(Cayblogger remarks in bold face. Sorry… too lazy to be creative.)
Cayman Islands Monetary Authority Chairman Tim Ridley said Wednesday he feared government would have to heavily subsidise CINICO – the government–owned insurance company – long into the future.
Repeat after me: “No shit, Sherlock.”
Speaking at an industry luncheon that was part of the Cayman Islands Insurance Association’s Insurance Week events, Mr. Ridley prefaced his remarks by saying they were his personal opinion, and not the official views of CIMA.
“CINICO is a well–intentioned attempt to provide health cover for civil servants, indigents, children, seamen and veterans, the uninsurable and those older than 60 in a more efficient way than by Government simply writing the cheque in a disorganised manner,” he said.
Re-stated, “CINICO is a money hemorrhaging boondoggle designed to offer crappy coverage at a sub-par facility to people who don’t pay anything for it, can’t pay anything for, won’t pay anything for it, and due to health conditions aren’t allowed to pay for it by insurance companies in Cayman.” And as far as Government writing a cheque in a disorganized manner – that statement sounds like it’s straight out of the Redundancy Department of Redundancy.
“It is hard to conclude as yet that CINICO has helped control health costs for Government. Indeed, it could be argued CINICO has unnecessarily added an expensive layer of administration to what existed before and with no obvious benefit.”
Wait a minute – CINICO was formed to help control health costs for Government? How so? By forming a company with ridiculous overhead, run by total incompetents, working with an archaic health services authority run by idiots, to “manage” a product that it gives away with little or nothing in return in the way of premium or cost shares and then being surprised that government has to constantly inject cash into a system that has no feasible economic viability and no solid plan for economic self-sustenance?
Wow… how could a system like this possibly NOT work? Hats off to the geniuses at CIMA for letting us know that “it’s hard to conclude as yet that CINICO has helped control health costs for Government.” Hey, Tim - get back to us when you guys finally come to some sort of conclusion.
Mr. Ridley did concede there was understandable resistance from long–time civil servants to any attempts to limit their full cover, particularly when they had contracted for specific benefits.
“That’s just a fact of life.”
Of course civil servants are resistant to change. I mean come on – how can the largest segment of the population responsible for the greatest abuses of the system possibly be expected to make any contribution whatsoever to the financial vacuum that is the government sponsored health care disaster without pissing and moaning about it? The very government that created this fiasco is also the reason why it is so financially strapped. Another prime example of a government implementing the “do as I say – not as I do” model of irresponsible governance. And the explanation we get? “That’s just a fact of life.”
Mr. Ridley said he hoped over time CINICO could become a sustainable and efficient company and at least break even.
And Mr. Ridley followed that up by telling the audience that for Christmas he wanted Santa Claus to bring him a new 10-speed bike and an X-box.
“But my fear is that it is more likely to join the list of heavily subsidised government–owned companies for quite a long time in the future.”
“Likely to join?” Really? Ya think?
Then speaking officially for CIMA, Mr. Ridley said the Authority has always unequivocally stated CINICO would be treated no differently from any other Class A health insurer.
“The current recapitalization of CINICO is reflective of the Authority’s position.”
CINICO received a $9.2 million bailout from government in January to allow it to maintain its Class A license, which requires a minimum positive net worth of CI$3 million.
Really? No differently from any other Class A health insurers? How many other class A health insurance companies does the government subsidize bailout and allow to operate outside the basic standards and procedures of even adequate business practices? Please tell me. If I’m wrong and the government is in the habit of subsidizing private insurers to ensure they are operating at a positive net worth of $3 million dollars, then the government won’t have any problem cutting me freaking cheque to cover my losses associated with Dyoll. That’s my position.
Since its inception in early 2004 and through June 2007, CINICO had accumulated net losses of CI$18.1 million and had a negative net worth of CI$6.2 million.
So let me get this straight again. CINICO was started to help government control costs. CINICO participants can only use the HSA which is heavily in debt. CINICO operates at a negative net worth of $6.2 million dollars with nearly $20 million in losses during its first three years. The government pulls money from God knows where to fund, subsidize, bailout, whatever… and we’re still thinking that CINICO was a good idea? People, WAKE UP!
How many times have I told you when you have a moron running a hospital and an idiot running an insurance company – neither of which have any business whatsoever to do what they are doing – overseen by a government with not the slightest inkling of a clue as to what insurance is much less how to run an insurance company, you will end up with a system that is in the crapper. And when the system was in the crapper to begin with, being only knee-deep in the dark stinky is the best you can hope for.
Speaking personally on other health insurance matters, Mr. Ridley said his impression of the current health insurance position in the Cayman Islands was that it was “unsatisfactory, costly and inefficient.
“It is unfortunately human nature to abuse a system that provides cover for routine medical and dental visits, and administration costs for employers and insurers are considerable. In my view, cover should be for serious treatment only. This could be achieved by higher deductibles and raising top limits.”
The answer is NOT necessarily higher deductibles and raising limits. The answer is simple and I’ve been saying it all along. The government needs to get out of the health insurance business and let the people who know how to do it, do it.
Raising insurance limits doesn’t necessarily lower costs, it increases an insurance company’s exposure and increases premiums paid by employers and employees (unless you’re a civil servant, and then who gives a shit because you don’t pay anything anyway so why do you care?). It’s like giving loans to people with bad credit at low rates – you end up screwing the banks which ends up screwing up the real estate industry and then we all end up listening to Kim Lund piss and moan because he can’t sell as many overpriced multi-million dollar condos.
Raising deductibles works to a point, but how high do the deductibles have to be to even approach a break-even and make the individual’s risk worthwhile? $5,000? $10,000? $20,000? Who can afford such high deductibles (besides the freeloading civil servants) when they’re already paying extortionately high premiums?
The problem isn’t the deductibles or cost-shares, the problem is that the government won’t let the insurance professionals run the insurance industry – and we all pay the cost.
Mr. Ridley said restricting cover to more serious medical treatments might stop the upward drift of the cost of routine visits to the doctor or dentist. He said that since mandatory health insurance became law, the costs of doctor and dentist visits have gone up.
Restricting cover to more serious medical treatment? Okay… let’s let the cold turn into pneumonia and then treat the serious condition to avoid paying a routine office visit. Screw routine medical screenings, let’s just wait a while and then remove prostates, and ovaries and uteruses because we want to save a few bucks on the front end only to spend tens of thousands on the back end. Let’s wait for the car to crash and THEN replace the brakes. Great idea.
Tim Ridley may be a financial genius which is why I find it hard to believe that he doesn’t understand that preventive care can be just that – preventive. And it can prevent more costly procedures down the line. Don’t believe me? Okay, Tim. I’ll let you tell the Cancer Society that your plan to solve this financial health care cost crisis includes “stop(ing) the upward drift of the cost of routine visits to the doctor” including cutting back on routine visits during which people are screened for cancer. As we all know, it’s much cheaper to treat full-blown cancer than it is to screen for it. Yeah – that’ll do it Tim. Another good idea.
He also noted that healthcare costs for people with insurance are sometimes higher than people with no insurance.
Good point Tim and here’s proof of that. Civil servants. Civil servants don’t have health insurance and they don’t pay a penny. Civil servants and their families have subsidized health care with no deductibles, no coinsurance, no co-pays, and no premiums. I have health insurance, I pay premiums, I pay deductibles, co-insurance, co-pays and balance bills and – yes Tim – my costs are higher than a civil servant who has no health insurance.
“There seems to be something of a conspiracy here and that does not bode well for the insurance industry,” he said.
Repeat after me. “No shit, Sherlock.” It’s a conspiracy engineered by fools who have no idea what they are doing, and perpetuated by fools who don’t know enough to make a transition back to a system whereby insurance companies take control of the industry and are allowed to compete freely and openly which would lead to innovations in coverage options, pricing levels, etc…
Another point raised in Mr. Ridley’s speech dealt with the insufficiency of the upper limits on most health insurance covers.
There have been many complaints about the inadequacy of the Standard Health Insurance Contract 1 in this regard because it only has a $25,000 maximum benefit for each episode of illness and a $100,000 maximum for medical fees during each calendar year.
Okay, how many years and you’ve just now figured this out? These limits aren’t even scaled to account for inflation or increasing costs for medical services, so every year that $25,000 and $100,000 limit actually deflates in value to the end user while premiums increase.
Superintendent of Health Insurance Mervyn Connolly, who was in attendance at the luncheon, said afterwards the Health Insurance Commission board had made recommendation to the Ministry of Health and he hoped to see changes in the law regarding the SHIC 1 cover limits soon.
Okay, how many times have we heard that a recommendation has been made? A recommendation… that and $2 won’t even buy you a cup of coffee. Here’s the rub on the health insurance commission. Connolly is a career civil servant and the last thing he’s going to do is anything that would – God forbid – upset the current delicate balance of health care inefficiency and possibly lead to any sort of solution to this problem. He’s stuck between a rock and a hard place. The rock is labeled, “I don’t know shit about health insurance” and the hard place is “I know I should let the health insurance companies run things but I don’t want to upset my government bosses by supporting anything that would weaken our choke hold on the industry.”
Mr. Ridley also called the lack of compliance by some small employers with regard to mandatory health insurance and pension plans very worrying.
“I am unsure whether the full extent of non–compliance is known,” he said. “I suspect it might be larger than we fear.”
Repeat after me. “No shit, Sherlock.”
Although he acknowledged enforcement resources were limited, Mr. Ridley said it was necessary to send a clear message to employers through successful prosecutions that defaulters would be pursued to the full extent of the law.
Okay, so you can repeatedly give CINICO millions of dollars to account for and support their fiscal mismanagement, knowing full well that CINICO is not and more than likely will not ever be financially viable, but you can’t fund the insurance commission to sue non-compliant employers and protect the interest of the most needy portion of our population from wantonly unscrupulous and callous ignorance of the law designed to keep us healthy and alive? Am I the only one who sees this as the most ridiculously bass-awkward philosophy in government?
Mr. Connolly said the Health Insurance Commission is in the process of hiring another health insurance inspector and might even be recruiting more. He noted the HIC had successfully prosecuted several cases and that two more cases were scheduled for court later this month.
Someone is always “in the process” of doing something that – once done – may or may not have any effect on the current situation. The appearance of progress with no action – a government specialty. Unfortunately, Tim, this is the message being sent to employers more effectively than fear of prosecution.
People, let me explain this to you again. The government just doesn’t get it. What we have here is a situation where the government stepped in and tried to do something very noble. However, they completely screwed it up because they had (and have) no idea what they are doing.
They started an insurance scheme to cover the people who couldn’t pay for it, as well as the people who have no intention of paying for it – and included the people who are not required to pay for it. What we have is 12,000 people receiving health care while at the same time making little or no contribution to the provision of their care in the form of premiums or cost shares. And the rest of us are paying for it while the government fools scratch their heads and ask, “Gee – why didn’t this work?”
Let me explain it to you another way. If CAA came out and said that all Caymanians fly on Cayman Airways for free and ex-pats have to pay for tickets, how expensive do you think it would be for an ex-pat to fly on Cayman Airways? Due to the millions of dollars in lost revenue as a result of Caymanians flying free and ex-pats avoiding Sir Turtle, Cayman Airways would have to hike rates up for passengers and cargo and create a mandatory and compulsory system compelling expats and other paying customers to fly Cayman Airways; continually get bailed out or “subsidized” or; shut down.
Likewise with CINICO. We have 12,000 people “flying free” and a government “subsidizing” the tickets of the freeloaders by taxing insurance companies and over-burdening the paying customers. This can’t last forever because Cayman has limited options with regards to implementing revenue-generating measures that could increase funding for CINICO.
My question isn’t, “When will CINICO be viable?” That answer is a simple, “Never.” My question is, “Where are they getting the extra money to continually bail out this disaster and what government departments will suffer as a result and how much will it cost us?”
Health care is a hot topic these days, but let’s not confuse health care with health insurance. What the government has done is marry one financial disaster (HSA) with a statutory disaster and the bastard offspring is CINICO which is the problem child of the family that always seems to screw up and call in the middle of the night asking for bail money and a ride home.