 15 percent or $5, adjusted annually by medical inflation.
* A contribution rate decrease by an employer or employee organization of more than 5 percent below the contribution rate on March 23, 2010, for any tier of coverage and any class of similarly situated individuals.
* The addition of an overall annual limit on the dollar value of benefits if the plan was not imposing an overall annual or lifetime limit on the dollar value of benefits on March 23, 2010.
* The addition of an overall annual limit on the dollar value that is lower than the dollar value of the lifetime limit on March 23, 2010.
* Any decrease in dollar value of the overall annual limit (regardless of whether the plan had an overall lifetime limit on March 23, 2010), if the plan imposed an overall annual limit on the dollar value of all benefits.
* A change in health plan carriers (changing a third party administrator has no effect).

Almost any change made since March 23, 2010 disqualifies your plan from being grandfathered. Did you know that in April when you raised your deductible? Have you changed your copays lately? Even replacing the exact same benefits with a different insurance carrier causes you to forfeit your grandfathered status. This isn't about you, your business, or your employees. It certainly is not about making your current policy more effective.

Will there be any benefit to having a grandfathered health plan? I don't know. But, the government thinks that there will be a real value and Washington is working very hard to take it away from you.


Addicted To Other People’s Money

Tuesday, July 20, 2010
Three minutes. Citizens are allowed three minutes to address the Beachwood City Council at regularly scheduled meetings. This isn’t a Q & A. If the Councilmen deign to respond to the concerns raised or answer the questions asked, it will happen whenever they choose. The agenda designates this as Citizens’ Remarks. The microphone is yours. You have three minutes.

I used to attend every Council meeting. A special entry was added to the City’s agenda, Chamber Report, for me to address Council. But I am no longer the president of the chamber of commerce and I have other ways to spend two Monday evenings a month. I forced myself to attend last night’s (July 19th) meeting.

The City of Beachwood is ready to take a 33% income tax hike. Beachwood would jump from one and a half percent to two. City revenues are down in these tough economic times. The goal is to tax the people who work here, but can’t vote, as opposed to the people who live here and can. I was at the meeting to watch City Council sing and dance.

I had no intention of speaking at the meeting until I saw item 9 on the agenda:

An Ordinance extending a Contract with Medical Mutual of Ohio (MMO) for renewal of health insurance coverage for City employees, declaring the existence of an emergency condition regarding health insurance coverage and further waiving competitive bidding.

I read that paragraph several times. This was easily one of the most ridiculous things I had seen in thirty-two years in the insurance business. Ticked off, I waited for the Citizens’ Remarks portion of the meeting.

I began by clearly stating that I don’t work with municipalities. My interest was strictly that of a taxpayer. I noted that there are no insurance emergencies. The City had plenty of time to get bids from countless other insurers. Anthem? UnitedHealth Care? Aetna? They simply didn’t bother. Why would they? They’ve got us to pay the bills.

As the meeting dragged on, we eventually learned that the City never negotiated with the employees to accept a less expensive policy. The City never negotiated with the employees to increase their contribution. Beachwood hasn’t solicited for bids in years. The Mayor and Council can’t help themselves. They are addicted to other people’s money.

Other people’s money is a common addiction. I was thinking about it earlier yesterday as I was reading an email from Michelle Obama. Yes, I’m on her email list. She and other members of the White House send me emails all of the time.

Anyway, Michelle (she calls me David) wanted me to know about all of the great ways that the new health care bill was going to help my family and lower costs.

So much of what makes this law great is its emphasis on preventive care--right now, too many people aren’t getting the check-ups or the screenings they need to stay healthy. Twelve percent of kids haven’t seen a doctor in the past year. And 59 million adults--and 11 million children--depend on an insurance plan that does not cover basic immunizations.

Health reform is changing that. Under this new law, all new private plans will provide basic preventive services--things like childhood immunizations and checkups, mammograms, colonoscopies, cervical screenings, and treatment for high blood pressure--absolutely free of charge. No copay. No deductible. No co-insurance needed.

Does this mean that America’s doctors will be providing free exams? Will labs dedicate entire months to free blood work? Will pharmacies dispense free blood pressure medications? Of course not. Our medical providers expect to be paid for their time and efforts. Rightfully so. These tests, services, and products aren’t free. Your insurance will pay for them. And you will pay more for your insurance.

Nothing is free save your mother’s love. But when you are addicted to other people’s money, you lose sight of the real cost of anything. There is always someone there to pick up the tab. And eventually the addicts forget that there is a cost. But actions have consequences. Goods and services and not free.

Beachwood, and countless other municipalities around the country, will get a crash course in effective budget management. They may even be forced to make some tough decisions. The new health bill has already begun to force business owners to make tough decisions. The only Americans unaffected are like my email buddy, Michelle, the ones addicted to other people’s money.


Invest in Museum Risk Management - Don't Always Count on Someone Being There When Disaster Strikes

Saturday, July 17, 2010
Back in June 2008 flooding damaged areas of Iowa. One place hit by the rising waters was the University of Iowa's (UI) art museum. The good news is that the Figge Museum in Davenport was able to house and protect some of UI's artwork after the flood. Just as when Hurricane Katrina hit Louisiana and other nearby states, several art museums came to help out institutions affected by the disaster. However, long-term help cannot always be counted on. In UI's situation, Lloyd's of London will not insure a new museum building for UI if they construct it in the same spot. And the Federal Emergency Management Agency(FEMA) has just denied UI's request for funds to help build a new museum. The lesson is that an investment in risk planning can help a cultural institution mitigate or prevent problems later.

Operation Andromeda - Carabinieri Cultural Heritage Protection Command Press Release

Friday, July 16, 2010
Unedited original available at

On July 16, 2010, the Carabinieri Cultural Heritage Protection Command presented to the press ... three hundred thirty seven exceptional archaeological finds, from Lazio, Puglia, Sardinia and Magna Graecia, dating between eighth century BC and fourth century AD, and returned from Geneva, Switzerland on June 25, 2010.

Among the many outstanding heritage items are ... loutrophoros, marble statues depicting the goddess Venus, Apulian and Attic volute craters, craters mask Canosa, kylix Chalkidiki, bronzes, frescoes from Pompeii, a basket and two nuraghic warriors, whose value is determined on the illicit market based on their size in centimeters (about ten thousand euros per centimeter).

The total asset value of the works exceeds fifteen million euros. The exhibits were seized earlier this year by the Swiss authorities and by the Carabinieri, as a result of an investigation commonly known as "Andromeda" in the free port of Geneva, where they were stored by an art dealer and a Japanese Swiss businessman ....


No Prison Means No Deterrence

Thursday, July 8, 2010
Crimes against culture rarely appear on the radar of law enforcement authorities. And when such crimes are investigated--oftentimes after years of time and effort--many prosecutors tend to let such cases fizzle. That is what happened again today when a plea bargain was accepted in a Utah courtroom. A federal district court judge sentenced Brent Bullock to five years of probation supervision and sentenced Tammy Shumway, widow of the infamous antiquities looter Earl Shumway, to three years of court ordered supervision after a half year of home confinement.

The over two year inevstigation into antiquities looting and trafficking in the Four Corners area of the United States is just latest example of intense investigative efforts being rewarded with light sentences. Five defendants have now been convicted and sentenced to no time in prison. To be fair, one of today's defendants received a time-served sentence. But serving three weeks pre-trial time in jail is different from being sentenced to jail.

Prosecutors across the country took years to recognize that domestic violence was a legitimate crime. When it was acknowledged as a crime and jail sentences were pursued by the authorities, there came a marked increase in the detection and deterrence of the criminal activity. Crimes against culture require this same kind of recongnition.

That is why crimes against culture must earn meaningful court sentences that include incarceration. Weighty sentence tell other law enforcement and prosecution agencies that this crime is serious. Moreover, meaningful sentences tell other would-be grave robbers and antiquities traffickers that the price of doing illegal business by erasing history includes losing one's liberty. If the cost of site looting is of no consequence, then there is little incentive to deter a looter or trafficker.

Organizations like the Archaeological Institute of America and others must continue to educate authorities about the damage done when archaeological material is ripped from its context. That is to say, the irreparable harm caused by removing evidence of our past from the ground without proper documentation.

The Blind Squirrel

Tuesday, July 6, 2010
Should all businesses provide health insurance benefits to their employees? As a guy who makes his living selling group health policies to employers, you might think that I would answer with an emphatic “YES”. In theory, all businesses should provide benefits. In practice, not necessarily.

Sunday’s Plain Dealer included an article about the White Castle hamburger chain and the unintended/intended consequences of the recent health care legislation. According to the article, White Castle has been providing health insurance coverage to its full-time employees for a very long time. And, they are more than generous, paying 70% to 89% of the cost. By these measures, White Castle is a good corporate citizen.

But it is not enough. The Patient Protection and Affordable Care Act imposes a $3,000 per employee penalty on companies whose workers pay more than 9.5% of household income in premiums for company provided insurance. “White Castle estimates that this new rule could cost as much as 55% of its yearly net income."

Before we go any further, it is important to note that a recent study found that 78.9% of all statistics were created at the moment of their citation.

So I may not be certain about the actual pain White Castle may experience. Of course, when Nancy-Ann DeParle, Director of the White House Office of Health Reform, is quoted later in that same article that 97% of the nation’s companies won’t pay any penalties, I am equally skeptical.

Let’s talk real numbers. There are lots and lots of people earning $9 an hour. Is that right? Should they be paid more? I don’t know. You hire them and let me know. Today we’ll simply work with reality.

$9 an hour times 35 hours per week times 52 weeks per year equals $16,380. This person could only be charged $30 per week to participate in the company health plan. Anything more and the employer is charged $3,000 per employee. Restaurant worker, Retail employee. Clerk. There are a lot of people earning less than $20,000 per year. Their employers have a problem. Or a choice.

Will employers absorb even more of the rising health insurance premiums? Will employers make do with fewer workers? Or, will businesses cancel their private insurance and pay the lower $2,000 per employee penalty for not providing coverage?

The cheapest option, even less than providing high quality health insurance to its employees, may be to pay the $2,000 per employee penalty and to cancel the benefits. This just funnels more people into the government plan.

The article also quotes Steven Kreisberg of the American Federation of State, County, and Municipal Employees Union (AFSCME). Uniquely unqualified to address the concerns of any business, Mr. Kreisberg assures us that the young and healthy will simply opt out of their employers’ plans. The employers would then save premium dollars by paying $2,000 per employee per year for nothing. Forgetting that businesses hate to spend money for nothing, we still understand that taking the young and the healthy out of the employers’ groups will only make their premiums skyrocket.

The structure of these penalties only make sense if the ultimate goal is a government run health care system.

There were other experts and ax-grinders quoted in the Plain Dealer article. One was the number one Republican in the House of Representatives, John Boehner (Oh). Mr. Boehner is the George Hamilton of national politics. While Mr. Hamilton’s movies feature his tan and a lightweight plot, Mr. Boehner’s TV appearances tend to feature his tan and his lightweight logic. I have always thought that his job was to keep the seat warm till a real leader emerges. I am not a fan.

Imagine my surprise when I read this quote from Mr. Boehner. “The irony is that in the name of expanding health care coverage, the administration is making it harder than ever for unskilled workers to get started in the workforce.”

Sure the populism is feigned. But truth is truth. In a rush to achieve a goal with little thought to the consequences or collateral damage, this administration has begun to implement its health care takeover. And, as per Mr. Boehner, it is true. Even a blind squirrel can eventually find a nut.


Gang-style art theft: Caravaggio recovered from criminal group

Tuesday, June 29, 2010
Ukrainian and German police recovered a Caravaggio that had been stolen from a museum in Odessa in 2008. “The Taking of Christ” was found in the hands of a criminal group that deals with high value theft. Such reports reinforce our knowledge that organized criminal activity is involved with art crime. Authorities must aggressively uncover the relationships between criminal networks and art crime in order to combat this large, global problem that funds other crimes. Today's recovery by police is welcome news.

The Shell Game

Monday, June 28, 2010
The recently passed Patient Protection and Affordable Care Act forces the State of Ohio to re-address our uninsured. Of particular interest is our population of high risk uninsured. These individuals are very unhealthy and have not been insured for over six months. The previous options available to our high-risk pool were both mediocre and expensive. Still, many of our unhealthiest accepted the available state mandated option. Today we are talking about those who did not.

According to the report published in the Plain Dealer this past Saturday, the federal government has allocated $152,000,000 to help cover these Ohioans until the new rules kick in, about four years from now. Medical Mutual of Ohio, a local not-for-profit, won the contract to manage the policies.

This is not free insurance. The individuals will be required to pay some yet to be determined premium. What does one hundred fifty-two million get you? The State’s best guess is 5,000 insureds. Based on my knowledge of the current premiums and benefits available to these individuals, that number might be a touch optimistic.

In a post dated June 29, 2009, The Real World, I noted that Governor Strickland’s budget included a premium reduction for the open enrollment policies available to Ohio’s unhealthiest citizens under age 65. The cost for this would be borne by Ohioans who pay for their own health coverage. We would, according to the State’s actuary, pay 5.5% more to help our neighbors acquire insurance. My clients can attest to their rising premiums.

The one hundred fifty-two million dollars is part of a total five billion dollar four year program. Let’s pretend that 5,000 is a real number. For our purposes, let’s pretend that all of these numbers are real, the federal government really has five billion dollars, and we really get our hundred fifty million. 5,000 beneficiaries would get only $30,400 towards their coverage. This is only $7,600 per year, a little over $600 per month. Is that even close to the actual cost of insuring these individuals?

The current Medical Mutual of Ohio premium for the Ohio Standard policy for a 60 year old male in Cuyahoga County is $1,403.08 per month after the recent rate reduction. We already know that that is not sufficient to pay claims. Will our soon to be insured make up the $800 per month difference? And, will the new federally designed policy be as awful as our current contract or will it be more generous and costly?

This, of course, does not even begin to address the fact that there are far more than 5,000 Ohioans who are both very unhealthy and in need of a different way to pay for their health care.

There was a time, not so long ago, that we were told that one of the main reasons we had to go to war was because of the way the Taliban treated the women of Afghanistan. We have been told that the purpose of health care reform was to cover the uninsured. The selectivity of our focus and actions make both arguments seem specious. Our government is perfectly happy to ignore the abuses of cooperative tyrants who provide us with cheap oil. And we have yet to show any real interest in devising, and FUNDING, a program to truly cover our unhealthiest and uninsured.

What we have is a shell game. More and more costs are being shifted to those of us with private insurance. All the while the federal government attempts to block insurers from raising rates to cover the true costs. Books must balance, at least in business.

My predictions of a few months ago still stand.


FBI Art Program Presentation in NYC

Monday, June 21, 2010
Theft, Fraud, and Forgery: Cultural Property Crime in the U.S. and the FBI Art Theft Program

When: Thursday, July 22nd, 2010, 2:00 - 5:00 pm
Where: Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York 10019

Art crime is a multi-billion dollar endeavor that affects collectors, dealers, galleries, museums and artists world-wide. The FBI has investigated these crimes for many years, and five years ago established the Art Crime Team to develop a cadre of Special Agents trained specifically in art crime investigations. Although spectacular thefts from major museums capture the headlines, most art thefts in the U.S. are residential burglaries and art fraud is even more rampant. This talk will cover federal jurisdiction, elements of the U.S. criminal statutes, international treaties and conventions, as well as case studies of recent investigations. Basic strategies for protection of collections will also be covered.

Bonnie Magness-Gardiner
Bonnie Magness-Gardiner is Manager of the Art Theft Program at the Federal Bureau of Investigation. Headquartered in Washington, D.C., the Art Theft Program was established after the looting of the Baghdad Museum in 2004. Dr. Magness-Gardiner coordinates the work of 13 special agents assigned to various geographic regions, and manages the National Stolen Art File. She received her Ph.D. in Near Eastern Archaeology from the University of Arizona. After teaching archaeology for five years, she entered government service as program manager for the Archaeology Program at the National Endowment for the Humanities then became a program manager for the American Memory Project at the Library of Congress. For eight years she was the Senior Cultural Property Analyst for the Department of State, implementing the 1970 UNESCO Convention against illicit traffic in cultural property. She also served as the program manager for cultural heritage restoration projects in Iraq. She has been with the FBI since 2005.

Registration Fees:

VLA Member Attorney or Arts Professional: $200
Non-Member Attorney or Arts Professional: $250

Attendees must register before July 20th and be on the security list to attend. Seating is limited to 30 people. (There is an additional $25 fee if you register after July 15th.)

*3.0 CLE credits, 1 Professional Practice, 1 Skills and 1 Ethics (Approved for Non-Transitional and Transitional Attorneys)

To register and for more information, please see this registration form, or register via phone at 212.319.2787 x1. For more information please contact VLA's Kathleen Mallaney at 212.319.2787 x12, or via e-mail at

This event is organized and sponsored by Volunteer Lawyers for the Arts.

A Knight In Shining Armor

Monday, June 14, 2010
Dr. Ballard made the cover. The current issue of Cleveland Scene featured a story about Robert Ballard, M.D. It appears that Dr. Ballard, age 69, was recently fired. This was not the first time he was fired or defunded, just the most recent and, in his mind, most surprising. Scene depicts him as a good doctor, a caring physician, a practitioner committed to Wellness. He just wants a salary. Is that so awful? Forty-three years since his graduation from a Cleveland medical school and he still hasn’t grasped how and why he gets paid. In essence, he is the poster grandparent for single payer health care.

I bring up Dr. Ballard because of Scene’s cover. There, in four color, is the unemployed doctor dressed in a lab coat walking his dog. I have developed a real appreciation for lab coats.

You can’t be a real doctor, or even a real fake doctor, or even a good stage prop without a lab coat.

I was in China for nine days this past April. My tour took me to Beijing, Shanghai, Suzhou, and Hangzhou. I was at the Great Wall (amazing pictures), a Ming Tomb, and the Buddhist Temple LingYin. Other cultural/shopping destinations included a jade factory, a silk factory, and a Cloisonné factory. You get the idea. We also stopped in the offices of the purveyors of Traditional Chinese Medicine.

The doctor explained the efficacy of Traditional Chinese Medicine and we were each given the opportunity for a free exam. No blood tests. No sample jars or paper cups. The doctor diagnosed each person, one at a time, by simply taking the patient’s pulse. Then he prescribed the appropriate herbs each inevitably needed.

The doctor took my pulse and asked about my blood pressure medication. “None”, I replied. He was baffled. Me? I was totally relaxed and trying hard not to laugh. I love a good sales pitch. No blood tests. No tests at all. Why was he wearing a lab coat? Our doctor was in costume for his American audience.

My fascination with lab coats can be traced to the recent health care debate. My local Congresswoman, Marcia Fudge, was hoping that her vote was going to be news. It wasn’t. Our Congressional Representatives, even those in safe districts, need to make the six o’clock news now and then, if only for their egos and fundraising. The “White Coat Doctors”, Doctors Organized for Health Care Solutions, were ready to play their part. This is the group that instructs its members to keep their lab coats in their cars and to be ready at a moment’s notice. Their job is to show up at the press conference, coats on, and to nod approvingly. It took tens of thousands of dollars of education for these people to be stage props. But if you call them, they will ride in, like knights in shining armor.