Roy's Reinjury Clause Question

[HartfordWhalers]

From WT, still, more quotes about the standard pre-existing clauses, that have been noted in the academic literature, by the leagues insurance carrier, by the league itself, and by various teams and reporters before. (But if you refuse to admit when your wrong, or change your mind when presented with overwhelming evidence, this can also be chalked up to another Rod Thorn mistake, making him foolish like all those others listed..)

"There is a league-wide insurance that he's under that gives you some relief along those lines," Thorn said before the Sixers played the Miami Heat on Wednesday at the Wells Fargo Center. "It's the same league-wide program that every player's under. Unless you have a pre-existing condition — and he didn't — so he's on the same one as everybody else."

http://www.usatoday.com/story/sports/nb ... Stories%29

[DBoys]

From WT, still, more quotes about the standard pre-existing clauses, that have been noted in the academic literature, by the leagues insurance carrier, by the league itself, and by various teams and reporters before.

"There is a league-wide insurance that he's under that gives you some relief along those lines," Thorn said before the Sixers played the Miami Heat on Wednesday at the Wells Fargo Center. "It's the same league-wide program that every player's under. Unless you have a pre-existing condition — and he didn't — so he's on the same one as everybody else."

http://www.usatoday.com/story/sports/nb ... Stories%29

Yep, that would be how it works, but what Thorn said didn't conflict with what I've been outlining for you.

As I understand it from those who have related it to me ...

In total the league's insurance covers about 5 players per team on average, which are selected based on the amount of money on the line in current year and in total remaining contract. Every player submitted without a pre-existing condition cannot be excluded by the insuror: their only choice is to insure him, which is what Thorn was noting about Bynum. And even if the player's condition changes, once accepted, for the duration of that contract he is always insurable.

On the other hand, a player with a pre-existing condition might be excluded. The insuror is allowed to have an ongoing list of exactly 14 pre-existing conditions that are precluded from being covered by insurance. They take a look when the contract is first submitted for the insured list (which would almost always be when signed), and if they feel this combination of medical and financial risk is in the top 14, they put that player on the non-covered list. If they have 14 on the list and a new contract they want to add, they remove one, and once removed it cannot be added to the list of 14 for the duration of the contract.

[HartfordWhalers]

No.

The list of 14 is again a separate matter, and they are excluded in their entirety, and can be a player who has had no pre-existing condition.

[DBoys]

The list of 14 is again a separate matter, and they are excluded in their entirety, and can be a player who has had no pre-existing condition.

From what I have been told, that ^^ is incorrect. The 14 is the total limit of the number of "conditions" that the insuror is allowed to exclude, and a player without a pre-existing condition cannot be excluded.

And my business background tells me that's logically correct as well.
* With the 14, that means they are expecting 90% to be accepted, and allowing about 10% to be excluded (allow the insuror to pick the 10% they prefer), which in an insurance setting seems about right to me.
* If an insuror wanted to exclude ALL the preexisting conditions across the league, there would be very little coverage being offered, which would defeat the underlying purpose of having insurance. The league wants to work with an insuror who will offer very broad protection in such a group-type policy.
* The protections against morality risk built into the policy are significant, as are the protections against frivolous claims.

[HartfordWhalers]

The list of 14 is again a separate matter, and they are excluded in their entirety, and can be a player who has had no pre-existing condition.

From what I have been told, that ^^ is incorrect. The 14, from what I understand, is the limit of the number of "exclusions" that the insuror is allowed to exclude, and a player without a pre-existing condition cannot be excluded.

And my business background tells me that's logically correct as well.
* With the 14, that means they are expecting 90% to be accepted, and allowing about 10% to be excluded (allow the insuror to pick the 10% they prefer), which in an insurance setting seems about right to me.
* If an insuror wanted to exclude ALL the preexisting conditions across the league, there would be very little coverage being offered, which would defeat the underlying purpose of having insurance. The league wants to work with an insuror who will offer very broad protection in such a group-type policy.
* The protections against morality risk built into the policy are significant, as are the protections against frivolous claims.

Well, everything everywhere doesn't seem to match what you were told. So, unless you actually have some source...

[DBoys]

HW I have several sources in league front offices, and from the FAQ it seems Coon has apparently been told what I have been told. If your framework was accurate, very few players would be insured; but in reality, the opposite is true: it is a noteworthy and unusual situation for teams when a player is not eligible to be covered by league insurance.

[HartfordWhalers]

No, the 14 players are excluded entirely based upon the CBAfaq, not just for injuries to the existing pre-conditions.

Thus if Deng was one of the 14 and had pre-existing back injuries, and broke his arm, if he had missed enough games he would have been uninsured regardless of being anew type of injury.

Meanwhile, there are numerous examples of quotes saying that certain players only had some pre-existing injuries uninsured, and otherwise were insured.

[DBoys]

No, the 14 players are excluded entirely based upon the CBAfaq, not just for injuries to the existing pre-conditions.

The FAQ does not say that there are 14 added to another list of exclusions, nor does any article you have cited. The 14 are the complete total of conditions that can be refused coverage by the insuror at any one time.

[HartfordWhalers]

No, the 14 players are excluded entirely based upon the CBAfaq, not just for injuries to the existing pre-conditions.

The FAQ does not say that there are 14 added to another list of exclusions, nor does any article you have cited. The 14 are the complete total of conditions that can be refused coverage by the insuror at any one time.

So, are the 14 excluded entirely in your opinion, or only on identified existing conditions?



Either way, I find it pretty wacky that you will admit that the policy was as I describe 10 years ago in regards to pre-existing conditions, and even though all the other details of it remain the same from then, and the same people are brokering it:

41 consecutive games from the same injury and then pays the team 80 percent of the player's salary for each additional game he misses.

http://espn.go.com/sportsbusiness/s/200 ... 21986.html

You think that somehow the pre-existing conditions have changed how they are covered. If so, then all these media reports are misleading and the NBA has an incredible sweatheart deal at what costs only 4% of salaries.

[DBoys]

1 There is nothing in what you cited at any point, including from 10 years ago, that can explain who the 14 are and why they would be designated.
2 The simple fact is that the 14 are the pre-existing conditions, as selected by the insuror, that are going to be excluded.
3 I'll invite you to look at this from a different angle, and maybe you'll understand the thinking of how the insurance operates. Ignore the 14 and look at the cash changing hands. Once you do, you should see how absurd it would be for the NBA to buy insurance at 4% of salaries (accepting your number without double-checking) that doesn't cover almost everyone, considering the cost of insurance.

CLAIMS PAID TO NBA THIS SEASON: $_________
....Which (if any?) players will be valid insurance claims this season? If you can't find any, which would have been paid last season, and the one before? With a bit of figuring, you should be able to ascertain how much the insurance company probably has to pay in claims.

Who are the major insurance claims this year? Rose, Bynum, anyone else?

PREMIUMS PAID BY NBA = approx $80 million

Keep in mind that the most the insuror would have to pay in the initial claim year on a massive contract would be about $7M, and if a player who already missed a half year missed another full season, $14M. It seems like it would take an injury epidemic before the claims come anywhere near the cost in premiums.

[HartfordWhalers]

1 There is nothing in what you cited at any point, including from 10 years ago, that can explain who the 14 are and why they would be designated.

Which is NOT what we were talking about. It was even on that page:

Yes. And within that insurance when a team is handing out new contracts and getting the insurance on them:

Any time an athlete comes back from a sickness or a disability, there is an underwriter's pre-existing condition exclusion and therefore anything that's taken place for the last 18 months is excluded automatically

Again, according to the people that actually do this.

Yep, that's what the ones who used to do it 10 years ago, said they used to do. Do they still handle the NBA insurance, and is it still underwritten and handled the same way now?

Anytime. Separately 14 players can be excluded entirely, which doesn't change this

CLAIMS PAID TO NBA THIS SEASON: $_________
....Which (if any?) players will be valid insurance claims this season? If you can't find any, which would have been paid last season, and the one before? With a bit of figuring, you should be able to ascertain how much the insurance company probably has to pay in claims.

Who are the major insurance claims this year? Rose, Bynum, anyone else?

PREMIUMS PAID BY NBA = approx $80 million

Keep in mind that the most the insuror would have to pay in the initial claim year on a massive contract would be about $7M, and if a player who already missed a half year missed another full season, $14M. It seems like it would take an injury epidemic before the claims come anywhere near the cost in premiums.

Your math on premiums paid is off. Unless you are saying the league pays premiums on 100% of their players,in which case your assumption is off.

As for what claims might look like for this year,keeping in mind that it has seemed a pretty healthy year in general:

Rondo 3 games this year, more next year likely
Bargs 6 games?
Jason Richardson 8 games?
Bynum 41 games
Granger 35 games
Rose 41 games
Varejao 16 games
Louis Williams (will start counting next season)
Glen Davis 7 games?
Kevin Love 23 games?
Rubio 25 games
Roy 35 games
Billups 8 games?
Bogut 23 games
Gasol 5 games ?
Frye 41 games
Gordon 38 games

(skipping Rush, Buddinger and a few who don't make enough to be considered, and not bothering to see if the count for a few guys is off if they missed a game midseason before injury.)

[DBoys]

1 You still haven't demonstrated anything in your quotes that says the contract allows the insurance company to exclude all conditions plus 14 perfectly healthy players as well, just for funsies. (And that's not how it works, so ...) In the current contractual format, the exclusions are based on prior injuries, and are limited to 14 of them.
2 Keep in mind that due to both cap and competitive issues, the teams already have incentives not to write big deals for players who are likely to be injured. It's not like all the deals are super-risky. Kicking out 14 provides them plenty of cushion to avoid the worst risks, which is the point.
3 You were the one who said the premium is 4%. Not my number. Calculate it as you wish.
4 It's relevant to note that in the old insurance setup, the elimination period was 41 consecutive games, and a return to play in one game would completely reset the clock. It could still be the same setup. If so, many of those claims above would be much smaller than you've listed, with some of them 0.
5 In any event, your list demonstrates my point that given the protections and limits built into the payout, the insuror's liability for potential claims is much smaller than it appears at first glance. With that being the case, the NBA isn't going to be getting any real value for that hefty premium if the insuror is excluding players right and left from coverage - thus the limit at 14.

[HartfordWhalers]

1 You still haven't demonstrated anything in your quotes that says the contract allows the insurance company to exclude all conditions plus 14 perfectly healthy players as well, just for funsies. (And that's not how it works, so ...) In the current contractual format, the exclusions are based on prior injuries, and are limited to 14 of them.
2 Keep in mind that due to both cap and competitive issues, the teams already have incentives not to write big deals for players who are likely to be injured. It's not like all the deals are super-risky. Kicking out 14 provides them plenty of cushion to avoid the worst risks, which is the point.
3 You were the one who said the premium is 4%. Not my number. Calculate it as you wish.
4 It's relevant to note that in the old insurance setup, the elimination period was 41 consecutive games, and a return to play in one game would completely reset the clock. It could still be the same setup. If so, many of those claims above would be much smaller than you've listed, with some of them 0.
5 In any event, your list demonstrates my point that given the protections and limits built into the payout, the insuror's liability for potential claims is much smaller than it appears at first glance. With that being the case, the NBA isn't going to be getting any real value for that hefty premium if the insuror is excluding players right and left from coverage - thus the limit at 14.

1) Actually, I have shown direct quotes from the nba, the leagues insurance broker, and news reports. Because you refuse to believe anything you don't want to doesn't make it not there any more then closing your eyes makes things disappear.
2) So here you are asserting what you think the market should be? Awesome. But irrelevant.
3) Yes, because that is the number. However, as I noted you applied it to all contracts which is wrong. Multiplying 4% by the wrong number doesn't make 4% wrong.
4) I actually noted the players where this is the case and probably shaves a game or two with the question marks. I don't think it moves the needle that much to be honest, the 35 game chunks are where the money is, not Barg's 6? games. But since you pretended it was maybe 3 players, seeing the amount is informative.
5) Did you actually look at the list and see how many are re-injuries of pre-existing conditions? No? Just saying what you think it should be based upon your opinion, and against all evidence again.

Looking at the list, I would think:

Bynum 41 games
Granger 35 games
Rose 41 games
Varejao 16 games
Louis Williams (will start counting next season)
Glen Davis 7 games?
Kevin Love 23 games?
Rubio 25 games
Roy 35 games -- Likely previous condition.
Billups 8 games?
Bogut 23 games
Gasol 5 games ?
Frye 41 games
Gordon 38 games

If Gordon had come back and played before being injured he would have been in this too.

Again, I'm really not sure how when you have reports that Amare's 1 eye but not the other is uninsured, the league's insurance broker saying all pre-existing conditions within 18 months aren;t covered, etc you can come out with a different opinion.

But pretending that the economics backs you up here isn't in the actual data, it eliminates a very small fraction of the total possible claims.

[DBoys]

HW you have never offered any quotes from those who are talking about the pre-existing conditions that also reference the 14 and how that relates to the pre-existing conditions. All you've offered is your own thoughts to assert that the 14 is being added. (And the actual relation between the two is that the 14 is the limit on the number of exclusions, not an addition to them.)

I'm sorry you don't grasp the significance of the information I've provided about how insurance works, how it's priced, and how it's used. Whether you appreciate it or not, it's incredibly relevant to a fuller understanding of what's going on, and explains why the limit of 14 has been put into place. If you think that the NBA is going to pay a massive premium for a policy that offers little actual coverage for loss, you really don't grasp how a business owner runs a business.

If the elimination period works as it did before, where it's a total start-over when a player plays a game, it has way more impact than you think. Using your list, you get Granger reduced to 15, Davis to 0, Varejao 15, Love 12, Rubio 0, Billups 0, Bogut 0, Gasol 0, Gordon 0. In essence, very little that can be claimed under this setup other than the lost seasons for Rose, Bynum, and Frye.

[HartfordWhalers]

If you think that the NBA is going to pay a massive premium for a policy that offers little actual coverage for loss, you really don't grasp how a business owner runs a business.

Cute. So, because you have zero supporting evidence you go personal as always.

HW you have never offered any quotes from those who are talking about the pre-existing conditions that also reference the 14 and how that relates to the pre-existing conditions.

Nor have you? Then again, I'm not trying to force the two to be related. But I have referenced the broker of the actual policy saying ALL pre-existing conditions are excluded.