Disability Insurance Observer: Outlook

Researchers at the Centers for Disease Control and Prevention (CDC) have just published an interesting story showing that people with diabetes seemed to be much less likely to suffer complications such as strokes and heart attacks in 2010 than they were in 1990.

Here at LifeHealthPro.com, we have a system of "channels" designed to help get the articles we post in front of the eyeballs. We're supposed to limit ourselves to putting any one article to no more than three channels, to keep from making the channels all look the same.

But, of course, if the United States really figures out how to keep diabetes from causing terrible complications, that's a story that belongs in every possible channel on every possible website. It would make everything better.

A diabetes care improvement story belongs on any cooking website, sports website, home decorating website, music website, and even online poker website. If Americans lose fewer years of healthy, active life to diabetes, they can spend less money on dealing with loss of feet, earn more income, and spend money on everything from disability insurance to annuities to houses to big bets on poker games.

Maybe the whiz kids at the NSA could reprogram the HeartBleed virus to celebrate a public health triumph like that and tell every computer and phone in the world (including the ones that are allegedly turned off) to proclaim the message: "Diabetes complication preventive care has improved!!"

But the story is, weirdly enough, less relevant to acute health insurers than it could be, because they (and group health plan sponsors), don't necessarily get that much financial value from improving preventive care.

In many cases, an acute health insurer (or an employer plan sponsor) will invest heavily today on care that will make patients happier today but may not do much to reduce the current cost of the patients' care. By the time the U.S. health care system benefits financially from the preventive care, the patient may have health coverage from the traditional Medicare program, not from a commercial health insurer.

In reality, the health insurance companies invest heavily in preventive care, anyway, because they do get some benefit from that, because regulators and customers expect that, and (in my opinion) most human beings at least try to be nice. Most people at health insurance companies sincerely want enrollees to stay healthy and keep their feet attached, just because.

But it seems to me that there might be a way to give acute health insurers' a financial reward for improving long-term health outcomes: Have a little of the money the health insurers are already shelling out due to various Patient Protection and Affordable Care Act programs go into bonds tied to a long-term reinsurance fund for disability insurers and long-term care insurers.

If the acute health insurers do a poor job of keeping people active and healthy, and their enrollees collect disability insurance and long-term care insurance, the disability and LTCI carriers would get the principal and interest in the fund backing the bonds.

If the acute health insurers continue to do reasonably well at improving preventive care, the disability and LTCI carriers would be happy, because they would be benefiting from a lower rate of claims, and the acute health insurers could the money in the reinsurance pot.

Maybe set up the fund so that, if rapidly improving health helps disability and LTCI carriers do much better than expected, claimwise, the disability and LTCI carriers have a way to share the benefits from that wonderful outcome with the acute health insurers.

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Disability Insurance Observer: Outlook

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