Welcome to the Thanksgiving edition of the Cavalcade of Risk at the Colorado Health Insurance Insider. We’ll start with insurance related articles and blend into finance and investing.

Does your health insurance policy pay for sex? InsureBlog’s Bob Vineyard explores the question, and comes up with some surprising info with his post about Sex Insurance. If you really want a laugh, check out the comments.

Joe Paduda gives us surprising news in The correlation between health insurance and work comp claims at Managed Care Matters.

You might assume employers that don’t offer health insurance would have more folks filing workers comp claims – and you would be wrong. But you’d be in good company — Joe Paduda was under the same false impression, until he read a RAND Corp. Health Insurance Experiment (Rand HIE) that demonstrates that the opposite is the case – workers are more likely to file work comp claims if their employer offers health insurance. Joe’s also wondering what will happen if mandated universal coverage becomes law – will RAND’s findings hold true?

Most importantly, can we trust the results of the Rand HIE? While Joe Paduda has objectively questioned the results of the study, Jason Shafrin also gives the study a detailed look. So are the RAND HIE results true? Find out by reading The truth about the RAND HIE posted at the Healthcare Economist.

Now, we’re all wondering what the Workers Comp Insider has to say about this? Well, their submission was actually a story about this company with a really hard assed president that has a really rigid policy. This company has a paraplegic that has been working there for 17 years and has been rated “outstanding” on all of his performance reviews. See how the company received a “worst practice” plaque on the Workers Comp Insider’s Management Wall of Shame as Jon Coppelman of Workers Comp Insider looks at the issue of reasonable accommodation under the Americans with Disabilities Act of 1990 while it plays out in the Florida courts in Late for Work: When Does It Really Matter.

It’s hard to imagine a dumber thing for the insurance industry to do than continue to argue and litigate the notion that an insurer can cancel–or rescind–an insurance policy for a misstatement of fact on an application even when that statement was unintentional or immaterial. But they are in California. You might think it’s Blue Cross, like last year. Nope. Robert Laszewski gives us the details with “Health Insurer Tied Bonuses to Dropping Sick Policyholders” on Health Policy and Marketplace Review.

In reacting to the recent Democratic debate, Richard Eskow says he challenges the conventional wisdom among his fellow “health wonks”: He says health mandates are “a bug, not a feature” at The Sentinel Effect. I’d have to say that most of us “health wonks” actually agree with Richard’s opinions about mandates, even if we stick to the topic of just fixing the selection problem.

Nobody would agree more with Richard than the folks at Cato at Liberty (you’ll never hear that statement again). Their submission this week comes from Michael Tanner. Not to Say We Told You So, But…, reminds us that they were the original doubters of the Massachusetts mandate for individual health insurance (even before Richard Eskow). According to uncited “insurance industry insiders”, the plan is a failure even though it hasn’t even begun. The reason:

with just seven weeks left until the state’s mandate for individual health insurance goes into effect, more than 100,000 residents have failed to buy the required insurance. That represents nearly 20 percent of the state’s uninsured population and more than half of the uninsured with incomes too high to qualify for subsidies.

Let’s keep in mind the nature of most people when it comes to taking care of not-so-pleasant tasks – procrastination is pretty common. All of us in the health insurance industry are used to getting calls on the 28th of the month, from a client who desperately needs a policy in effect by the first of the next month. I would imagine that in the next seven weeks, quite a few of those 100,000 people will get insurance. And if they don’t, they’ll be paying higher taxes in 2008.

On the topic of “THE MAN” and health insurance, John Cogan of Regulating Health Insurance asks How much does guesswork figure into rate setting for private health insurance?

It’s interesting to read in this article how CMS engages in an annual ritual of cutting Medicare Part B physician payments in order to comply with statutory mandates. But Congress then engages in its own annual ritual of adjusting the Medicare Part B physician payment schedule to override cuts imposed by CMS. This back-and-forth, cut-and-replace dance between Congress and CMS has effects that go beyond Medicare. For those insurers who offer, and for those seniors who buy, private Medigap insurance, the uncertainty caused by the cuts and raises affects rate calculations, leaving ratemaking by the insurer and rate setting by the regulator, a matter of guesswork.

I’ve always been very suspicious of the idea that securitization and insurance and re-insurance between financial institutions actually reduced risk. What it did, it seemed to me, was make small disasters much less common, and make having a big catastrophe much more likely. We’re now getting a test-out of whether the theory that “spreading the risk” was such a hot idea. This is the idea in a great article by Ian Welsh: The Risks of “Spreading the Risk” posted at The Agonist.

In Part 1 of a two part series, The Risk Prof delves into the arcane (but ultimately important) world of insurance pricing. Heavy, but very very readable.

If you’re as confused about Medicare as most other people, Leigh Shevchik helps out with: Understanding Medicare Part D: Prescription Plans over at Healthline Connects.

David Williams of Health Business Blog never fails to impress. This week, his post Some more answers from Genentech even got the FDA to issue a statement.

This is a follow-up to some reporting David has been doing about Genentech’s elimination of Avastin contracts with compound pharmacies. Genentech wants us to believe the FDA is pushing Genentech to take the product away from the compounders due to the risk of contamination during repackaging. Genentech is taking a risk in how it’s responding to FDA concerns over its manufacturing processes. On the one hand there is a risk of shutdown if the FDA gets tough, on the other hand the company is risking the goodwill it’s built up among doctors by making Avastin harder for eye doctors to get.

The FDA wants pharmacies to hand out medications without prescriptions. Who’s best qualified to assume the risk associated with the use of medications: physicians, pharmacists or patients? And what happens to the trial lawyers when things go wrong? Zagreus Ammom gives us his sarcastic take on the topic with Prescriptions drugs without a doctor posted at The Physician Executive.

Super Saver’s contribution Pondering Financial Risks In Our Retirement posted at My Wealth Builder takes a look at the financial risks to his retirement plan. Among his main variables: Medical Insurance and Long Term Care Insurance.

Silicon Valley Blogger writes about Profit From The Weak U.S. Dollar With Currency Plays And Other Strategies posted at The Digerati Life. SVB says, “The way to control and manage risk is to practice some hedging strategies. Here’s how to protect yourself from the risk presented by the weak American dollar.”

Our response to socially-hostile acts in a networked world has been to systematize the human networks?instead of humanizing the systems. In other words, we now treat everyone like a terrorist. The problem is, we quickly become hostage to the very thing we tried to prevent. We’re now drowning in costly solutions, trying to boil the ocean. Charles H. Green details this point with Terrorists and Convenience Stores: When Social Trust is Threatened posted at Trust Matters.

Leon Gettler writes about More funny money on Wall Street on his blog Sox First. He says “Goldman Sachs is the bank holding the biggest amount of “funny money assets” as the subprime crisis goes from bad to worse.”

This may seem a little late, but FIRE Getters presents Wild Fire Disaster Preparation – Part 2! posted at FIRE Finance.

That concludes the Thanksgiving edition of the Cavalcade of Risk. The next Cavalcade will be hosted by Joe Paduda on December 5′th at Managed Care Matters.

It’s always a blast to host the Cavalcade because of the support you get from Hank Stern. Every time I’ve hosted (this is my 3′rd time), he’s kept in good contact the week before and always goes “hunting” for additional risk related posts for me to use if I want. To become a future host, please contact Hank at the Cavalcade of Risk site or send him an e-mail.