There are more than 6 million car crashes every year on roads and highways. It takes a split second for something to go wrong. And there's more than physical injury at risk -- a bad accident can wipe someone out financially.
Kathy Handel had a car crash last year. Her two children were in the backseat.
"It was really scary because the kids were screaming. They had never experienced anything like it," Handel said.
No one was hurt, and Handel was also lucky that she had enough insurance to cover the damage. But not everyone is so fortunate.
Consumer Reports' Laura Washington said drivers should be aware that the state insurance requirements may leave them vulnerable.
"If you own your own home, or if you have assets, they could be at risk if you're underinsured," Washington said.
So what is sufficient auto insurance coverage for homeowners? For both bodily-injury and uninsured-motorist coverage, drivers should be covered for $250,000 per person and $500,000 per accident, according to Washington.
"It'll raise your premiums about 10 percent, but it's clearly worth it if it could, if it means saving your home," Washington said.
Washington added that another area where people are often underinsured is property-damage coverage.
"States typically recommend between $10,000 and $25,000 worth of coverage. But we recommend $100,000 worth of coverage just in case you hit a really expensive car," Washington said.
In the chaos that follows a crash, people often forget what information they need. They should ask to see the driver's license and insurance card as well as the vehicle registration of the other person involved. They should also be sure to note the make, model and license plate of the vehicle.
Consumer Reports says it's a good idea to carry a disposable camera in your car in case of a crash. You can take pictures of the scene, your car and the other vehicle involved. This can help protect against claims for damage that you didn't cause.
Tuesday, May 31, 2005
High-deductible health insurance gaining popularity
WASHINGTON — For years, they were the kinds of health insurance plans one found at small businesses or among the self-employed: They had huge deductibles and required workers to pay a lot of medical bills themselves — everything from allergy shots and chest X-rays to the cost of a new baby.
They weren't the policies most people preferred, but they were the best some people could afford, better than no insurance at all.
Now, as medical costs keep climbing, those high-deductible plans are spreading to the giant corporations that have long been the backbone of job-related, low-deductible health insurance.
If the trend continues, it could reshape the medical-insurance landscape and sharply redistribute costs, risks and responsibilities for many of the 160 million Americans with private coverage.
From defense contractor Northrop Grumman to the Wendy's hamburger chain, from high-tech conglomerate Fujitsu to Staples office supplies, large employers are adding what they call consumer-directed health plans to their menus of insurance options.
In a recent survey, 26 percent of large employers said they would offer such plans in 2006, up from 14 percent this year. Another survey found that about half of large companies were considering adding them.
A few companies are pursuing a "full replacement" strategy that leaves workers with no other choice. But even where such plans are optional, they are proving popular with workers who might once have scorned a plan that could leave them with several thousand dollars in medical bills each year.
At Fujitsu, about half of 5,000 eligible U.S. employees have signed up for the option.
What suddenly makes such plans attractive to workers is that many are caught in a painful bind:
In recent years, pay increases have been small at best. At the same time, employers are making workers pay a larger and larger share of their insurance premiums. It's not uncommon for higher payroll deductions for health care to more than offset any pay raises.
With the high-deductible plan, workers pay lower monthly premiums, and their employers commonly help them build up a special savings account to cushion the impact of a larger annual deductible. The accounts are controlled by the employees.
Even if high-deductible plans offer immediate relief for many workers, and big cost savings to employers, the allure may not last. And the plans may do little or nothing to solve the basic problem of soaring health costs.
"You're beginning to see a lot of growth in these plans, not because they're going to solve America's health-care challenge, but because it's a way for employers to cut their out-of-control benefit costs," said Robert Laszewski, a consultant to health-insurance companies.
"Any time an employer can raise deductibles from $200 to $1,000, it is going to reduce their costs. But will it reduce U.S. health costs generally? The jury is still really out on that," he said.
The reason, he said, is that 10 percent of the people — the sickest Americans — account for 70 percent of total health-care costs. "Once the sick people have gone through their deductible, they're back to a regular health plan; the incentives for them don't really change," Laszewski said.
For big companies, the new plans represent an upfront savings of about 10 percent and the expectation of more-gradual cost increases over time.
Last year, large employers spent an average of $5,584 per worker for coverage through a high-deductible plan, compared with $6,181 for a worker in the typical preferred-provider network, according to a Mercer Human Resource Consulting survey.
Employers say the new plans are not designed primarily to shift costs to workers. The ultimate goal, they say, is to cut health-care costs by changing consumer behavior — teaching workers to be more cost-conscious about things such as generic drugs.
"In three to five years, every company is going to offer them," predicted Alexander Domaszewicz, a Mercer senior consultant based in Newport Beach, Calif.
"Back to the future"
When the city of Las Vegas began offering a consumer-directed plan to 2,200 eligible employees last year, 60 percent signed up.
"When I was growing up in the 1950s, no one had insurance for day-to-day going to the doctor," said Victoria Robinson, the city's insurance manager. "You covered those expenses yourself and had major medical if you had to have your appendix out or something like that.
"It's almost like going back to the future," she said.
Although workers may think they will face the high deductible only if serious illness strikes, those receiving routine medical care can also face fairly hefty medical bills.
Many of the new plans "confront people with a lot more cost-sharing than they are currently experiencing," said Sherry Glied, a health-policy professor at Columbia University. "If you are the kind of person who can't keep $2,000 in an account, it could be a really bad idea for you."
In Washington, D.C., Republican policy makers have encouraged the trend toward high-deductible insurance plans.
Congress expanded tax-sheltered medical accounts, and renamed them health savings accounts, or HSAs, in the 2003 Medicare prescription-drug bill. A year earlier, the Treasury Department had quietly issued a ruling that enabled employers to offer a plan known as a "health reimbursement arrangement."
The savings accounts are available to people who buy health coverage with deductibles of at least $1,000 for individuals and $2,000 for families. Employees and employers can make pretax contributions to cover the deductible. The accounts belong to employees, who can take them along when they switch jobs.
With reimbursement accounts, employees don't own the health-care accounts. They can roll over unused balances at the end of the year, but they cannot take their accounts with them if they switch jobs.
In a typical reimbursement account, an employer would create an account for an employee and family, and commit to cover the first $2,000 of their health-care costs. The employee would then be responsible for the next $1,000.
After that, traditional health coverage would kick in, with the policy paying 90 percent of the costs and the employee 10 percent.
Both the reimbursement and savings accounts have caps on how much an individual can be required to pay in a year. Still, financial incentives can change, especially as individuals realize they need more health care.
"The real concern is that people will want to switch out of these plans when they get sick," said Glied, the Columbia professor. "Then it will be very expensive for employers."
They weren't the policies most people preferred, but they were the best some people could afford, better than no insurance at all.
Now, as medical costs keep climbing, those high-deductible plans are spreading to the giant corporations that have long been the backbone of job-related, low-deductible health insurance.
If the trend continues, it could reshape the medical-insurance landscape and sharply redistribute costs, risks and responsibilities for many of the 160 million Americans with private coverage.
From defense contractor Northrop Grumman to the Wendy's hamburger chain, from high-tech conglomerate Fujitsu to Staples office supplies, large employers are adding what they call consumer-directed health plans to their menus of insurance options.
In a recent survey, 26 percent of large employers said they would offer such plans in 2006, up from 14 percent this year. Another survey found that about half of large companies were considering adding them.
A few companies are pursuing a "full replacement" strategy that leaves workers with no other choice. But even where such plans are optional, they are proving popular with workers who might once have scorned a plan that could leave them with several thousand dollars in medical bills each year.
At Fujitsu, about half of 5,000 eligible U.S. employees have signed up for the option.
What suddenly makes such plans attractive to workers is that many are caught in a painful bind:
In recent years, pay increases have been small at best. At the same time, employers are making workers pay a larger and larger share of their insurance premiums. It's not uncommon for higher payroll deductions for health care to more than offset any pay raises.
With the high-deductible plan, workers pay lower monthly premiums, and their employers commonly help them build up a special savings account to cushion the impact of a larger annual deductible. The accounts are controlled by the employees.
Even if high-deductible plans offer immediate relief for many workers, and big cost savings to employers, the allure may not last. And the plans may do little or nothing to solve the basic problem of soaring health costs.
"You're beginning to see a lot of growth in these plans, not because they're going to solve America's health-care challenge, but because it's a way for employers to cut their out-of-control benefit costs," said Robert Laszewski, a consultant to health-insurance companies.
"Any time an employer can raise deductibles from $200 to $1,000, it is going to reduce their costs. But will it reduce U.S. health costs generally? The jury is still really out on that," he said.
The reason, he said, is that 10 percent of the people — the sickest Americans — account for 70 percent of total health-care costs. "Once the sick people have gone through their deductible, they're back to a regular health plan; the incentives for them don't really change," Laszewski said.
For big companies, the new plans represent an upfront savings of about 10 percent and the expectation of more-gradual cost increases over time.
Last year, large employers spent an average of $5,584 per worker for coverage through a high-deductible plan, compared with $6,181 for a worker in the typical preferred-provider network, according to a Mercer Human Resource Consulting survey.
Employers say the new plans are not designed primarily to shift costs to workers. The ultimate goal, they say, is to cut health-care costs by changing consumer behavior — teaching workers to be more cost-conscious about things such as generic drugs.
"In three to five years, every company is going to offer them," predicted Alexander Domaszewicz, a Mercer senior consultant based in Newport Beach, Calif.
"Back to the future"
When the city of Las Vegas began offering a consumer-directed plan to 2,200 eligible employees last year, 60 percent signed up.
"When I was growing up in the 1950s, no one had insurance for day-to-day going to the doctor," said Victoria Robinson, the city's insurance manager. "You covered those expenses yourself and had major medical if you had to have your appendix out or something like that.
"It's almost like going back to the future," she said.
Although workers may think they will face the high deductible only if serious illness strikes, those receiving routine medical care can also face fairly hefty medical bills.
Many of the new plans "confront people with a lot more cost-sharing than they are currently experiencing," said Sherry Glied, a health-policy professor at Columbia University. "If you are the kind of person who can't keep $2,000 in an account, it could be a really bad idea for you."
In Washington, D.C., Republican policy makers have encouraged the trend toward high-deductible insurance plans.
Congress expanded tax-sheltered medical accounts, and renamed them health savings accounts, or HSAs, in the 2003 Medicare prescription-drug bill. A year earlier, the Treasury Department had quietly issued a ruling that enabled employers to offer a plan known as a "health reimbursement arrangement."
The savings accounts are available to people who buy health coverage with deductibles of at least $1,000 for individuals and $2,000 for families. Employees and employers can make pretax contributions to cover the deductible. The accounts belong to employees, who can take them along when they switch jobs.
With reimbursement accounts, employees don't own the health-care accounts. They can roll over unused balances at the end of the year, but they cannot take their accounts with them if they switch jobs.
In a typical reimbursement account, an employer would create an account for an employee and family, and commit to cover the first $2,000 of their health-care costs. The employee would then be responsible for the next $1,000.
After that, traditional health coverage would kick in, with the policy paying 90 percent of the costs and the employee 10 percent.
Both the reimbursement and savings accounts have caps on how much an individual can be required to pay in a year. Still, financial incentives can change, especially as individuals realize they need more health care.
"The real concern is that people will want to switch out of these plans when they get sick," said Glied, the Columbia professor. "Then it will be very expensive for employers."
Health Insurance Resources for Uninsured
By Brian Tumulty
Gannett News Service
America's 45 million uninsured have a new tool for finding health coverage.
The National Association of Health Underwriters has rolled out an Internet site that provides state-by-state information on coverage options for many situations -- including job changers, the poor and high-risk people unable to obtain traditional insurance.
"We get consumer inquiries every day," said Janet Trautwein, vice president of government affairs for the association that created the Internet site.
The site -- www.nahu.org/consumer/healthcare -- is helpful to a computer-savvy consumer who understands insurance terms.
That's especially the case if it's used with other Internet sites, such as www.ehealthinsurance.com, which provides price quotes on individual health insurance policies, and the consumer health insurance information provided by the Georgetown University Health Policy Institute. That site is www.healthinsuranceinfo.net.
Unfortunately, the typical uninsured person often does not have home access to a computer or the sophistication to understand differences among programs, according to health care professionals.
Even so, several community health professionals and think tank experts agreed the new Web site does have some value.
"Information is always helpful," said Joseph Antos of the American Enterprise Institute, a Washington think tank.
The Georgetown site -- which has been around since the late 1990s -- does a better job explaining medical terminology than the new offering from the insurance underwriters, according to Linda Blumberg of the Urban Institute, a Washington think tank.
For people with pre-existing health problems, the site lists the 32 states with high-risk pools.
The down side to high-risk pools is that premiums often are very high, most states exclude pre-existing conditions and some states delay enrollment, according to Karen Pollitz, project director for Georgetown's institute.
The new Web site also provides a state-by-state list of health programs for the poor such as Medicaid and the federally subsidized State Children's Health Insurance Program.
Gannett News Service
America's 45 million uninsured have a new tool for finding health coverage.
The National Association of Health Underwriters has rolled out an Internet site that provides state-by-state information on coverage options for many situations -- including job changers, the poor and high-risk people unable to obtain traditional insurance.
"We get consumer inquiries every day," said Janet Trautwein, vice president of government affairs for the association that created the Internet site.
The site -- www.nahu.org/consumer/healthcare -- is helpful to a computer-savvy consumer who understands insurance terms.
That's especially the case if it's used with other Internet sites, such as www.ehealthinsurance.com, which provides price quotes on individual health insurance policies, and the consumer health insurance information provided by the Georgetown University Health Policy Institute. That site is www.healthinsuranceinfo.net.
Unfortunately, the typical uninsured person often does not have home access to a computer or the sophistication to understand differences among programs, according to health care professionals.
Even so, several community health professionals and think tank experts agreed the new Web site does have some value.
"Information is always helpful," said Joseph Antos of the American Enterprise Institute, a Washington think tank.
The Georgetown site -- which has been around since the late 1990s -- does a better job explaining medical terminology than the new offering from the insurance underwriters, according to Linda Blumberg of the Urban Institute, a Washington think tank.
For people with pre-existing health problems, the site lists the 32 states with high-risk pools.
The down side to high-risk pools is that premiums often are very high, most states exclude pre-existing conditions and some states delay enrollment, according to Karen Pollitz, project director for Georgetown's institute.
The new Web site also provides a state-by-state list of health programs for the poor such as Medicaid and the federally subsidized State Children's Health Insurance Program.
Friday, May 27, 2005
Auto Insurance Rates Fall For Many
The number of auto accidents is decreasing, and that's a trend both drivers and auto insurance companies are happy about. As a result, many consumers could see a decrease in their auto insurance premiums this year.
During the last year, auto claims at General Casualty and Unigard Insurance have dropped more than 10 percent, a trend occurring across the property and casualty insurance industry. In addition, almost 90 percent of General Casualty customers have been accident-free during the last three years.
The Insurance Information Institute predicts auto insurance rates will rise only 1.5 percent in 2005, just one half the inflation rate and the smallest increase in five years. Auto owners with good driving records and safer cars could notice a decrease in their auto insurance premiums. How much savings will vary by state, insurance company and individual driver. In 2005, General Casualty auto insurance rates could decrease up to 8 percent. Unigard policyholders could save even more, thanks to decreased claims and a new policy pricing system available later this summer.
John Blodnick of Unigard and Charles Valinotti of General Casualty explained several factors contributing to this decrease, including safer and smarter vehicles and drivers.
"Driving safely protects not only you and your passengers, but others out on the road. A clean driving record can also affect your insurance rates," Valinotti said.
Safer Vehicles
Valinotti recommends consumers purchase safer automobiles to help prevent accidents and protect their pocketbooks.
"Airbags and anti-lock brakes are two auto features that insurance companies consider when pricing auto coverage. They're virtually standard on all new vehicles," said Valinotti.
He noted that upcoming safety innovations could lead to even fewer accidents while saving consumers money on their auto insurance:
Smart cars -- Auto manufacturers are upgrading new vehicle models with safety devices such as radar, digital cameras and navigational systems to detect objects in drivers' blind spots and avoid heavy traffic or collisions. While some models already contain sensors that warn drivers when they're too close to objects, Toyota, Lexus, Honda and Nissan will begin incorporating other advanced technology soon.
Smart highways -- Future highway technology could help better manage traffic flow and improve safety. Controlled steering, electronic brakes and other devices would help maneuver smart cars on specially engineered highways, helping avoid collisions.
Breakaway engines -- Some vehicles include engines designed to drop down under the vehicle's floor instead of being pushed into the front passenger area during a frontal collision, helping reduce leg injuries.
Redesigned vehicles -- Auto manufacturers are continually building safer cars. General Motors' Uplander minivan model was rated "good" in recent frontal crash tests by the Insurance Institute for Highway Safety (IIHS). The rating is a vast improvement over its predecessor, GM's Chevrolet Venture and Pontiac Transport/Montana, rated one of the worst performing vehicles in the history of IIHS's frontal crash tests. Small pickup trucks including the Toyota Tacoma, Chevrolet Colorado and Dodge Dakota also scored better in the tests.
Drive Wisely
"Safer, smarter cars only offer so much protection," said Blodnick. "Safety starts with being an intelligent driver. Pay attention to others on the road and drive appropriately for the weather and traffic conditions."
To encourage safe driving, Unigard policyholders can accumulate up to 16 percent in savings credits for being accident-free. This credit is reduced if they're involved in any "at fault" auto accidents, but they may continue receiving a savings for having a safe driving history.
Later this summer, General Casualty will also begin rewarding good drivers with a new auto accident forgiveness program. If a policyholder who hasn't been "at fault" in any auto accidents during the past five years is in a collision and has been insured with the company during that same time period, his or her insurance rates will not include any accident surcharges. This could prevent rates from increasing anywhere from 20 to 50 percent, depending on where the policyholder lives.
Other Factors
In addition, Blodnick points to the increase in states with graduated driver licensing programs. As more states implement the program to gradually phase new drivers to full driving privileges, the number of teen driving accidents is decreasing. According to the IIHS, since states began enacting graduated licensing laws in the 1990s, the fatal crash rate for 16-year old drivers has dropped 26 percent (from 1993 to 2003).
Valinotti noted families may have more vehicles than drivers, meaning an insured vehicle spends more time sitting in the driveway or garage and is less likely to be involved in an accident. Rising gas prices could also lead to fewer cars on the road, especially larger, less fuel efficient vehicles.
For more information about safer vehicles and driving and how they can lead to insurance savings, contact your independent insurance agent.
During the last year, auto claims at General Casualty and Unigard Insurance have dropped more than 10 percent, a trend occurring across the property and casualty insurance industry. In addition, almost 90 percent of General Casualty customers have been accident-free during the last three years.
The Insurance Information Institute predicts auto insurance rates will rise only 1.5 percent in 2005, just one half the inflation rate and the smallest increase in five years. Auto owners with good driving records and safer cars could notice a decrease in their auto insurance premiums. How much savings will vary by state, insurance company and individual driver. In 2005, General Casualty auto insurance rates could decrease up to 8 percent. Unigard policyholders could save even more, thanks to decreased claims and a new policy pricing system available later this summer.
John Blodnick of Unigard and Charles Valinotti of General Casualty explained several factors contributing to this decrease, including safer and smarter vehicles and drivers.
"Driving safely protects not only you and your passengers, but others out on the road. A clean driving record can also affect your insurance rates," Valinotti said.
Safer Vehicles
Valinotti recommends consumers purchase safer automobiles to help prevent accidents and protect their pocketbooks.
"Airbags and anti-lock brakes are two auto features that insurance companies consider when pricing auto coverage. They're virtually standard on all new vehicles," said Valinotti.
He noted that upcoming safety innovations could lead to even fewer accidents while saving consumers money on their auto insurance:
Smart cars -- Auto manufacturers are upgrading new vehicle models with safety devices such as radar, digital cameras and navigational systems to detect objects in drivers' blind spots and avoid heavy traffic or collisions. While some models already contain sensors that warn drivers when they're too close to objects, Toyota, Lexus, Honda and Nissan will begin incorporating other advanced technology soon.
Smart highways -- Future highway technology could help better manage traffic flow and improve safety. Controlled steering, electronic brakes and other devices would help maneuver smart cars on specially engineered highways, helping avoid collisions.
Breakaway engines -- Some vehicles include engines designed to drop down under the vehicle's floor instead of being pushed into the front passenger area during a frontal collision, helping reduce leg injuries.
Redesigned vehicles -- Auto manufacturers are continually building safer cars. General Motors' Uplander minivan model was rated "good" in recent frontal crash tests by the Insurance Institute for Highway Safety (IIHS). The rating is a vast improvement over its predecessor, GM's Chevrolet Venture and Pontiac Transport/Montana, rated one of the worst performing vehicles in the history of IIHS's frontal crash tests. Small pickup trucks including the Toyota Tacoma, Chevrolet Colorado and Dodge Dakota also scored better in the tests.
Drive Wisely
"Safer, smarter cars only offer so much protection," said Blodnick. "Safety starts with being an intelligent driver. Pay attention to others on the road and drive appropriately for the weather and traffic conditions."
To encourage safe driving, Unigard policyholders can accumulate up to 16 percent in savings credits for being accident-free. This credit is reduced if they're involved in any "at fault" auto accidents, but they may continue receiving a savings for having a safe driving history.
Later this summer, General Casualty will also begin rewarding good drivers with a new auto accident forgiveness program. If a policyholder who hasn't been "at fault" in any auto accidents during the past five years is in a collision and has been insured with the company during that same time period, his or her insurance rates will not include any accident surcharges. This could prevent rates from increasing anywhere from 20 to 50 percent, depending on where the policyholder lives.
Other Factors
In addition, Blodnick points to the increase in states with graduated driver licensing programs. As more states implement the program to gradually phase new drivers to full driving privileges, the number of teen driving accidents is decreasing. According to the IIHS, since states began enacting graduated licensing laws in the 1990s, the fatal crash rate for 16-year old drivers has dropped 26 percent (from 1993 to 2003).
Valinotti noted families may have more vehicles than drivers, meaning an insured vehicle spends more time sitting in the driveway or garage and is less likely to be involved in an accident. Rising gas prices could also lead to fewer cars on the road, especially larger, less fuel efficient vehicles.
For more information about safer vehicles and driving and how they can lead to insurance savings, contact your independent insurance agent.
Health Insurance Program expansion
With an eye on budget battles about to get under way, advocates for young people urged supervisors Thursday to step up The City's Health Kids program, which insures The City's most vulnerable 19- to 24-year-olds.
At a Budget and Finance subcommittee meeting, advocates presented a new report "The Real World: Young Adults and the Healthcare Crisis" pointing out that 46 percent of The City's 60,000 young residents still lack insurance. But it would cost at least $14 million to close the gap.
"We'd love to find $14 million," said Supervisor Chris Daly, adding that the money could be "hard to come by" considering that budget shortfalls are still going on.
Last summer, Mayor Gavin Newsom announced the move toward universal health coverage. Since then, the Health Kids program has dedicated $1.9 million to help 1,300 young adults who were about to lose their coverage through Medi-Cal or other government services.
Next year, up to 700 young people are slated to be added for a total cost of around $3.2 million, but speakers from the Adolescent Health Working Group and Coleman Advocates for Youth said many others would be left in the lurch. Their research found that lacking insurance often means people don't get medical care, even if they become ill.
Ann Ridge, 22, a former foster child who is working her way through college, said she's been without any insurance since she turned 21. Although she had been covered as a foster child earlier in life, her timing in declaring legal independence at age 18 may have cost her the ongoing coverage that some others in her situation are getting.
At a Budget and Finance subcommittee meeting, advocates presented a new report "The Real World: Young Adults and the Healthcare Crisis" pointing out that 46 percent of The City's 60,000 young residents still lack insurance. But it would cost at least $14 million to close the gap.
"We'd love to find $14 million," said Supervisor Chris Daly, adding that the money could be "hard to come by" considering that budget shortfalls are still going on.
Last summer, Mayor Gavin Newsom announced the move toward universal health coverage. Since then, the Health Kids program has dedicated $1.9 million to help 1,300 young adults who were about to lose their coverage through Medi-Cal or other government services.
Next year, up to 700 young people are slated to be added for a total cost of around $3.2 million, but speakers from the Adolescent Health Working Group and Coleman Advocates for Youth said many others would be left in the lurch. Their research found that lacking insurance often means people don't get medical care, even if they become ill.
Ann Ridge, 22, a former foster child who is working her way through college, said she's been without any insurance since she turned 21. Although she had been covered as a foster child earlier in life, her timing in declaring legal independence at age 18 may have cost her the ongoing coverage that some others in her situation are getting.
Thursday, May 26, 2005
HMO Profitability surges
Source: Business Wire
Publication date: 2005-05-24
Profitability continued to surge for the nation's HMOs(1), which earned $8.9 billion during the first three quarters of 2004, representing a $2.3 billion, or 33.6 percent(2), increase over the $6.7 billion earned during the same period in 2003, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.
In analyzing HMO earnings, Weiss found that, after excluding Kaiser, more than half of the industry's profits were concentrated among the five companies reporting the best performance during the period. HMOs reporting the largest year-over-year increases in earnings(2) were:
Net Profit (Loss)
-------------------------
Weiss Total 3rd Qtr 3rd Qtr
Safety Assets 2004 2003 $
Company Headquarters Rating ($Bil) ($Mil) ($Mil) Change
----------------------------------------------------------------------
Highmark, Camp Hill,
Inc. Pa. B- 4.2 170.5 (21.4) 192.0
Capital
Advantage Harrisburg,
Ins Co. Pa. C- 0.5 6.5 (101.0) 107.4
Humana
Medical Plan Miramar,
Inc. Fla. B- 0.6 126.7 48.3 78.4
BlueCross
BlueShield Chattanooga,
of Tenn. Tenn. B+ 12.5 127.0 62.2 64.8
Blue Cross of Thousand
Calif. Oaks,
Calif. A 4.9 419.7 357.6 62.2
----------------------------------------------------------------------
Weiss Safety Rating: A=Excellent, B=Good, C=Fair, D=Weak, E=Very Weak,
F = Failed, U=Unrated
"Despite substantially improved performance by many insurers over the past few years, industry earnings are concentrated among relatively few companies, therefore consumers should continue to monitor the financial strength of any HMO they are considering doing business with," said Melissa Gannon, vice president of Weiss Ratings, Inc.
Notable Rating Changes
Of the 482 HMOs reviewed by Weiss using third quarter 2004 data, 65 companies were upgraded, while only 3 were downgraded. Notable upgrades include:
-- Asuris Northwest Health (Walla Walla, Wis.) from C+ to B-
-- AvMed, Inc. (Gainesville, Fla.) from C+ to B-
-- Carelink Health Plans, Inc. (Charleston, W. Vir.)from C+ to B-
-- Coventry Health Care of Louisiana (Metairie, La.)from C+ to B-
The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies, and risk diversification.
Publication date: 2005-05-24
Profitability continued to surge for the nation's HMOs(1), which earned $8.9 billion during the first three quarters of 2004, representing a $2.3 billion, or 33.6 percent(2), increase over the $6.7 billion earned during the same period in 2003, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.
In analyzing HMO earnings, Weiss found that, after excluding Kaiser, more than half of the industry's profits were concentrated among the five companies reporting the best performance during the period. HMOs reporting the largest year-over-year increases in earnings(2) were:
Net Profit (Loss)
-------------------------
Weiss Total 3rd Qtr 3rd Qtr
Safety Assets 2004 2003 $
Company Headquarters Rating ($Bil) ($Mil) ($Mil) Change
----------------------------------------------------------------------
Highmark, Camp Hill,
Inc. Pa. B- 4.2 170.5 (21.4) 192.0
Capital
Advantage Harrisburg,
Ins Co. Pa. C- 0.5 6.5 (101.0) 107.4
Humana
Medical Plan Miramar,
Inc. Fla. B- 0.6 126.7 48.3 78.4
BlueCross
BlueShield Chattanooga,
of Tenn. Tenn. B+ 12.5 127.0 62.2 64.8
Blue Cross of Thousand
Calif. Oaks,
Calif. A 4.9 419.7 357.6 62.2
----------------------------------------------------------------------
Weiss Safety Rating: A=Excellent, B=Good, C=Fair, D=Weak, E=Very Weak,
F = Failed, U=Unrated
"Despite substantially improved performance by many insurers over the past few years, industry earnings are concentrated among relatively few companies, therefore consumers should continue to monitor the financial strength of any HMO they are considering doing business with," said Melissa Gannon, vice president of Weiss Ratings, Inc.
Notable Rating Changes
Of the 482 HMOs reviewed by Weiss using third quarter 2004 data, 65 companies were upgraded, while only 3 were downgraded. Notable upgrades include:
-- Asuris Northwest Health (Walla Walla, Wis.) from C+ to B-
-- AvMed, Inc. (Gainesville, Fla.) from C+ to B-
-- Carelink Health Plans, Inc. (Charleston, W. Vir.)from C+ to B-
-- Coventry Health Care of Louisiana (Metairie, La.)from C+ to B-
The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies, and risk diversification.
Okla. Senate Approves Legislation to Require Discount Medical Plans to Register With State
Source: Journal Record - Oklahoma City
Publication date: 2005-05-25
Arrival time: 2005-05-26
The state Senate approved legislation Tuesday to require discount medical plan organizations to obtain licensing from the Oklahoma Insurance Department.
Senate Bill 729, authored by state Sen. Todd Lamb, R-Edmond, targets misleading health plan service claims. If made law, these organizations would not be allowed to use the word insurance in their advertisements or marketing materials, along with the terms health plan, preferred provider organization or other such suggestions that the plan actually was health insurance.
We want to make (this bill) as consumer-friendly as possible, said Lamb. This is only for the entities targeting those who do not know the difference between a discount medical plan and insurance.
The bill was approved by a vote of 40-6 and now moves to the House.
Publication date: 2005-05-25
Arrival time: 2005-05-26
The state Senate approved legislation Tuesday to require discount medical plan organizations to obtain licensing from the Oklahoma Insurance Department.
Senate Bill 729, authored by state Sen. Todd Lamb, R-Edmond, targets misleading health plan service claims. If made law, these organizations would not be allowed to use the word insurance in their advertisements or marketing materials, along with the terms health plan, preferred provider organization or other such suggestions that the plan actually was health insurance.
We want to make (this bill) as consumer-friendly as possible, said Lamb. This is only for the entities targeting those who do not know the difference between a discount medical plan and insurance.
The bill was approved by a vote of 40-6 and now moves to the House.
Annual Health Care Cost for American Family of Four....
Source: PRNewswire
PRESS RELEASE
Publication date: 2005-05-25
SEATTLE, May 25 /PRNewswire/ -- Milliman, Inc., one of the premier global consulting and actuarial firms, announced today that average medical spending for the "typical American family of four" reached $12,214 in 2005. The finding is contained in the first annual Milliman Medical Index (MMI). The MMI measures average yearly healthcare costs when the family of four is covered by an employer-sponsored Preferred Provider Organization (PPO). The new Milliman study determined that the average annual medical cost for a family of four increased by 9.1% from 2004 to 2005. The average annual rate of increase for the four year period 2001-2005 was 9.8%.
"The Milliman Medical Index provides a benchmark by annually assessing the changes in those costs over the past 5 years," said study co-author William Thompson, a Milliman principal and consulting actuary. "Unlike most surveys that focus exclusively on 'employer' cost increases, the MMI analyzes what it really costs the U.S. economy to deliver health care, and how this burden is allocated between employers and employees," Thompson added.
"The MMI examines the key drivers and the components of actual medical spending, including physician charges, prescription drugs and hospital charges," said Robert Cosway, Milliman principal and consulting actuary. "We break out and measure the rate of consumer spending versus the rate of total spending for health care in a given year. Based on a typical PPO plan design, Milliman estimates that the typical American family of four would pay $2,035 out of their own pocket through member cost sharing in 2005," study co-author Cosway added.
Medical costs for a family are determined by the number, type and cost of healthcare services that they utilize and the amounts that the employee's health plan pays medical providers for these services. Utilization of medical services for a particular family varies significantly based on the family's ages, geographic area, health status and other factors. The MMI is based on Milliman's analysis of historical claim data and understanding of trends in provider contracting. The complete Milliman Medical Index is available at http://www.milliman.com/ , or by calling Jim Loughman, Director of Media Relations and Public Affairs, at 203-698-0008.
PRESS RELEASE
Publication date: 2005-05-25
SEATTLE, May 25 /PRNewswire/ -- Milliman, Inc., one of the premier global consulting and actuarial firms, announced today that average medical spending for the "typical American family of four" reached $12,214 in 2005. The finding is contained in the first annual Milliman Medical Index (MMI). The MMI measures average yearly healthcare costs when the family of four is covered by an employer-sponsored Preferred Provider Organization (PPO). The new Milliman study determined that the average annual medical cost for a family of four increased by 9.1% from 2004 to 2005. The average annual rate of increase for the four year period 2001-2005 was 9.8%.
"The Milliman Medical Index provides a benchmark by annually assessing the changes in those costs over the past 5 years," said study co-author William Thompson, a Milliman principal and consulting actuary. "Unlike most surveys that focus exclusively on 'employer' cost increases, the MMI analyzes what it really costs the U.S. economy to deliver health care, and how this burden is allocated between employers and employees," Thompson added.
"The MMI examines the key drivers and the components of actual medical spending, including physician charges, prescription drugs and hospital charges," said Robert Cosway, Milliman principal and consulting actuary. "We break out and measure the rate of consumer spending versus the rate of total spending for health care in a given year. Based on a typical PPO plan design, Milliman estimates that the typical American family of four would pay $2,035 out of their own pocket through member cost sharing in 2005," study co-author Cosway added.
Medical costs for a family are determined by the number, type and cost of healthcare services that they utilize and the amounts that the employee's health plan pays medical providers for these services. Utilization of medical services for a particular family varies significantly based on the family's ages, geographic area, health status and other factors. The MMI is based on Milliman's analysis of historical claim data and understanding of trends in provider contracting. The complete Milliman Medical Index is available at http://www.milliman.com/ , or by calling Jim Loughman, Director of Media Relations and Public Affairs, at 203-698-0008.
Wednesday, May 25, 2005
Auto Insurance Web Sites the Primary Consumer Source for Quotes - Keynote
SAN MATEO, Calif.--(BUSINESS WIRE)--May 24, 2005--Keynote Systems (Nasdaq:KEYN)
-- Ability to Do Research and Get Quotes Primary Driver for Online Purchase
-- First Comprehensive Competitive Benchmark Study of Auto Insurance Websites
-- Progressive, Allstate on Top of Customer Experience Rankings
-- GEICO And State Farm Dominate in All Ten Key Service Level Performance Factors
New competitive intelligence from Keynote Systems (Nasdaq:KEYN), The Internet Performance Authority(R), reports that the Web is the primary resource for auto insurance consumers with 87 percent visiting sites with the intention of obtaining a quote and 58 percent willing to purchase auto insurance online. The results of two companion studies in the Keynote report (the Keynote Customer Experience Rankings for Auto Insurance Web Sites and the Keynote Service Level Rankings for Auto Insurance Web Sites) indicate that auto insurance Web sites that provide comparative quote information and in-depth research have a significant advantage over competitors.
The Keynote studies evaluated the Web sites of the following auto insurance companies: AIG, Allstate, American Express, Esurance, GEICO, GMAC, Liberty Mutual, Met Life, Nationwide, Progressive and State Farm.
"The Web has caused dramatic shifts in the way consumers research and buy auto insurance," said Dr. Bonny Brown, director of research and public services for Keynote. "Our market intelligence shows that consumers are very likely to comparison shop and to purchase online. In order to stay competitive, auto Insurance companies need to make sure their sites positively impact their brand reputation and make it easy for prospective customers to research and purchase products on their web sites."
In a major finding, Keynote reported that more consumers obtain auto insurance quotes online (68%) than over the phone (55%). To better facilitate the quote process, consumers turn to the Web for convenience and background information on policy coverage. Progressive, Allstate and State Farm led the overall customer experience rankings with superior online quote and research processes. Consumers were particularly fond of Progressive's detailed quote comparison chart, giving the auto insurer high marks for providing competitive quotes on its own site. In addition, consumers responded favorably to Progressive's online guidance for decision making, easy to complete forms, customizable coverage options, and frequently asked questions links. Customer frustration was experienced on industry sites that weren't able to deliver quotes, detailed information on premiums and deductibles, or guide consumers through their transactions.
"Excellent customer experience also depends on the health of the Web site application itself. Unless critical quote and online purchase pages load quickly and reliably for consumers in various geographies and on different connection speeds, end-users will be unable to unleash the full potential of the convenient online functionality and valuable content," said Chris Loosley, general manager, service level business for Keynote. "That is precisely why the Keynote Service Level Rankings measure which companies' sites provide excellent technical performance, including high reliability, error free processes between tasks and fast page downloads, to support an overall quality user experience. Satisfied consumers are not likely to abandon the quote or purchase process, so Web site performance is critical to overall site success."
GEICO, State Farm and Liberty Mutual were the leading sites in overall service level rankings and maintain high site quality, with GEICO and State Farm dominating in most of the ten key performance factors measured. GEICO led in response time consistency and had the least amount of outage hours. Overall, auto insurance Web sites have excellent dial-up performance, making them accessible to a wide range of online users. Additionally, half of the industry-leading sites exhibited strong reliability with better than 99.4% uptime, indicating that leading industry sites proactively monitor and focus on site quality and health.
The Keynote Service Level Rankings examined service levels at leading auto insurance sites, testing speed and reliability by running 5000 simulated transactions on each site. To benchmark leading auto insurance sites in customer experience, the Keynote Customer Experience Rankings examined 2,000 consumers as they interacted with 10 leading sites, capturing more than 250 behavioral and attitudinal data points for each consumer.
The studies, the Keynote Customer Experience Rankings for Auto Insurance Web Sites and the Keynote Service Level Rankings for Auto Insurance Web Sites, which may be purchased together or separately, provide in-depth competitive analysis of the Web auto insurance industry and contain hundreds of additional data points and a detailed analysis of study findings. For more information about the full reports or to purchase the reports, visit:
-- Keynote Customer Experience Rankings for Auto Insurance Web Sites http://www.keynote.com/solutions/cem_ce_auto_insurance.html.
-- Keynote Service Level Rankings for Auto Insurance Web Sites: http://www.keynote.com/solutions/slm_ce_auto_insurance.html.
Keynote Systems provides a full range of measurement and monitoring, service level and customer experience management services. Keynote's competitive intelligence studies provide insights into Web auto insurance industry trends and service level and customer experience competitive benchmarks of leading auto insurance Web sites.
-- Ability to Do Research and Get Quotes Primary Driver for Online Purchase
-- First Comprehensive Competitive Benchmark Study of Auto Insurance Websites
-- Progressive, Allstate on Top of Customer Experience Rankings
-- GEICO And State Farm Dominate in All Ten Key Service Level Performance Factors
New competitive intelligence from Keynote Systems (Nasdaq:KEYN), The Internet Performance Authority(R), reports that the Web is the primary resource for auto insurance consumers with 87 percent visiting sites with the intention of obtaining a quote and 58 percent willing to purchase auto insurance online. The results of two companion studies in the Keynote report (the Keynote Customer Experience Rankings for Auto Insurance Web Sites and the Keynote Service Level Rankings for Auto Insurance Web Sites) indicate that auto insurance Web sites that provide comparative quote information and in-depth research have a significant advantage over competitors.
The Keynote studies evaluated the Web sites of the following auto insurance companies: AIG, Allstate, American Express, Esurance, GEICO, GMAC, Liberty Mutual, Met Life, Nationwide, Progressive and State Farm.
"The Web has caused dramatic shifts in the way consumers research and buy auto insurance," said Dr. Bonny Brown, director of research and public services for Keynote. "Our market intelligence shows that consumers are very likely to comparison shop and to purchase online. In order to stay competitive, auto Insurance companies need to make sure their sites positively impact their brand reputation and make it easy for prospective customers to research and purchase products on their web sites."
In a major finding, Keynote reported that more consumers obtain auto insurance quotes online (68%) than over the phone (55%). To better facilitate the quote process, consumers turn to the Web for convenience and background information on policy coverage. Progressive, Allstate and State Farm led the overall customer experience rankings with superior online quote and research processes. Consumers were particularly fond of Progressive's detailed quote comparison chart, giving the auto insurer high marks for providing competitive quotes on its own site. In addition, consumers responded favorably to Progressive's online guidance for decision making, easy to complete forms, customizable coverage options, and frequently asked questions links. Customer frustration was experienced on industry sites that weren't able to deliver quotes, detailed information on premiums and deductibles, or guide consumers through their transactions.
"Excellent customer experience also depends on the health of the Web site application itself. Unless critical quote and online purchase pages load quickly and reliably for consumers in various geographies and on different connection speeds, end-users will be unable to unleash the full potential of the convenient online functionality and valuable content," said Chris Loosley, general manager, service level business for Keynote. "That is precisely why the Keynote Service Level Rankings measure which companies' sites provide excellent technical performance, including high reliability, error free processes between tasks and fast page downloads, to support an overall quality user experience. Satisfied consumers are not likely to abandon the quote or purchase process, so Web site performance is critical to overall site success."
GEICO, State Farm and Liberty Mutual were the leading sites in overall service level rankings and maintain high site quality, with GEICO and State Farm dominating in most of the ten key performance factors measured. GEICO led in response time consistency and had the least amount of outage hours. Overall, auto insurance Web sites have excellent dial-up performance, making them accessible to a wide range of online users. Additionally, half of the industry-leading sites exhibited strong reliability with better than 99.4% uptime, indicating that leading industry sites proactively monitor and focus on site quality and health.
The Keynote Service Level Rankings examined service levels at leading auto insurance sites, testing speed and reliability by running 5000 simulated transactions on each site. To benchmark leading auto insurance sites in customer experience, the Keynote Customer Experience Rankings examined 2,000 consumers as they interacted with 10 leading sites, capturing more than 250 behavioral and attitudinal data points for each consumer.
The studies, the Keynote Customer Experience Rankings for Auto Insurance Web Sites and the Keynote Service Level Rankings for Auto Insurance Web Sites, which may be purchased together or separately, provide in-depth competitive analysis of the Web auto insurance industry and contain hundreds of additional data points and a detailed analysis of study findings. For more information about the full reports or to purchase the reports, visit:
-- Keynote Customer Experience Rankings for Auto Insurance Web Sites http://www.keynote.com/solutions/cem_ce_auto_insurance.html.
-- Keynote Service Level Rankings for Auto Insurance Web Sites: http://www.keynote.com/solutions/slm_ce_auto_insurance.html.
Keynote Systems provides a full range of measurement and monitoring, service level and customer experience management services. Keynote's competitive intelligence studies provide insights into Web auto insurance industry trends and service level and customer experience competitive benchmarks of leading auto insurance Web sites.
Health Insurance Survey from Canada
LAVAL, QUE - A majority of Canadian employees surveyed believe people who engage in unhealthy habits should pay more for their healthcare coverage.
In an Ipsos-Reid poll of 1,500 employees with supplementary health programs, 54 per cent said the cost of employee health benefit plans should be higher for employees who smoke, don't exercise or are seriously overweight. The survey was commissioned by Sanofi-Aventis, the world's third-largest pharmaceutical company.
Around 70 per cent of the respondents said that employees who do not smoke should pay less for coverage.
About 63 per cent agreed the government should promote healthy living by providing tax credits or deductions for personal gym memberships or recreational fees.
Almost 70 per cent said they'd be willing to pay a small fee – such as $5 – for some publicly funded services, if the money were invested in services such as home or community care, palliative care or costly drugs.
The survey suggests services people would be willing to pay for include a visit to the emergency room, to the doctor's office, or for a day in the hospital.
In an Ipsos-Reid poll of 1,500 employees with supplementary health programs, 54 per cent said the cost of employee health benefit plans should be higher for employees who smoke, don't exercise or are seriously overweight. The survey was commissioned by Sanofi-Aventis, the world's third-largest pharmaceutical company.
Around 70 per cent of the respondents said that employees who do not smoke should pay less for coverage.
About 63 per cent agreed the government should promote healthy living by providing tax credits or deductions for personal gym memberships or recreational fees.
Almost 70 per cent said they'd be willing to pay a small fee – such as $5 – for some publicly funded services, if the money were invested in services such as home or community care, palliative care or costly drugs.
The survey suggests services people would be willing to pay for include a visit to the emergency room, to the doctor's office, or for a day in the hospital.
Tuesday, May 24, 2005
Blue Cross to pay families $3,000 each for infant helmets
Blue Cross Blue Shield of Illinois has agreed to pay $3,000 each to about 50 families who were forced to pay for infant cranial helmets that are used to correct misshapen skulls.
The settlement agreement, announced Monday by the Cook County State's Attorney's office, includes past claims and future coverage for the devices.
The state's attorney's office originally filed suit in 2001 after receiving some inquiries from families who had been denied coverage. Assistant State's Attorney Tom Rieck said the goal is for affected families to receive payments by Nov. 1.
Demand for the cranial helmets grew after a national program encouraged parents to place infants on their backs to sleep in order to reduce Sudden Infant Death Syndrome fatalities. But putting infants on their backs sometimes caused misshapen heads, and parents and health care professionals were concerned that the condition could lead to future health problems.
Effective July 1, Blue Cross will cover FDA-approved devices for its clients and offer employers the option of covering them for their employees, said Robert Kieckhefer, vice president of public affairs for Blue Cross Blue Shield of Illinois.
Because only about 50 families incurred out-of-pocket expenses, Kieckhefer said "the impact will be more on going forward."
"We settled it with no admission of liability or wrongdoing, so it's a good thing," he said.
The state's attorney's office and Blue Cross, which provides health coverage for more than 6.2 million people in Illinois, will be contacting families whose previous claims were refused, and they will have until Sept. 1 to respond.
The settlement agreement, announced Monday by the Cook County State's Attorney's office, includes past claims and future coverage for the devices.
The state's attorney's office originally filed suit in 2001 after receiving some inquiries from families who had been denied coverage. Assistant State's Attorney Tom Rieck said the goal is for affected families to receive payments by Nov. 1.
Demand for the cranial helmets grew after a national program encouraged parents to place infants on their backs to sleep in order to reduce Sudden Infant Death Syndrome fatalities. But putting infants on their backs sometimes caused misshapen heads, and parents and health care professionals were concerned that the condition could lead to future health problems.
Effective July 1, Blue Cross will cover FDA-approved devices for its clients and offer employers the option of covering them for their employees, said Robert Kieckhefer, vice president of public affairs for Blue Cross Blue Shield of Illinois.
Because only about 50 families incurred out-of-pocket expenses, Kieckhefer said "the impact will be more on going forward."
"We settled it with no admission of liability or wrongdoing, so it's a good thing," he said.
The state's attorney's office and Blue Cross, which provides health coverage for more than 6.2 million people in Illinois, will be contacting families whose previous claims were refused, and they will have until Sept. 1 to respond.
Savings on auto insurance
By DAVID SCHEPP
dschepp@thejournalnews.com
THE JOURNAL NEWS
(Original publication: May 24, 2005)
With the cost of everything from gasoline to real-estate taxes to new appliances on the rise, many New Yorkers are cheering recent announcements by the state's auto insurers that they're cutting rates by as much as 6 percent.
Revisions to the Empire State's insurance code, crackdowns on fraud by the state insurance department and changing economic factors affecting insurance companies have put consumers in a better position to angle for the best price on auto insurance.
That savings could be squandered, however, if consumers fail to make prudent choices when comparing rates and selecting the right insurance carrier.
One area where drivers of older cars can get a substantial break in their annual insurance bill is by dropping comprehensive and collision coverage.
"Depending on the type of car you have, whether you should get collision and comprehensive (needs consideration) being that they're optional," says Mike Barry, spokesman for the New York State Department of Insurance.
It's just not a wise use of money to pay $800 a year to protect against a loss on a vehicle that may be worth only $1,000, says Jonathan A. Theodore, president of Theodore Consulting Group Inc., an insurance and financial-services consultancy in Suffern.
Add to that the deductible that's required when making a claim — $250, $500 or more — and "you're operating at a loss," he says.
With advent of the Internet, consumers have a number of ways they can compare rates to save money. Visitors to www.progressive.com, for example, can get quotes from Progressive and several other insurers at the same time.
Another way to compare is to call an agent who sells a number of different lines, such as Theodore's company. Whether contacted by phone, over the Internet or via e-mail, such multi-lines agencies can shop prices for you.
Defensive-driving courses are another way for New Yorkers to save money on auto insurance. The course pays for itself within a year or less by offering drivers up to 10 percent off the liability, personal injury and physical damage portions of their insurance bill.
Depending on the car, there are other discounts available, such as passive-restraint systems, anti-lock brakes and alarm systems.
Consumers may also want to weigh the cost of having an alarm system installed after-market as a way to reduce insurance costs. That's because insurers no longer offer the big discounts they once did for such systems. Today, car alarms are far more nuisance than deterrent, Theodore says.
That money might be better spent on side airbags or anti-lock brakes if such safety items aren't standard equipment.
One hassle in switching insurance companies is that the vehicle must be inspected, unless it's brand new. That requires drivers to go to an approved agent to photograph the car and note any damage. Failure to get an inspection results in the suspension of comprehensive and collision coverage after 10 days.
"It's five minutes out of your day, but it's important to do," Theodore said.
Receipts for after-market safety equipment or alarms should be photocopied and submitted with the application for insurance to insure the driver gets any discounts that the insurer might offer, since such items might not show up on the photo inspection.
You can also save money by raising your deductible, the portion of the repair bill that you pay. Be aware, however, that if your car is financed, the loan company may require you to have no higher than a $500 deductible.
Lastly, "Always pay the bill on time," Theodore says.
dschepp@thejournalnews.com
THE JOURNAL NEWS
(Original publication: May 24, 2005)
With the cost of everything from gasoline to real-estate taxes to new appliances on the rise, many New Yorkers are cheering recent announcements by the state's auto insurers that they're cutting rates by as much as 6 percent.
Revisions to the Empire State's insurance code, crackdowns on fraud by the state insurance department and changing economic factors affecting insurance companies have put consumers in a better position to angle for the best price on auto insurance.
That savings could be squandered, however, if consumers fail to make prudent choices when comparing rates and selecting the right insurance carrier.
One area where drivers of older cars can get a substantial break in their annual insurance bill is by dropping comprehensive and collision coverage.
"Depending on the type of car you have, whether you should get collision and comprehensive (needs consideration) being that they're optional," says Mike Barry, spokesman for the New York State Department of Insurance.
It's just not a wise use of money to pay $800 a year to protect against a loss on a vehicle that may be worth only $1,000, says Jonathan A. Theodore, president of Theodore Consulting Group Inc., an insurance and financial-services consultancy in Suffern.
Add to that the deductible that's required when making a claim — $250, $500 or more — and "you're operating at a loss," he says.
With advent of the Internet, consumers have a number of ways they can compare rates to save money. Visitors to www.progressive.com, for example, can get quotes from Progressive and several other insurers at the same time.
Another way to compare is to call an agent who sells a number of different lines, such as Theodore's company. Whether contacted by phone, over the Internet or via e-mail, such multi-lines agencies can shop prices for you.
Defensive-driving courses are another way for New Yorkers to save money on auto insurance. The course pays for itself within a year or less by offering drivers up to 10 percent off the liability, personal injury and physical damage portions of their insurance bill.
Depending on the car, there are other discounts available, such as passive-restraint systems, anti-lock brakes and alarm systems.
Consumers may also want to weigh the cost of having an alarm system installed after-market as a way to reduce insurance costs. That's because insurers no longer offer the big discounts they once did for such systems. Today, car alarms are far more nuisance than deterrent, Theodore says.
That money might be better spent on side airbags or anti-lock brakes if such safety items aren't standard equipment.
One hassle in switching insurance companies is that the vehicle must be inspected, unless it's brand new. That requires drivers to go to an approved agent to photograph the car and note any damage. Failure to get an inspection results in the suspension of comprehensive and collision coverage after 10 days.
"It's five minutes out of your day, but it's important to do," Theodore said.
Receipts for after-market safety equipment or alarms should be photocopied and submitted with the application for insurance to insure the driver gets any discounts that the insurer might offer, since such items might not show up on the photo inspection.
You can also save money by raising your deductible, the portion of the repair bill that you pay. Be aware, however, that if your car is financed, the loan company may require you to have no higher than a $500 deductible.
Lastly, "Always pay the bill on time," Theodore says.
National Health Insurance Market
Bill aims to create national health insurance market
Kent Hoover
Washington Bureau Chief
House Speaker Dennis Hastert endorsed legislation to allow individuals to buy an individual health insurance plan from any state, regardless of where they live.
The legislation would lower the cost of health insurance by allowing individuals to get around their state's coverage mandates and pick a less-comprehensive plan, says Rep. John Shadegg, R-Ariz., the bill's sponsor.
These mandates add thousands of dollars to the cost of health insurance in some states, bill supporters say.
"Where you live should not determine whether or not you can afford a health insurance policy," says Angela Hunter, federal affairs director for the Council for Affordable Health Insurance.
Shadegg says his bill would "create a national market for health insurance." This additional competition would keep a lid on premiums, he says.
Under the legislation, any insurer that meets the regulatory requirements of its home state could sell in any state.
Senate sponsor Jim DeMint, R-S.C., says the bill is a "great start" toward the day when every individual will have their own "personal, portable and permanent" health insurance. Most people now are covered by employer-based plans.
Hastert, whose support boosts the bill's chances, calls the legislation "one of the more innovative ideas" for the health insurance market.
Online auctioneer eBay agrees. The legislation would allow consumers to go online and find more choices for health insurance just like eBay gives consumers more choices for a whole host of products, company officials say.
The legislation also would help the 400,000 Americans who make a living selling on eBay, says Brian Bieron, the company's senior director of federal government affairs. These individuals now have a tough time finding affordable insurance.
"That is a problem that has to be solved," Bieron says.
Two small business organizations, the National Federation of Independent Business and the Small Business & Entrepreneurship Council, also have endorsed the legislation. So has Golden Rule Insurance Co., which specializes in the individual market.
The test of Shadegg's Health Care Choice Act (H.R. 2355) is available at thomas.loc.gov
Kent Hoover
Washington Bureau Chief
House Speaker Dennis Hastert endorsed legislation to allow individuals to buy an individual health insurance plan from any state, regardless of where they live.
The legislation would lower the cost of health insurance by allowing individuals to get around their state's coverage mandates and pick a less-comprehensive plan, says Rep. John Shadegg, R-Ariz., the bill's sponsor.
These mandates add thousands of dollars to the cost of health insurance in some states, bill supporters say.
"Where you live should not determine whether or not you can afford a health insurance policy," says Angela Hunter, federal affairs director for the Council for Affordable Health Insurance.
Shadegg says his bill would "create a national market for health insurance." This additional competition would keep a lid on premiums, he says.
Under the legislation, any insurer that meets the regulatory requirements of its home state could sell in any state.
Senate sponsor Jim DeMint, R-S.C., says the bill is a "great start" toward the day when every individual will have their own "personal, portable and permanent" health insurance. Most people now are covered by employer-based plans.
Hastert, whose support boosts the bill's chances, calls the legislation "one of the more innovative ideas" for the health insurance market.
Online auctioneer eBay agrees. The legislation would allow consumers to go online and find more choices for health insurance just like eBay gives consumers more choices for a whole host of products, company officials say.
The legislation also would help the 400,000 Americans who make a living selling on eBay, says Brian Bieron, the company's senior director of federal government affairs. These individuals now have a tough time finding affordable insurance.
"That is a problem that has to be solved," Bieron says.
Two small business organizations, the National Federation of Independent Business and the Small Business & Entrepreneurship Council, also have endorsed the legislation. So has Golden Rule Insurance Co., which specializes in the individual market.
The test of Shadegg's Health Care Choice Act (H.R. 2355) is available at thomas.loc.gov
For those without health plan
WASHINGTON - America's 45 million uninsured have a new tool for finding health coverage.
The National Association of Health Underwriters has rolled out a new Internet site that provides state-by-state information on coverage options for many situations, including job changers, high-risk people unable to obtain traditional insurance and the poor.
"We get consumer inquiries every day," said Janet Trautwein, vice president of government affairs for the Arlington, Va.-based association that created the new Internet site.
The new site (www.-nahu.org/consumer/healthcare) is helpful to a computer-savvy consumer who understands insurance terms.
That's especially the case if it is used in conjunction with other Internet sites, such as www.ehealthinsurance.com, that provide price quotes on individual policies and the consumer health insurance information provided by the Georgetown University Health Policy Institute, www.healthinsuranceinfo.net.
Every three years, an average of 1 in 4 adults loses employer-based health coverage - at least temporarily - due to a job change, an employer's bankruptcy or another life event such as early retirement or a divorce, according to Georgetown's institute.
Unfortunately, the typical uninsured person often does not have home access to a computer or the sophistication to understand the differences among programs, according to health-care professionals who specialize in the uninsured.
Even so, several community health professionals and think tank experts agreed the new Internet site does have some value.
The Georgetown site does a better job explaining medical terminology to consumers than the new offering from the insurance underwriters, according to Linda Blumberg of the Urban Institute, a Washington think tank. "It gives the best information available on insurance regulations," Blumberg said. "The truth is, there are limited options to a lot of people in terms of affordability and what their specific health situation is."
The new Web site also provides a state-by-state list of health programs for the poor, such as Medicaid and the federally subsidized State Children's Health Insurance Program.
"It's a first step, but information alone isn't going to do it," said Joseph Antos, a scholar in health care at the American Enterprise Institute, a Washington think tank. "Most people who are uninsured are uninsured because they don't have the means."
ON THE WEB
National Association of Health Underwriters:
www.nahu.org/consumer/healthcare
eHealthInsurance’s home page:
www.ehealthinsurance.com
Georgetown University Health Policy
Institute Health Insurance Consumer Guides:
www.healthinsuranceinfo.net
The National Association of Health Underwriters has rolled out a new Internet site that provides state-by-state information on coverage options for many situations, including job changers, high-risk people unable to obtain traditional insurance and the poor.
"We get consumer inquiries every day," said Janet Trautwein, vice president of government affairs for the Arlington, Va.-based association that created the new Internet site.
The new site (www.-nahu.org/consumer/healthcare) is helpful to a computer-savvy consumer who understands insurance terms.
That's especially the case if it is used in conjunction with other Internet sites, such as www.ehealthinsurance.com, that provide price quotes on individual policies and the consumer health insurance information provided by the Georgetown University Health Policy Institute, www.healthinsuranceinfo.net.
Every three years, an average of 1 in 4 adults loses employer-based health coverage - at least temporarily - due to a job change, an employer's bankruptcy or another life event such as early retirement or a divorce, according to Georgetown's institute.
Unfortunately, the typical uninsured person often does not have home access to a computer or the sophistication to understand the differences among programs, according to health-care professionals who specialize in the uninsured.
Even so, several community health professionals and think tank experts agreed the new Internet site does have some value.
The Georgetown site does a better job explaining medical terminology to consumers than the new offering from the insurance underwriters, according to Linda Blumberg of the Urban Institute, a Washington think tank. "It gives the best information available on insurance regulations," Blumberg said. "The truth is, there are limited options to a lot of people in terms of affordability and what their specific health situation is."
The new Web site also provides a state-by-state list of health programs for the poor, such as Medicaid and the federally subsidized State Children's Health Insurance Program.
"It's a first step, but information alone isn't going to do it," said Joseph Antos, a scholar in health care at the American Enterprise Institute, a Washington think tank. "Most people who are uninsured are uninsured because they don't have the means."
ON THE WEB
National Association of Health Underwriters:
www.nahu.org/consumer/healthcare
eHealthInsurance’s home page:
www.ehealthinsurance.com
Georgetown University Health Policy
Institute Health Insurance Consumer Guides:
www.healthinsuranceinfo.net
Saturday, May 21, 2005
Healthier People, Insurance Competition Can Reduce Rates
May 20, 2005
Arkansas has a healthy market for auto and homeowners policies, but not for health insurance, the state's new insurance commissioner Julie Benafield Bowman said.
According to the Associated Press, Bowman said she plans to follow Gov. Mike Huckabee's lead by focusing on health and fitness to control rising insurance rates, but she added that the state's health insurance market needs a checkup of its own.
"We need to provide consumers with more choices,'' Bowman said.
Bowman made her comments in front of a table of fruit and water and after promoting more exercise for employees of the Arkansas Insurance Department. She said the department regulates insurance carriers to protect consumers, but consumers share the responsibility for keeping rates down by improving their own health.
"Being more healthy spreads the risk (for insurance companies) out,'' she said. "Right now, the crisis for the insurance industry is in the health care system, and each of us is responsible for doing our part.''
Bowman took over as commissioner in January and said Huckabee's staggering weight loss and nationally recognized Healthy Arkansas program inspired her to educate Arkansans about how healthy living can reduce insurance rates.
Two of the state's major health insurance providers, QualChoice of Arkansas and Blue Cross and Blue Shield, supported Bowman's fitness initiative. Rob Thorpe, major accounts manager for QualChoice, said more competition could help lower rates, but maybe only initially.
"We've had more carriers in the state in the past, but then they pulled out,'' Thorpe said. "More choice is good, but the real focus is on getting people healthier.''
Thorpe said people have been spoiled by low insurance co-pays in the past and the image that a trip to the doctor only costs $15 or $20. Meanwhile, 40 percent of Arkansans say they don't exercise and 90 percent say they don't do any strenuous exercise, and somehow, they expect insurance rates not to increase, he said.
Bowman and Thorpe both acknowledged that some health insurance issues cannot be controlled through better fitness. Coverage for serious mental health treatment continues to lag behind physical health insurance. Bowman said Arkansas has a parity law, but the industry still needs to improve what it offers for mental health care.
"The industry is starting to see that and embrace that, and I think the entire concept of mental illness is more understandable now,'' Bowman said.
Arkansas has a healthy market for auto and homeowners policies, but not for health insurance, the state's new insurance commissioner Julie Benafield Bowman said.
According to the Associated Press, Bowman said she plans to follow Gov. Mike Huckabee's lead by focusing on health and fitness to control rising insurance rates, but she added that the state's health insurance market needs a checkup of its own.
"We need to provide consumers with more choices,'' Bowman said.
Bowman made her comments in front of a table of fruit and water and after promoting more exercise for employees of the Arkansas Insurance Department. She said the department regulates insurance carriers to protect consumers, but consumers share the responsibility for keeping rates down by improving their own health.
"Being more healthy spreads the risk (for insurance companies) out,'' she said. "Right now, the crisis for the insurance industry is in the health care system, and each of us is responsible for doing our part.''
Bowman took over as commissioner in January and said Huckabee's staggering weight loss and nationally recognized Healthy Arkansas program inspired her to educate Arkansans about how healthy living can reduce insurance rates.
Two of the state's major health insurance providers, QualChoice of Arkansas and Blue Cross and Blue Shield, supported Bowman's fitness initiative. Rob Thorpe, major accounts manager for QualChoice, said more competition could help lower rates, but maybe only initially.
"We've had more carriers in the state in the past, but then they pulled out,'' Thorpe said. "More choice is good, but the real focus is on getting people healthier.''
Thorpe said people have been spoiled by low insurance co-pays in the past and the image that a trip to the doctor only costs $15 or $20. Meanwhile, 40 percent of Arkansans say they don't exercise and 90 percent say they don't do any strenuous exercise, and somehow, they expect insurance rates not to increase, he said.
Bowman and Thorpe both acknowledged that some health insurance issues cannot be controlled through better fitness. Coverage for serious mental health treatment continues to lag behind physical health insurance. Bowman said Arkansas has a parity law, but the industry still needs to improve what it offers for mental health care.
"The industry is starting to see that and embrace that, and I think the entire concept of mental illness is more understandable now,'' Bowman said.
Some Doctors Ditching Health Insurance
An increasing number of doctors and patients are fed up with health insurance and they're doing something about it. Dr. Kim Mulvihill reports on a growing trend sweeping the nation, that comes at a cost.
Dr. Yan Chin is a pediatrician with "San Francisco On Call", a group of board certified physicians who cater to a select group patients around the clock, twenty four hours a day. Some call this type of care boutique medicine or concierge care.
Imagine getting the VIP treatment, no more packed waiting rooms, no more waiting weeks or months to see your doctor. And your doctor has to fit into your busy schedule. Sounds good? Well, there's a catch. These doctors may do house calls, but they don't do insurance.
Dr. Jordan Shlain: “I went to medical school to be a doctor and to care for patients. I didn't take one class on billings, on insurance company shenanigans and the HMO grip.”
Dr. Jordan Shlain is medical director of “San Francisco On Call.”
Dr. Shlain: “We're really all about convenience for the patient.”
He is a member of a growing group of doctors - doctors fed up with the mounting paperwork, bloated patient load, and falling reimbursement rates.
Dr. Shlain: “The insurance companies were sending me checks at 20 percent of what I bill. It became just impossible to make a living.”
These physicians leave it up to their patients to get reimbursed from insurance companies. And that's not all. Some doctors are offering very exclusive care to an elite group of patients. There's a hefty initiation fee - up to thirty thousand dollars, and a yearly retainer.
Dr. Shlain says this may offend some Americans…
Dr. Shlain: “So a guy can buy a private jet, a Mercedes, a 20 million dollar house, but nope you have to get in line with everyone else in health care.
Not everyone believes this approach is good medicine.
Dr. Grumbach: “I have grave concerns that in the process of opting for a better lifestyle, a better income, that we are as a profession abandoning the need of the vast majority of Americans.”
By the way, the nation's largest health insurer just reported its profits doubled from a year ago. And a typical family physician's practice includes about 1500 patients.
Dr. Yan Chin is a pediatrician with "San Francisco On Call", a group of board certified physicians who cater to a select group patients around the clock, twenty four hours a day. Some call this type of care boutique medicine or concierge care.
Imagine getting the VIP treatment, no more packed waiting rooms, no more waiting weeks or months to see your doctor. And your doctor has to fit into your busy schedule. Sounds good? Well, there's a catch. These doctors may do house calls, but they don't do insurance.
Dr. Jordan Shlain: “I went to medical school to be a doctor and to care for patients. I didn't take one class on billings, on insurance company shenanigans and the HMO grip.”
Dr. Jordan Shlain is medical director of “San Francisco On Call.”
Dr. Shlain: “We're really all about convenience for the patient.”
He is a member of a growing group of doctors - doctors fed up with the mounting paperwork, bloated patient load, and falling reimbursement rates.
Dr. Shlain: “The insurance companies were sending me checks at 20 percent of what I bill. It became just impossible to make a living.”
These physicians leave it up to their patients to get reimbursed from insurance companies. And that's not all. Some doctors are offering very exclusive care to an elite group of patients. There's a hefty initiation fee - up to thirty thousand dollars, and a yearly retainer.
Dr. Shlain says this may offend some Americans…
Dr. Shlain: “So a guy can buy a private jet, a Mercedes, a 20 million dollar house, but nope you have to get in line with everyone else in health care.
Not everyone believes this approach is good medicine.
Dr. Grumbach: “I have grave concerns that in the process of opting for a better lifestyle, a better income, that we are as a profession abandoning the need of the vast majority of Americans.”
By the way, the nation's largest health insurer just reported its profits doubled from a year ago. And a typical family physician's practice includes about 1500 patients.
Health Insurance Pilot Program
absatract
PROVINCETOWN - It is still not definite, but the hope is out there that Provincetown this summer will launch a pilot program so employers will be able to offer health insurance to their seasonal workers for as little as $200.
The program has been proposed by Cape Cod Healthcare, Outer Cape Health Services and the Cape Cod Chamber of Commerce.
Henry Tuttle, executive director and chief operating officer of Outer Cape Health Services, explained the pilot program and the need for it to about 50 people who attended a health care forum in Provincetown Town Hall last week.
PROVINCETOWN - It is still not definite, but the hope is out there that Provincetown this summer will launch a pilot program so employers will be able to offer health insurance to their seasonal workers for as little as $200.
The program has been proposed by Cape Cod Healthcare, Outer Cape Health Services and the Cape Cod Chamber of Commerce.
Henry Tuttle, executive director and chief operating officer of Outer Cape Health Services, explained the pilot program and the need for it to about 50 people who attended a health care forum in Provincetown Town Hall last week.
Thursday, May 19, 2005
Aetna Chosen for Health Insurance
Thursday, May 19, 2005
By SUE HAGAN
ThisWeek Staff Writer
Columbus Public Schools will switch from United Health Care to Aetna, Inc. as its health insurance provider, effective Sept. 1.
The school board approved a three-year contract with Aetna at its Tuesday meeting by a vote of 5-0, with board President Stephanie Hightower abstaining. She did not give a reason and -- having adjourned into a closed door session -- was not available for comment after the board meeting.
However, after hearing the recommendation, she expressed concern over rising health costs and the fact that providers can't guarantee that costs won't exceed estimates.
"This has been an issue for us over the last couple of months," she said. "We are struggling to provide the best benefit for our employees" but need to keep costs down, she said. "I hope we did our due diligence."
Craig Bickley, CPS human resources executive director, said the district's insurance committee recommended Aetna based on the company's financial strength and its "fit" with the district's emphasis on wellness.
"It came down to Aetna and Anthem," he said, adding that Anthem offered deeper discounts against health costs, but an analysis showed lower claims costs under Aetna.
The analysis was done by Mercer Human Resource Consulting, hired by the board in January to find a new insurance provider and restructure the insurance plan.
Comparisons among the four final companies -- narrowed from 16 that submitted proposals -- show five-year health care costs ranging from $373-million under Aetna to more than $400-million with Medical Mutual of Ohio. Costs with the other two -- UHC and Anthem -- were estimated at $398-million and $478-million, respectively.
Bickley said those estimates were arrived at by applying one year of actual CPS claims and having them "processed" through each company's system.
"The final issue is this," Bickley said. "If you look at one year of data, Aetna and Anthem are fairly close together. The real difference comes when you take that forecast over time."
He said that Aetna provides early intervention through software that -- for example -- integrates pharmacy data, claims and lab results to hold costs down.
Aetna will charge the district an administration fee of $24.15 monthly for each employee on the health insurance plan, a cost that Bickley said would add up to about $2.2-million a year. UHC is charging the district more than $29 monthly per employee, he said.
Hiring Aetna is a step toward getting the district's health insurance fund on solid footing, Bickley said, but it doesn't solve the immediate problem of how to erase a $21.8-million deficit in the insurance fund.
He said Mercer hopes to bring recommendations to the board by June 30 -- the end of fiscal year 2005 -- on how to fund that deficit.
State law requires that the fund be solvent by the end of the fiscal year, but a ruling is still pending on whether the district has to plug the entire gap by then or if payment could be spread out over time.
In other business, the board unanimously approved $24.9-million in cuts from the 2005-2006 budget.
Superintendent Gene Harris recommended some of the cuts -- including the closure of Kent Elementary School -- in March, and the rest at the May 10 Business Committee meeting.
The cuts are necessary if the district is to cap annual spending increases at 3 percent, a promise made after voters approved an operating levy last November.
Based on last year's budget, that means an allowable increase of only $17.8-million for fiscal year 2006. Harris said expenses next year are projected to increase by more than $42.7-million, due largely to higher payments to charter schools, negotiated salary increases and insurance costs.
Besides closing Kent next fall, the cuts include eliminating 120 teaching positions because of declining enrollment, the decision to increase elementary school class sizes from 25 to 26 students and allocating fewer art teachers.
More savings will come from reducing the maintenance and telecommunications budgets, changing school schedules so bus routes can be consolidated and shelving a plan to integrate the district's various computer systems, among other things.
Harris said she intends to present the full fiscal year 2006 budget at an upcoming Business Committee meeting, and to the full board on June 7.
By SUE HAGAN
ThisWeek Staff Writer
Columbus Public Schools will switch from United Health Care to Aetna, Inc. as its health insurance provider, effective Sept. 1.
The school board approved a three-year contract with Aetna at its Tuesday meeting by a vote of 5-0, with board President Stephanie Hightower abstaining. She did not give a reason and -- having adjourned into a closed door session -- was not available for comment after the board meeting.
However, after hearing the recommendation, she expressed concern over rising health costs and the fact that providers can't guarantee that costs won't exceed estimates.
"This has been an issue for us over the last couple of months," she said. "We are struggling to provide the best benefit for our employees" but need to keep costs down, she said. "I hope we did our due diligence."
Craig Bickley, CPS human resources executive director, said the district's insurance committee recommended Aetna based on the company's financial strength and its "fit" with the district's emphasis on wellness.
"It came down to Aetna and Anthem," he said, adding that Anthem offered deeper discounts against health costs, but an analysis showed lower claims costs under Aetna.
The analysis was done by Mercer Human Resource Consulting, hired by the board in January to find a new insurance provider and restructure the insurance plan.
Comparisons among the four final companies -- narrowed from 16 that submitted proposals -- show five-year health care costs ranging from $373-million under Aetna to more than $400-million with Medical Mutual of Ohio. Costs with the other two -- UHC and Anthem -- were estimated at $398-million and $478-million, respectively.
Bickley said those estimates were arrived at by applying one year of actual CPS claims and having them "processed" through each company's system.
"The final issue is this," Bickley said. "If you look at one year of data, Aetna and Anthem are fairly close together. The real difference comes when you take that forecast over time."
He said that Aetna provides early intervention through software that -- for example -- integrates pharmacy data, claims and lab results to hold costs down.
Aetna will charge the district an administration fee of $24.15 monthly for each employee on the health insurance plan, a cost that Bickley said would add up to about $2.2-million a year. UHC is charging the district more than $29 monthly per employee, he said.
Hiring Aetna is a step toward getting the district's health insurance fund on solid footing, Bickley said, but it doesn't solve the immediate problem of how to erase a $21.8-million deficit in the insurance fund.
He said Mercer hopes to bring recommendations to the board by June 30 -- the end of fiscal year 2005 -- on how to fund that deficit.
State law requires that the fund be solvent by the end of the fiscal year, but a ruling is still pending on whether the district has to plug the entire gap by then or if payment could be spread out over time.
In other business, the board unanimously approved $24.9-million in cuts from the 2005-2006 budget.
Superintendent Gene Harris recommended some of the cuts -- including the closure of Kent Elementary School -- in March, and the rest at the May 10 Business Committee meeting.
The cuts are necessary if the district is to cap annual spending increases at 3 percent, a promise made after voters approved an operating levy last November.
Based on last year's budget, that means an allowable increase of only $17.8-million for fiscal year 2006. Harris said expenses next year are projected to increase by more than $42.7-million, due largely to higher payments to charter schools, negotiated salary increases and insurance costs.
Besides closing Kent next fall, the cuts include eliminating 120 teaching positions because of declining enrollment, the decision to increase elementary school class sizes from 25 to 26 students and allocating fewer art teachers.
More savings will come from reducing the maintenance and telecommunications budgets, changing school schedules so bus routes can be consolidated and shelving a plan to integrate the district's various computer systems, among other things.
Harris said she intends to present the full fiscal year 2006 budget at an upcoming Business Committee meeting, and to the full board on June 7.
Wednesday, May 18, 2005
Kaiser and Blue Cross Excess Reserves Enough
SANTA MONICA, Calif., May 18 /U.S. Newswire/ -- Documents filed by state health plans this week show that the two largest and most profitable insurers, Kaiser and Blue Cross, have enough excess reserves to pay for health insurance for half of the state's uninsured residents for an entire year, according to the Foundation for Taxpayer and Consumer Rights (FTCR). Blue Cross is currently under investigation by state regulators for dramatically raising rates following a recent merger, and FTCR called on the Attorney General today to investigate Kaiser's non-profit status given that the company is holding such excessive reserves.
"It is standard practice for insurers to wallow in huge cash reserves to please their Wall Street bosses and deep pocket investors. Blue Cross' and Kaiser's excessive reserves and unnecessary premium increases are symptomatic of an unregulated and uncompetitive health care market," said Jerry Flanagan of FTCR. "Regulators should require all health insurers to justify their overhead costs and premium increases like auto and home insurers already do."
Blue Cross and Kaiser have a combined excess reserve, known as Tangible Net Equity (TNE), of nearly $11 billion. State law allows the California Department of Managed Health Care (DMHC) to require that a health plan maintain a minimum level of reserve (to ensure the company will remain solvent), but the department currently has no authority to cap the upper amount. FTCR called on DMHC to adopt new rules requiring companies to justify overhead costs including reserves and to provide refunds to patients for excessive rate increases.
The analysis by FTCR reviewed quarter filings of California's 7 largest health plans (Cigna, Aetna, Blue Cross, Kaiser, Blue Shield, PacifiCare, and Health Net) which provide health coverage for over 80 percent of the privately insured market in California. The analysis is available at http://www.consumerwatchdog.org/healthcare/rp/rp005056.pdf
Estimating that the cost of insuring an individual for one year to be $3000, the combined Blue Cross and Kaiser excess reserve is sufficient to provide coverage for 52 percent, or 3,648,611, of the state's approximately 7 million uninsured for an entire year.
The two non-profit health plans among the big 7, Kaiser and Blue Shield, currently have reserves 13 and 5 times, respectively, their required levels. Kaiser has the largest reserve of all state health plans -- $9.5 billion more than the required amount.
"Attorney General Bill Lockyer should investigate Kaiser and Blue Shield and consider revoking their special tax status unless the companies start behaving more like non-profits," said Flanagan.
"It is standard practice for insurers to wallow in huge cash reserves to please their Wall Street bosses and deep pocket investors. Blue Cross' and Kaiser's excessive reserves and unnecessary premium increases are symptomatic of an unregulated and uncompetitive health care market," said Jerry Flanagan of FTCR. "Regulators should require all health insurers to justify their overhead costs and premium increases like auto and home insurers already do."
Blue Cross and Kaiser have a combined excess reserve, known as Tangible Net Equity (TNE), of nearly $11 billion. State law allows the California Department of Managed Health Care (DMHC) to require that a health plan maintain a minimum level of reserve (to ensure the company will remain solvent), but the department currently has no authority to cap the upper amount. FTCR called on DMHC to adopt new rules requiring companies to justify overhead costs including reserves and to provide refunds to patients for excessive rate increases.
The analysis by FTCR reviewed quarter filings of California's 7 largest health plans (Cigna, Aetna, Blue Cross, Kaiser, Blue Shield, PacifiCare, and Health Net) which provide health coverage for over 80 percent of the privately insured market in California. The analysis is available at http://www.consumerwatchdog.org/healthcare/rp/rp005056.pdf
Estimating that the cost of insuring an individual for one year to be $3000, the combined Blue Cross and Kaiser excess reserve is sufficient to provide coverage for 52 percent, or 3,648,611, of the state's approximately 7 million uninsured for an entire year.
The two non-profit health plans among the big 7, Kaiser and Blue Shield, currently have reserves 13 and 5 times, respectively, their required levels. Kaiser has the largest reserve of all state health plans -- $9.5 billion more than the required amount.
"Attorney General Bill Lockyer should investigate Kaiser and Blue Shield and consider revoking their special tax status unless the companies start behaving more like non-profits," said Flanagan.
Tuesday, May 17, 2005
Low-Cost Auto Insurance Program opposed
May 16, 2005
Without first conducting a thorough evaluation, it is premature to expand California's low-cost auto insurance program from two counties to the entire state, according to the Association of California Insurance Companies (ACIC).
"Expanding statewide now is too big of a jump and too soon without knowing the impact and the need for such a program in all 58 California counties. Therefore, we are opposing the legislation," said ACIC President Sam Sorich.
The proposed expansion is contained in legislation, SB 20 by Sen. Martha Escutia (D-Whittier) that is pending on the Senate floor. The pilot, low-cost program would be available statewide beginning April 1, 2006, if the bill is signed into law this year.
The existing program is available now only in Los Angeles and San Francisco counties.
"Without more definitive information on the pilot program's experience and the program's impact on California consumers, the program should not be expanded to other counties. Moreover, there should be a study to determine whether the low-cost program is really needed or desirable for drivers in additional counties," said Sorich.
He pointed out that as of Dec. 31, 2003, 9,665 policies were written in the program's two counties. Last year, 7,202 new policies were written, a marked increase in the program's participation.
"The impact of this recent change in the program's business should be analyzed before there is a final decision on whether to expand the program," Sorich said.
In addition to expanding the program statewide, SB 20 would change the program's scheduled Jan. 1, 2007 sunset to Jan. 1, 2012 and increase the value of cars eligible for the program from $12,000 to $20,000.
"There may be merit in considering an increase in the $12,000 limit. However, SB 20's proposed increase to $20,000 is too great. A more modest increase should be considered," said Sorich.
Without first conducting a thorough evaluation, it is premature to expand California's low-cost auto insurance program from two counties to the entire state, according to the Association of California Insurance Companies (ACIC).
"Expanding statewide now is too big of a jump and too soon without knowing the impact and the need for such a program in all 58 California counties. Therefore, we are opposing the legislation," said ACIC President Sam Sorich.
The proposed expansion is contained in legislation, SB 20 by Sen. Martha Escutia (D-Whittier) that is pending on the Senate floor. The pilot, low-cost program would be available statewide beginning April 1, 2006, if the bill is signed into law this year.
The existing program is available now only in Los Angeles and San Francisco counties.
"Without more definitive information on the pilot program's experience and the program's impact on California consumers, the program should not be expanded to other counties. Moreover, there should be a study to determine whether the low-cost program is really needed or desirable for drivers in additional counties," said Sorich.
He pointed out that as of Dec. 31, 2003, 9,665 policies were written in the program's two counties. Last year, 7,202 new policies were written, a marked increase in the program's participation.
"The impact of this recent change in the program's business should be analyzed before there is a final decision on whether to expand the program," Sorich said.
In addition to expanding the program statewide, SB 20 would change the program's scheduled Jan. 1, 2007 sunset to Jan. 1, 2012 and increase the value of cars eligible for the program from $12,000 to $20,000.
"There may be merit in considering an increase in the $12,000 limit. However, SB 20's proposed increase to $20,000 is too great. A more modest increase should be considered," said Sorich.
Argus makes new deal with Humana
Humana Inc. has chosen Kansas City-based Argus Health Systems Inc. to process pharmacy claims for 4.3 million members of the health network.
The contract covers members of Humana who are covered through commercial employers or Medicare. The deal comes about a year after Argus lost the pharmacy claims business for 2.7 million military members of Humana, said Dick Brown, a Humana spokesman.
An Argus official declined to comment.
The new contract takes effect in September, at which time Argus would succeed Caremark Inc. Argus will provide pharmacy claims processing, reporting and benefits administration services to Humana under the agreement.
The companies did not disclose financial terms of the agreement.
Argus is jointly owned by DST Systems Inc., a Kansas City data-processing company, and Financial Holding Corp., parent company of Americo Life Inc., which is a Kansas City-based insurance holding company.
The contract covers members of Humana who are covered through commercial employers or Medicare. The deal comes about a year after Argus lost the pharmacy claims business for 2.7 million military members of Humana, said Dick Brown, a Humana spokesman.
An Argus official declined to comment.
The new contract takes effect in September, at which time Argus would succeed Caremark Inc. Argus will provide pharmacy claims processing, reporting and benefits administration services to Humana under the agreement.
The companies did not disclose financial terms of the agreement.
Argus is jointly owned by DST Systems Inc., a Kansas City data-processing company, and Financial Holding Corp., parent company of Americo Life Inc., which is a Kansas City-based insurance holding company.
Monday, May 16, 2005
Pairing health savings account with insurance a challenge
By Gail Liberman
Sunday, May 15, 2005
My objective: Find the best deal on a high-deductible health insurance policy and pair it with the best deal on a Health Savings Account.
The Health Savings Account, available to just about anyone who isn't on Medicare, lets you cut your health insurance cost by choosing a high-deductible health plan. To qualify, your health plan deductible must be at least $1,000, $2,000 for family coverage.
With a high-deductible plan, you can make income tax-deductible contributions to a Health Savings Account — as much as $2,600 annually, $5,150 for families. Funds in that savings account grow tax-deferred. You can withdraw from that account income tax-free — provided that withdrawals strictly cover approved medical expenses. Persons over age 55 may contribute an extra $600 annually in 2005 to this Health Savings Account.
Of course, I love anything tax-deductible.
But finding the right combination of a savings/investment account and a high-deductible health insurance plan is tough.
Unfortunately, my own health insurance plan — a $1,000-deductible preferred provider organization (PPO), with cheap $20 co-pays for visits to my primary care physician — is ineligible. So are most health maintenance organizations (HMOs). Reason: Co-pays before you reach your deductible often disqualify a plan under federal regulations.
Even if I were to switch health plans, I never heard of the bank offering the Health Savings Account to which my insurer referred me.
"There are very few banks in Florida that do that at the moment," explains Bob Nay, director of product development for Blue Cross-Blue Shield of Florida. "So we've gone to Internet banks." Nay assures me that his company expects to ally with a large brand-name bank next year. In the meantime, he says, here's the scoop.
Search for health plan first
Even if your insurer says it doesn't have a Health Savings Account-compatible insurance plan, don't give up. You can set this arrangement up on your own with any high-deductible health insurance plan you choose. The catch: It must comply with the federal rules governing a qualifying high-deductible plan, outlined at www.treas.gov. Those rules primarily are:
• The insurance plan must have the minimum deductibles of $1,000 for individuals, $2,000 for families;
• The insurance plan must have annual out-of-pocket expenses that can't exceed $5,100 for individuals, $10,200 for family coverage.
• The deductible must apply to all medical expenses, including prescriptions. Prefer coverage or co-pays before you reach your deductible? Such coverage may only apply to "preventive" care, such as annual physicals, immunizations and pap smears.
Connect to plan to bank
Once you find your health plan, you can open a Health Savings Account, offered by any qualifying financial institution. The financial institution decides which of its investment or savings accounts to offer under the program.
Problem: Many well-known financial institutions initially are setting up Health Savings Accounts only through employers as employee benefits, notes Tom Hricik, national sales director for Mellon Bank, Pittsburgh. Expect more Health Savings Accounts for individuals to debut next year, he says.
Dan Perrin, president of the nonprofit HSA Coalition, Washington, D.C., estimates close to 100 financial institutions nationwide already offer a Health Savings Account. You may be able to find one and also obtain a list of compatible health insurance plans at his Web site, www.hsainsider.com.
HSA Bank, Sheboygan, Wisc., a division of Webster Financial, Waterbury, Conn., is believed to be the largest Health Savings Account provider. It has some 100,000 accounts, Perrin says.
He offers this advice if you're considering Health Savings Accounts:
• Only select a high-deductible Health Savings Account-eligible insurance plan if the premium is at least 35 percent lower than the insurer's low-deductible plan.
• Seek an insurance plan that provides for 100 percent coverage after the deductible in the first couple of years. This, Perrin says, gives you time to build up your health savings account balance to cover more expensive health care costs down the road.
Also:
• Check all fees and minimum thresholds to avoid them.
• If you're offered a Health Savings Account program through an employer, check for an added benefit. The plans may be set up like 401 (k) retirement plans — allowing employer contributions. Contributions may be deducted from your salary — before taxes
• HSA funds can be used to cover long-term care expenses and insurance, and to pay your health insurance if you're unemployed. They also may cover dental and vision care as well as over-the-counter drugs such as aspirin.
Sunday, May 15, 2005
My objective: Find the best deal on a high-deductible health insurance policy and pair it with the best deal on a Health Savings Account.
The Health Savings Account, available to just about anyone who isn't on Medicare, lets you cut your health insurance cost by choosing a high-deductible health plan. To qualify, your health plan deductible must be at least $1,000, $2,000 for family coverage.
With a high-deductible plan, you can make income tax-deductible contributions to a Health Savings Account — as much as $2,600 annually, $5,150 for families. Funds in that savings account grow tax-deferred. You can withdraw from that account income tax-free — provided that withdrawals strictly cover approved medical expenses. Persons over age 55 may contribute an extra $600 annually in 2005 to this Health Savings Account.
Of course, I love anything tax-deductible.
But finding the right combination of a savings/investment account and a high-deductible health insurance plan is tough.
Unfortunately, my own health insurance plan — a $1,000-deductible preferred provider organization (PPO), with cheap $20 co-pays for visits to my primary care physician — is ineligible. So are most health maintenance organizations (HMOs). Reason: Co-pays before you reach your deductible often disqualify a plan under federal regulations.
Even if I were to switch health plans, I never heard of the bank offering the Health Savings Account to which my insurer referred me.
"There are very few banks in Florida that do that at the moment," explains Bob Nay, director of product development for Blue Cross-Blue Shield of Florida. "So we've gone to Internet banks." Nay assures me that his company expects to ally with a large brand-name bank next year. In the meantime, he says, here's the scoop.
Search for health plan first
Even if your insurer says it doesn't have a Health Savings Account-compatible insurance plan, don't give up. You can set this arrangement up on your own with any high-deductible health insurance plan you choose. The catch: It must comply with the federal rules governing a qualifying high-deductible plan, outlined at www.treas.gov. Those rules primarily are:
• The insurance plan must have the minimum deductibles of $1,000 for individuals, $2,000 for families;
• The insurance plan must have annual out-of-pocket expenses that can't exceed $5,100 for individuals, $10,200 for family coverage.
• The deductible must apply to all medical expenses, including prescriptions. Prefer coverage or co-pays before you reach your deductible? Such coverage may only apply to "preventive" care, such as annual physicals, immunizations and pap smears.
Connect to plan to bank
Once you find your health plan, you can open a Health Savings Account, offered by any qualifying financial institution. The financial institution decides which of its investment or savings accounts to offer under the program.
Problem: Many well-known financial institutions initially are setting up Health Savings Accounts only through employers as employee benefits, notes Tom Hricik, national sales director for Mellon Bank, Pittsburgh. Expect more Health Savings Accounts for individuals to debut next year, he says.
Dan Perrin, president of the nonprofit HSA Coalition, Washington, D.C., estimates close to 100 financial institutions nationwide already offer a Health Savings Account. You may be able to find one and also obtain a list of compatible health insurance plans at his Web site, www.hsainsider.com.
HSA Bank, Sheboygan, Wisc., a division of Webster Financial, Waterbury, Conn., is believed to be the largest Health Savings Account provider. It has some 100,000 accounts, Perrin says.
He offers this advice if you're considering Health Savings Accounts:
• Only select a high-deductible Health Savings Account-eligible insurance plan if the premium is at least 35 percent lower than the insurer's low-deductible plan.
• Seek an insurance plan that provides for 100 percent coverage after the deductible in the first couple of years. This, Perrin says, gives you time to build up your health savings account balance to cover more expensive health care costs down the road.
Also:
• Check all fees and minimum thresholds to avoid them.
• If you're offered a Health Savings Account program through an employer, check for an added benefit. The plans may be set up like 401 (k) retirement plans — allowing employer contributions. Contributions may be deducted from your salary — before taxes
• HSA funds can be used to cover long-term care expenses and insurance, and to pay your health insurance if you're unemployed. They also may cover dental and vision care as well as over-the-counter drugs such as aspirin.
Who needs life insurance?
Most consumers normally don't think about life insurance until an important event takes place -- a marriage, the birth of a child, the purchase of a home, or the death of a friend or relative. Brokers say that's the way it should be, since those events highlight a new or previously unrecognized need.
"When do you need it? It's the minute someone else depends on you," said Byron Udell, CEO of AccuQuote, a Wheeling, Ill. quotation and brokerage firm.
The problem, brokers say, is people all too often neglect to act on that need even though most don't carry enough life insurance.
Half of U.S. households now have at least one person with an individual life insurance policy, down from 55 percent in 1992, according to LIMRA, an industry research association.
Many employers, especially large companies, provide workers with some, limited level of life insurance, usually two to three times an employee's annual income. But that coverage falls far below what most people's survivors would typically need.
Many employers allow people to buy additional coverage through the corporate group plan. But before doing so, consumers should check to see if that coverage is portable if they leave for another job, said Don Cullen of The Young Agency, a Syracuse, N.Y. independent insurance agent.
There are norms for figuring out how much additional insurance you need. They vary depending on who you talk to, and needs also differ by a consumers' personal circumstances. The usual rules of thumb suggest that people have total coverage of between 5 and 10 times their annual income. For someone who earns $40,000 each year, that means taking out a policy valued at between $200,000 and $400,000.
But some brokers say that is often not enough for many people, particularly those with younger families who expected to depend on their earnings for many years to come.
"The rule of thumb that I have is that all rules of thumb are wrong because what you really have to do is do a really careful needs analysis," said David Woods, president of the Life and Health Insurance Foundation for Education, an insurance education group funded by the industry.
Woods and others say consumers need to figure out how many years their survivors would need to replace their income and what percentage of it would need to replaced, allowing for inflation and interest income. They can then subtract current savings from that cumulative figure to figure out how much coverage is needed.
The goods news for consumers is that life insurance has gotten much cheaper in recent years. As recently as 10 years ago, a healthy 40-year-old man who has never smoked would've paid nearly $1,000 annually for a $500,000 term life insurance policy, a rate to be held steady for 20 years. But such a consumers would now pay less than $400 a year for the same coverage, Udell said.
A conversation with an insurance agent can help a consumer figure out how much coverage they need. An agent will ask a number of questions about family and personal health conditions, and once a policy is settled on, arrange for a physical examination, paid for by the insurer, to verify that you are in sound health.
"When do you need it? It's the minute someone else depends on you," said Byron Udell, CEO of AccuQuote, a Wheeling, Ill. quotation and brokerage firm.
The problem, brokers say, is people all too often neglect to act on that need even though most don't carry enough life insurance.
Half of U.S. households now have at least one person with an individual life insurance policy, down from 55 percent in 1992, according to LIMRA, an industry research association.
Many employers, especially large companies, provide workers with some, limited level of life insurance, usually two to three times an employee's annual income. But that coverage falls far below what most people's survivors would typically need.
Many employers allow people to buy additional coverage through the corporate group plan. But before doing so, consumers should check to see if that coverage is portable if they leave for another job, said Don Cullen of The Young Agency, a Syracuse, N.Y. independent insurance agent.
There are norms for figuring out how much additional insurance you need. They vary depending on who you talk to, and needs also differ by a consumers' personal circumstances. The usual rules of thumb suggest that people have total coverage of between 5 and 10 times their annual income. For someone who earns $40,000 each year, that means taking out a policy valued at between $200,000 and $400,000.
But some brokers say that is often not enough for many people, particularly those with younger families who expected to depend on their earnings for many years to come.
"The rule of thumb that I have is that all rules of thumb are wrong because what you really have to do is do a really careful needs analysis," said David Woods, president of the Life and Health Insurance Foundation for Education, an insurance education group funded by the industry.
Woods and others say consumers need to figure out how many years their survivors would need to replace their income and what percentage of it would need to replaced, allowing for inflation and interest income. They can then subtract current savings from that cumulative figure to figure out how much coverage is needed.
The goods news for consumers is that life insurance has gotten much cheaper in recent years. As recently as 10 years ago, a healthy 40-year-old man who has never smoked would've paid nearly $1,000 annually for a $500,000 term life insurance policy, a rate to be held steady for 20 years. But such a consumers would now pay less than $400 a year for the same coverage, Udell said.
A conversation with an insurance agent can help a consumer figure out how much coverage they need. An agent will ask a number of questions about family and personal health conditions, and once a policy is settled on, arrange for a physical examination, paid for by the insurer, to verify that you are in sound health.
California Auto Insurance Company Supports Community
SAN FRANCISCO, May 16 /PRNewswire/ -- Esurance, a direct-to-consumer
personal auto insurance company, will sponsor a benefit held by Urban Services
YMCA of San Francisco. The silent auction and wine tasting event will take
place on May 20, from 7 p.m. to 10 p.m. at the Simmons Gallery near Union
Square. All proceeds will benefit Urban Services YMCA's Mentoring, Tutoring,
and Truancy Intervention Programs. For more information or to purchase tickets
to the event, visit http://www.ymcasf.org/UrbanServices/
John Swigart, Esurance Managing Director and CMO, explained, "Esurance has
been really fortunate to have achieved success in so short a time. This would
have been impossible without the support of our Bay Area community. We're
delighted to be able to support an organization like Urban Services YMCA."
Regarding Esurance's support of Bay Area youth and families, Urban
Services YMCA's Founder, Executive Director, and Vice-President of the YMCA of
San Francisco Association stated, "As we celebrate our 10th year of operation,
Urban Services relies more than ever on partnerships with companies in our
community. These partnerships ensure that every young person in the City has
the tools he or she needs to be successful academically, socially, and
physically. Esurance's sponsorship of this event means that more Mission
District youth this year will develop meaningful relationships with adult
mentors, that more summer literacy programs in Bayview-Hunter's Point will
flourish, and that youth throughout the City will have safe and supportive
places to go during high risk after school hours. We are thankful for
Esurance's support."
Swigart concluded, "As a company headquartered in San Francisco, Esurance
has benefited from the Bay Area's world-class talent and positive, visionary
climate. What better way to give back then to encourage the talents and
potential of San Francisco's youth?"
personal auto insurance company, will sponsor a benefit held by Urban Services
YMCA of San Francisco. The silent auction and wine tasting event will take
place on May 20, from 7 p.m. to 10 p.m. at the Simmons Gallery near Union
Square. All proceeds will benefit Urban Services YMCA's Mentoring, Tutoring,
and Truancy Intervention Programs. For more information or to purchase tickets
to the event, visit http://www.ymcasf.org/UrbanServices/
John Swigart, Esurance Managing Director and CMO, explained, "Esurance has
been really fortunate to have achieved success in so short a time. This would
have been impossible without the support of our Bay Area community. We're
delighted to be able to support an organization like Urban Services YMCA."
Regarding Esurance's support of Bay Area youth and families, Urban
Services YMCA's Founder, Executive Director, and Vice-President of the YMCA of
San Francisco Association stated, "As we celebrate our 10th year of operation,
Urban Services relies more than ever on partnerships with companies in our
community. These partnerships ensure that every young person in the City has
the tools he or she needs to be successful academically, socially, and
physically. Esurance's sponsorship of this event means that more Mission
District youth this year will develop meaningful relationships with adult
mentors, that more summer literacy programs in Bayview-Hunter's Point will
flourish, and that youth throughout the City will have safe and supportive
places to go during high risk after school hours. We are thankful for
Esurance's support."
Swigart concluded, "As a company headquartered in San Francisco, Esurance
has benefited from the Bay Area's world-class talent and positive, visionary
climate. What better way to give back then to encourage the talents and
potential of San Francisco's youth?"
Friday, May 13, 2005
Health Insurance Industry and patient care
By Dr. Alexander Strasser
(May 13, 2005) — Physicians used to be in charge of patient care. Now insurance companies are practicing medicine and dictating to health care providers how medical practice should be conducted. Instead of being a patient-oriented clinical art and science, medicine has become an algorithm of care controlled by the insurance industry for the main purpose of lowering costs. Lip service is given to quality and preventive medicine, but the emphasis is on cost savings.
How did this happen? Does the public benefit from insurance company control of medicine? Who profits from this arrangement?
As health care costs began to rise, companies that pay health care benefits looked to the insurance industry to control costs. To do this, insurance companies hired physicians as full-time employees (medical directors). Initially the influence of insurance companies was small, but as more patients had their medical costs covered, insurers gained the upper hand.
Under the guise of promoting good health, they set up elaborate algorithms of care. In time, these became the accepted mode of practice. Extensive and costly infrastructure was established, and health maintenance organizations were spawned. The public message was that insurance companies strived for improved medical care, while the real intent was cost control.
Cost effectiveness was rewarded and the reverse was also true. Free-thinking and innovative diagnostic and medical therapy were discouraged. "Take the safe and cheaper way" is the message.
One very effective way for insurance companies to control physicians was through extensive documentation requirements. Keep the physician busy with paperwork so that he or she will not have time to fight back. This policy has worked. Using preventive medicine as their battle cry, insurance companies demand an ever-growing list of documentation.
In Massachusetts, under the guise of improving mental health care for Medicaid patients, elaborate algorithms of drug therapy for depression were established. Drug treatment of depression is an individual matter, and algorithms of medical care simply are inappropriate.
Medical schools used to teach the discipline of taking a detailed medical history. But in these algorithms, insufficient time is left to the physician for listening.
Initially the concept of quick turnover of patients from a high-cost hospital to a lower-cost (nursing home) level of care might save money. However, this is impossible unless quality is sacrificed. Patients should not be discharged from the hospital until all appropriate diagnostic and treatment steps have been completed.
And, despite all these efforts, health care costs continue to climb as our population ages and health expectations rise. Unless we are willing to ration medical care, costs cannot be controlled.
Eventually our society must decide how much medical care each individual will have paid for. Does the public have the right to unlimited medical care? Enough money for unlimited medical care will never exist. If the public wants unlimited health care, it will have to be paid for in some way. This would mean higher taxes in a government system or higher insurance premiums and out-of-pocket expenses in a private system. A free ride as promised by the insurance industry does not exist.
(May 13, 2005) — Physicians used to be in charge of patient care. Now insurance companies are practicing medicine and dictating to health care providers how medical practice should be conducted. Instead of being a patient-oriented clinical art and science, medicine has become an algorithm of care controlled by the insurance industry for the main purpose of lowering costs. Lip service is given to quality and preventive medicine, but the emphasis is on cost savings.
How did this happen? Does the public benefit from insurance company control of medicine? Who profits from this arrangement?
As health care costs began to rise, companies that pay health care benefits looked to the insurance industry to control costs. To do this, insurance companies hired physicians as full-time employees (medical directors). Initially the influence of insurance companies was small, but as more patients had their medical costs covered, insurers gained the upper hand.
Under the guise of promoting good health, they set up elaborate algorithms of care. In time, these became the accepted mode of practice. Extensive and costly infrastructure was established, and health maintenance organizations were spawned. The public message was that insurance companies strived for improved medical care, while the real intent was cost control.
Cost effectiveness was rewarded and the reverse was also true. Free-thinking and innovative diagnostic and medical therapy were discouraged. "Take the safe and cheaper way" is the message.
One very effective way for insurance companies to control physicians was through extensive documentation requirements. Keep the physician busy with paperwork so that he or she will not have time to fight back. This policy has worked. Using preventive medicine as their battle cry, insurance companies demand an ever-growing list of documentation.
In Massachusetts, under the guise of improving mental health care for Medicaid patients, elaborate algorithms of drug therapy for depression were established. Drug treatment of depression is an individual matter, and algorithms of medical care simply are inappropriate.
Medical schools used to teach the discipline of taking a detailed medical history. But in these algorithms, insufficient time is left to the physician for listening.
Initially the concept of quick turnover of patients from a high-cost hospital to a lower-cost (nursing home) level of care might save money. However, this is impossible unless quality is sacrificed. Patients should not be discharged from the hospital until all appropriate diagnostic and treatment steps have been completed.
And, despite all these efforts, health care costs continue to climb as our population ages and health expectations rise. Unless we are willing to ration medical care, costs cannot be controlled.
Eventually our society must decide how much medical care each individual will have paid for. Does the public have the right to unlimited medical care? Enough money for unlimited medical care will never exist. If the public wants unlimited health care, it will have to be paid for in some way. This would mean higher taxes in a government system or higher insurance premiums and out-of-pocket expenses in a private system. A free ride as promised by the insurance industry does not exist.
Thursday, May 12, 2005
Affirmative Insurance Holdings Announces First Quarter 2005 Results
ADDISON, Texas--(BUSINESS WIRE)--May 12, 2005--Affirmative Insurance Holdings, Inc. (Nasdaq:AFFM), a producer and provider of personal non-standard automobile insurance, today announced financial results for the quarter ended March 31, 2005.
Highlights for the Company's first quarter included:
-- Net income for the first quarter of 2005 was $8.0 million, an increase of 9.8% compared to net income of $7.3 million for the first quarter of 2004;
-- Earnings per share for the first quarter of 2005 were $0.47 per diluted share with an annualized return on equity of 15.3%; and
-- Total revenues for the first quarter of 2005 were $87.1 million, an increase of $14.9 million or 20.7% as compared to total revenue of $72.2 million for the same period of 2004.
"Affirmative produced another quarter of solid profitability as we worked to fully employ the capital raised during 2004," said Thomas E. Mangold, chief executive officer of Affirmative Insurance Holdings, Inc. "We continue to remain focused on developing and deploying our multiple distribution channel strategy, both through organic and acquisition expansion. We saw competitive pressures accelerate during this quarter, particularly in the independent agency distribution channel. From an underwriting and pricing perspective, we continue to exercise strong discipline and have been unwilling to sacrifice underwriting margins for the sake of top line growth. In the quarter we have continued to see favorable loss experience from prior periods."
First Quarter Financial Results
First quarter consolidated net income was $8.0 million or $0.47 per diluted share, up 9.8% from net income of $7.3 million or $0.62 per diluted share for the same period in 2004. Increases in consolidated net income were primarily due to increased retention of gross premium written in our insurance companies at favorable margins. Weighted average diluted shares for the first quarter increased to 17.1 million compared to 11.7 million for the same quarter of the prior year, as a result of the Company's initial public offering in July of 2004.
Consolidated revenues for the three months ended March 31, 2005 were $87.1 million, an increase of $14.9 million, or 20.7%, compared to revenues of $72.2 million for the three months ended March 31, 2004. The increase in consolidated revenues was primarily due to increased retention of gross premiums written and increased invested assets in our insurance companies.
Total controlled premium decreased $5.6 million, or 4.7%, to $113.2 million in the first quarter of 2005 compared to total controlled premium of $118.8 million in the first quarter of 2004. In the Company's Retail distribution channel, total controlled premium increased $3.4 million, or 9.1%, to $41.0 million in the first quarter of 2005, principally due to increases in Texas. Total controlled premium from the Company's Independent Agency distribution channel decreased $6.9 million, or 12.7%, to $47.1 million primarily due to decreases in Florida, partially offset by increases in South Carolina and New Mexico. Total controlled premium from unaffiliated underwriting agencies decreased by $2.2 million, or 8.0%, to $25.1 million in the first quarter of 2005, primarily due to the continued run-off of a cancelled program in California partially offset by increases in two other programs in California.
Revenues from agency operations increased 12.1% to $47.7 million with a pre-tax margin of 17.2%, compared to revenues of $42.6 million with a pre-tax margin of 19.0% for the first quarter of 2004. Net income from agency operations increased 3.0% to $5.3 million from $5.1 million in the same quarter of the prior year.
Revenues from insurance company operations for the first quarter of 2005 were $76.1 million, an increase of 39.6% as compared to first quarter 2004 revenues of $54.5 million. The combined ratio for the first quarter of 2005 was 94.7% as compared to 93.2% for the first quarter of 2004. Net income from insurance company operations increased 34.3% to $3.3 million from $2.5 million in the same quarter of the prior year.
Guidance and Supplemental Information
Based on its current expectations of market conditions, Affirmative is adjusting its guidance for 2005 and estimates full year earnings to be in the range of $1.75 to $1.85 per diluted share from its earlier guidance of $1.90 to $2.10 per diluted share. This guidance is based on 17.1 million diluted shares and does not include the impact from any acquisitions that may occur in the future.
To provide a more complete understanding of Affirmative's financial results, the Company has posted supplemental financial data on the investor relations portion of the Company's website, www.affirmativeholdings.com. The data pertains to first quarter financial results for 2004 and 2005.
Conference call
Affirmative will hold a conference today, Thursday, May 12th, at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. Following a brief presentation, participants will have the opportunity to ask questions. To participate in the call, dial 1-800-299-9086 (international dial 1-617-786-2903), ten minutes before the conference call begins and dial passcode 95900620.
There will also be a real-time audio webcast of the conference call by CCBN. To listen to the live call, select the webcast icon from the investor relations section of Affirmative's website http://www.affirmativeholdings.com at least 15 minutes before the start of the call to register, download, and install any necessary audio software. Individuals accessing the audio webcast will be "listen only" and will not have the ability to take part in the Q&A session.
A digital replay will be available one hour after the conclusion of the call. Interested individuals can access the webcast replay at http://www.affirmativeholdings.com, by clicking on the webcast link. The webcast replay will be available for 30 days after the call. Phone replay will be available through May 19th and may be accessed by dialing 1-888-286-8010 (international dial 1-617-801-6888), then enter passcode 27793299.
Highlights for the Company's first quarter included:
-- Net income for the first quarter of 2005 was $8.0 million, an increase of 9.8% compared to net income of $7.3 million for the first quarter of 2004;
-- Earnings per share for the first quarter of 2005 were $0.47 per diluted share with an annualized return on equity of 15.3%; and
-- Total revenues for the first quarter of 2005 were $87.1 million, an increase of $14.9 million or 20.7% as compared to total revenue of $72.2 million for the same period of 2004.
"Affirmative produced another quarter of solid profitability as we worked to fully employ the capital raised during 2004," said Thomas E. Mangold, chief executive officer of Affirmative Insurance Holdings, Inc. "We continue to remain focused on developing and deploying our multiple distribution channel strategy, both through organic and acquisition expansion. We saw competitive pressures accelerate during this quarter, particularly in the independent agency distribution channel. From an underwriting and pricing perspective, we continue to exercise strong discipline and have been unwilling to sacrifice underwriting margins for the sake of top line growth. In the quarter we have continued to see favorable loss experience from prior periods."
First Quarter Financial Results
First quarter consolidated net income was $8.0 million or $0.47 per diluted share, up 9.8% from net income of $7.3 million or $0.62 per diluted share for the same period in 2004. Increases in consolidated net income were primarily due to increased retention of gross premium written in our insurance companies at favorable margins. Weighted average diluted shares for the first quarter increased to 17.1 million compared to 11.7 million for the same quarter of the prior year, as a result of the Company's initial public offering in July of 2004.
Consolidated revenues for the three months ended March 31, 2005 were $87.1 million, an increase of $14.9 million, or 20.7%, compared to revenues of $72.2 million for the three months ended March 31, 2004. The increase in consolidated revenues was primarily due to increased retention of gross premiums written and increased invested assets in our insurance companies.
Total controlled premium decreased $5.6 million, or 4.7%, to $113.2 million in the first quarter of 2005 compared to total controlled premium of $118.8 million in the first quarter of 2004. In the Company's Retail distribution channel, total controlled premium increased $3.4 million, or 9.1%, to $41.0 million in the first quarter of 2005, principally due to increases in Texas. Total controlled premium from the Company's Independent Agency distribution channel decreased $6.9 million, or 12.7%, to $47.1 million primarily due to decreases in Florida, partially offset by increases in South Carolina and New Mexico. Total controlled premium from unaffiliated underwriting agencies decreased by $2.2 million, or 8.0%, to $25.1 million in the first quarter of 2005, primarily due to the continued run-off of a cancelled program in California partially offset by increases in two other programs in California.
Revenues from agency operations increased 12.1% to $47.7 million with a pre-tax margin of 17.2%, compared to revenues of $42.6 million with a pre-tax margin of 19.0% for the first quarter of 2004. Net income from agency operations increased 3.0% to $5.3 million from $5.1 million in the same quarter of the prior year.
Revenues from insurance company operations for the first quarter of 2005 were $76.1 million, an increase of 39.6% as compared to first quarter 2004 revenues of $54.5 million. The combined ratio for the first quarter of 2005 was 94.7% as compared to 93.2% for the first quarter of 2004. Net income from insurance company operations increased 34.3% to $3.3 million from $2.5 million in the same quarter of the prior year.
Guidance and Supplemental Information
Based on its current expectations of market conditions, Affirmative is adjusting its guidance for 2005 and estimates full year earnings to be in the range of $1.75 to $1.85 per diluted share from its earlier guidance of $1.90 to $2.10 per diluted share. This guidance is based on 17.1 million diluted shares and does not include the impact from any acquisitions that may occur in the future.
To provide a more complete understanding of Affirmative's financial results, the Company has posted supplemental financial data on the investor relations portion of the Company's website, www.affirmativeholdings.com. The data pertains to first quarter financial results for 2004 and 2005.
Conference call
Affirmative will hold a conference today, Thursday, May 12th, at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. Following a brief presentation, participants will have the opportunity to ask questions. To participate in the call, dial 1-800-299-9086 (international dial 1-617-786-2903), ten minutes before the conference call begins and dial passcode 95900620.
There will also be a real-time audio webcast of the conference call by CCBN. To listen to the live call, select the webcast icon from the investor relations section of Affirmative's website http://www.affirmativeholdings.com at least 15 minutes before the start of the call to register, download, and install any necessary audio software. Individuals accessing the audio webcast will be "listen only" and will not have the ability to take part in the Q&A session.
A digital replay will be available one hour after the conclusion of the call. Interested individuals can access the webcast replay at http://www.affirmativeholdings.com, by clicking on the webcast link. The webcast replay will be available for 30 days after the call. Phone replay will be available through May 19th and may be accessed by dialing 1-888-286-8010 (international dial 1-617-801-6888), then enter passcode 27793299.
Health Insurance Higher for smokers
The Associated Press - ATLANTA
State employees who smoke will soon have to start paying an extra $40 a month for health insurance.
The surcharge will affect state workers, public school teachers and their family members who admit to smoking or using tobacco in the past year. It will begin July 1.
Employees will be expected to use the honor system when they sign up for coverage and are asked whether they use tobacco, said Tim Burgess, commissioner of the Georgia Department of Community Health. Those caught lying will lose their health insurance for a year, he said.
Senate Majority Leader Tommie Williams, R-Lyons, said the surcharge will help limit the increase in premiums for state employees and was adopted to fill a projected $400 million shortfall in the insurance fund. Gov. Sonny Perdue proposed a 13 percent rise in premiums, but lawmakers dropped it to 9.5 percent.
"Smokers are very expensive. In the private sector, you pay more if you are a smoker and you pay more for your spouse," Williams said.
About 650,000 people are on the state health insurance plan.
But the surcharge comes as unwelcome news to some employees.
Laurie Reid, a smoker who works as a secretary for the state Board of Pardons and Paroles, said her insurance was going up from $74 to $117 a month.
"That's a lot of money for many state employees," Reid said. "Our hands are tied. We have to have health insurance. What are we to do?"
State Rep. Alan Powell, D-Hartwell, a smoker who says he is trying to quit, thinks the surcharge is unfair.
"It's a legal product," Powell said. "If you want a surcharge, don't just put it on smoking. Why not do it based on weight? If you are going to put the surcharge on smoking, put it on that six-pack drinker."
Williams said many state employees did not realize the insurance system was self-insured, meaning premiums must go up to meet rising health costs and claims.
"Anytime your costs go up for a plan, people are going to grumble," Burgess said. "But I think what I ask state employees to remember is, the costs of the plan are outstripping our ability to pay for it."
Three states _ West Virginia, Alabama and Kentucky _ are already imposing a surcharge on health insurance for employees who smoke, a trend that has also been seen in the private sector.
State employees who smoke will soon have to start paying an extra $40 a month for health insurance.
The surcharge will affect state workers, public school teachers and their family members who admit to smoking or using tobacco in the past year. It will begin July 1.
Employees will be expected to use the honor system when they sign up for coverage and are asked whether they use tobacco, said Tim Burgess, commissioner of the Georgia Department of Community Health. Those caught lying will lose their health insurance for a year, he said.
Senate Majority Leader Tommie Williams, R-Lyons, said the surcharge will help limit the increase in premiums for state employees and was adopted to fill a projected $400 million shortfall in the insurance fund. Gov. Sonny Perdue proposed a 13 percent rise in premiums, but lawmakers dropped it to 9.5 percent.
"Smokers are very expensive. In the private sector, you pay more if you are a smoker and you pay more for your spouse," Williams said.
About 650,000 people are on the state health insurance plan.
But the surcharge comes as unwelcome news to some employees.
Laurie Reid, a smoker who works as a secretary for the state Board of Pardons and Paroles, said her insurance was going up from $74 to $117 a month.
"That's a lot of money for many state employees," Reid said. "Our hands are tied. We have to have health insurance. What are we to do?"
State Rep. Alan Powell, D-Hartwell, a smoker who says he is trying to quit, thinks the surcharge is unfair.
"It's a legal product," Powell said. "If you want a surcharge, don't just put it on smoking. Why not do it based on weight? If you are going to put the surcharge on smoking, put it on that six-pack drinker."
Williams said many state employees did not realize the insurance system was self-insured, meaning premiums must go up to meet rising health costs and claims.
"Anytime your costs go up for a plan, people are going to grumble," Burgess said. "But I think what I ask state employees to remember is, the costs of the plan are outstripping our ability to pay for it."
Three states _ West Virginia, Alabama and Kentucky _ are already imposing a surcharge on health insurance for employees who smoke, a trend that has also been seen in the private sector.
Wednesday, May 11, 2005
Health Insurance premiums skyrocket
House Bill 20 would help small businesses in NC pay for employee health insurance.
Greensboro, NC -- The number of uninsured workers in North Carolina is on the rise.
Officials blame that on rising health care costs and skyrocketing premiums.
So, state lawmakers are introducing a new bill that would help small businesses pay for health insurance for employees.
House Bill 20 is a $42 million dollar proposal.
It would give businesses with 25 employees or less a $400 tax credit per employee per year, helping to offset costs.
Clyde Cummings owns Cummings Auto Service in Greensboro.
He has about 10 employees, and he pays 100% of employee premiums. He says the tax credit would be a tremendous help.
"We've maintained our health insurance coverage, but I don't know how many more years we can keep doing that without some help somewhere. In my opinion, that would be one of the best things legislators could do to help small business," says Cummings.
"I've been in business 32 years and had a medical plan all these years. And the past few years it's been real testy."
This bill would apply to businesses that pay more than 50% of employee premiums.
It is being heard in the House finance committee, and according to lawmakers we talked to, it has a lot of momentum and support.
Greensboro, NC -- The number of uninsured workers in North Carolina is on the rise.
Officials blame that on rising health care costs and skyrocketing premiums.
So, state lawmakers are introducing a new bill that would help small businesses pay for health insurance for employees.
House Bill 20 is a $42 million dollar proposal.
It would give businesses with 25 employees or less a $400 tax credit per employee per year, helping to offset costs.
Clyde Cummings owns Cummings Auto Service in Greensboro.
He has about 10 employees, and he pays 100% of employee premiums. He says the tax credit would be a tremendous help.
"We've maintained our health insurance coverage, but I don't know how many more years we can keep doing that without some help somewhere. In my opinion, that would be one of the best things legislators could do to help small business," says Cummings.
"I've been in business 32 years and had a medical plan all these years. And the past few years it's been real testy."
This bill would apply to businesses that pay more than 50% of employee premiums.
It is being heard in the House finance committee, and according to lawmakers we talked to, it has a lot of momentum and support.
PCI Says Insurers Survive Colorado Legislative Session
May 10, 2005
In what best could be called "Survivor: The Colorado Legislative Session," there were many twists, turns and surprises along the road to adjournment recently, however the insurance industry successfully worked to preserve the state's stable marketplace, according to the Property Casualty Insurers Association of America (PCI).
"With the first Democrat controlled Legislature in 40 years, the insurance industry played defense for most of the session," said Michael Harrold, assistant vice president and regional manager for PCI. "Even when a bill was killed, the issue would arise, like a phoenix, in another committee or chamber. Ultimately, the combination of a coordinated and united industry lobbying effort, key strategic alliances, a new Democratic majority that struggled within its own ranks not to legislatively overreach, and the ever present threat of a Republican governor's veto pen, the industry survived a session that saw most anti-insurance bills or issues either killed, softened through amendment, or put off to another day."
Colorado's insurance scoring law, which is based on the National Conference of Insurance Legislators (NCOIL) model act, remains intact after three attempts to ban insurers use of credit information. Two bills were killed in committee, and then a late bill banning the use of credit was introduced and assigned to the committee which the Senate president, a fierce foe of insurance scoring, was a member. That third bill made it out of committee but died on the Senate floor. The issue will remain alive through the summer and into next session, because a health insurance study resolution (SJR 36) awkwardly includes a call for the study of the use of credit scoring in insurance underwriting.
Another example of the topsy-turvy nature of the 2005 session includes identity theft legislation that would allow a consumer to put a freeze on his or her credit information. Senate Bill 137 morphed from being one of the nation's worst bills on this subject from an insurance perspective to being one that excluded insurance from its provisions. Senate Bill 137 provided an insurance exemption for rating and underwriting in relation to credit reports as it passed the Senate. However, as the House passed the bill, it imposed a freeze requirement on all consumer reports, which included credit reports, loss history reports and motor vehicle records. In the final days of the session a conference committee restored the exemption for insurance rating, underwriting and claims handling and the bill was sent to the governor with those insurance exemptions intact.
Lawmakers also rejected three separate bills that would have prohibited the workers' compensation guaranty fund from seeking reimbursement from large employers. As a result of the Reliance insolvency in 2001, Colorado like many other states is facing increased unfunded liabilities. To address this situation, the Colorado fund has imposed an assessment on several large employers, which led to their repeated efforts to remove the law's net worth provision.
Workers' compensation legislation, HB 1018 originally would have allowed injured employees their choice of provider, and then was amended to require that employers offer injured workers the choice of three health care providers. The bill had its own phoenix-like qualities as it was considered on the House floor, given late status and referred back to committee, and then narrowly defeated when it was considered a second time on the House floor. This bill would have upended a long-standing law that enables the employer to designate the physician who is to provide care to the injured worker. It ignored the efficiency and cost savings to the workers compensation system of having a designated medical provider treat workplace injuries.
After much legislative arm wrestling, a bill raising disability benefit levels (HB 1113) was returned to a form with which the industry could live. Another workers' compensation bill (SB 134) requires that all expert testimony in a workers' compensation case be presented through deposition. As a practical matter, that means that the employer must present its main defense to the claim before the claim has been presented in a hearing. "Requiring the defendant to go first in a legal proceeding violates the fundamental standards of fairness and due process, will give claimants an unfair advantage, and will cause workers compensation costs to go up," said Harrold, who noted that PCI and others have asked Gov. Owens to veto the bill.
Gov. Bill Owens (R) did veto legislation (SB 25) that would have put in place automatic inflation adjustments for the cap on non-economic damages. The bill would have increased the cap on non-economic damages from $366,000 to $440,000 next year and allowed for additional increases on an annual basis. The cap on non-economic damage has been very effective at keeping Colorado's tort reform system in balance.
Other bills that failed to pass included legislation that would have: converted the Colorado workers' compensation fund, Pinnacol Assurance, to a nonprofit insurance company (SB 54); made insurers a proper party defendant when insured is sued in a damages action for negligence (HB 1095); increased the costs awarded to a plaintiff whose final judgment is less than the amount previously offered in settlement by the plaintiff (HB 1111); changed the impairment rating used to determine permanent partial disability benefits for an employee who is injured on the job (HB 1112); rolled back past construction defects reforms (HB 1295); enacted the NCOIL market conduct model law (HB 1301); and diluted Colorado's requirement that a certificate of expert review be filed at the inception of a professional malpractice lawsuit (HB 1348).
Compared to the past few legislative sessions, there was little legislation directed at Colorado's auto insurance system. Legislation to return to a no-fault system (HB 1150) was killed without receiving serious consideration. Auto insurers successfully amended legislation (HB 1250) that would have required up front disclosures about medical payments coverage. The disclosure as originally written may have frightened consumers into purchasing unnecessary coverage. The bill was changed so that the notice was more balanced and would be included in the Summary Disclosure Form that all insureds receive.
"Expected assaults on Colorado's still fledgling tort auto insurance system turned out to be the issue that wasn't in the 2005 legislative session," said Harrold. That was due in large part to an understanding that was reached early in the session by Democratic leaders that the issue merited further study, which will be achieved by the passage of a resolution (HJR 1026) calling for an interim study of the automobile insurance system. "Preserving the current tort auto insurance system that replaced the broken and wasteful no fault system and which has enabled Colorado drivers to save money by purchasing only the coverage they need remains one of our highest priorities," said Harrold.
In what best could be called "Survivor: The Colorado Legislative Session," there were many twists, turns and surprises along the road to adjournment recently, however the insurance industry successfully worked to preserve the state's stable marketplace, according to the Property Casualty Insurers Association of America (PCI).
"With the first Democrat controlled Legislature in 40 years, the insurance industry played defense for most of the session," said Michael Harrold, assistant vice president and regional manager for PCI. "Even when a bill was killed, the issue would arise, like a phoenix, in another committee or chamber. Ultimately, the combination of a coordinated and united industry lobbying effort, key strategic alliances, a new Democratic majority that struggled within its own ranks not to legislatively overreach, and the ever present threat of a Republican governor's veto pen, the industry survived a session that saw most anti-insurance bills or issues either killed, softened through amendment, or put off to another day."
Colorado's insurance scoring law, which is based on the National Conference of Insurance Legislators (NCOIL) model act, remains intact after three attempts to ban insurers use of credit information. Two bills were killed in committee, and then a late bill banning the use of credit was introduced and assigned to the committee which the Senate president, a fierce foe of insurance scoring, was a member. That third bill made it out of committee but died on the Senate floor. The issue will remain alive through the summer and into next session, because a health insurance study resolution (SJR 36) awkwardly includes a call for the study of the use of credit scoring in insurance underwriting.
Another example of the topsy-turvy nature of the 2005 session includes identity theft legislation that would allow a consumer to put a freeze on his or her credit information. Senate Bill 137 morphed from being one of the nation's worst bills on this subject from an insurance perspective to being one that excluded insurance from its provisions. Senate Bill 137 provided an insurance exemption for rating and underwriting in relation to credit reports as it passed the Senate. However, as the House passed the bill, it imposed a freeze requirement on all consumer reports, which included credit reports, loss history reports and motor vehicle records. In the final days of the session a conference committee restored the exemption for insurance rating, underwriting and claims handling and the bill was sent to the governor with those insurance exemptions intact.
Lawmakers also rejected three separate bills that would have prohibited the workers' compensation guaranty fund from seeking reimbursement from large employers. As a result of the Reliance insolvency in 2001, Colorado like many other states is facing increased unfunded liabilities. To address this situation, the Colorado fund has imposed an assessment on several large employers, which led to their repeated efforts to remove the law's net worth provision.
Workers' compensation legislation, HB 1018 originally would have allowed injured employees their choice of provider, and then was amended to require that employers offer injured workers the choice of three health care providers. The bill had its own phoenix-like qualities as it was considered on the House floor, given late status and referred back to committee, and then narrowly defeated when it was considered a second time on the House floor. This bill would have upended a long-standing law that enables the employer to designate the physician who is to provide care to the injured worker. It ignored the efficiency and cost savings to the workers compensation system of having a designated medical provider treat workplace injuries.
After much legislative arm wrestling, a bill raising disability benefit levels (HB 1113) was returned to a form with which the industry could live. Another workers' compensation bill (SB 134) requires that all expert testimony in a workers' compensation case be presented through deposition. As a practical matter, that means that the employer must present its main defense to the claim before the claim has been presented in a hearing. "Requiring the defendant to go first in a legal proceeding violates the fundamental standards of fairness and due process, will give claimants an unfair advantage, and will cause workers compensation costs to go up," said Harrold, who noted that PCI and others have asked Gov. Owens to veto the bill.
Gov. Bill Owens (R) did veto legislation (SB 25) that would have put in place automatic inflation adjustments for the cap on non-economic damages. The bill would have increased the cap on non-economic damages from $366,000 to $440,000 next year and allowed for additional increases on an annual basis. The cap on non-economic damage has been very effective at keeping Colorado's tort reform system in balance.
Other bills that failed to pass included legislation that would have: converted the Colorado workers' compensation fund, Pinnacol Assurance, to a nonprofit insurance company (SB 54); made insurers a proper party defendant when insured is sued in a damages action for negligence (HB 1095); increased the costs awarded to a plaintiff whose final judgment is less than the amount previously offered in settlement by the plaintiff (HB 1111); changed the impairment rating used to determine permanent partial disability benefits for an employee who is injured on the job (HB 1112); rolled back past construction defects reforms (HB 1295); enacted the NCOIL market conduct model law (HB 1301); and diluted Colorado's requirement that a certificate of expert review be filed at the inception of a professional malpractice lawsuit (HB 1348).
Compared to the past few legislative sessions, there was little legislation directed at Colorado's auto insurance system. Legislation to return to a no-fault system (HB 1150) was killed without receiving serious consideration. Auto insurers successfully amended legislation (HB 1250) that would have required up front disclosures about medical payments coverage. The disclosure as originally written may have frightened consumers into purchasing unnecessary coverage. The bill was changed so that the notice was more balanced and would be included in the Summary Disclosure Form that all insureds receive.
"Expected assaults on Colorado's still fledgling tort auto insurance system turned out to be the issue that wasn't in the 2005 legislative session," said Harrold. That was due in large part to an understanding that was reached early in the session by Democratic leaders that the issue merited further study, which will be achieved by the passage of a resolution (HJR 1026) calling for an interim study of the automobile insurance system. "Preserving the current tort auto insurance system that replaced the broken and wasteful no fault system and which has enabled Colorado drivers to save money by purchasing only the coverage they need remains one of our highest priorities," said Harrold.
State Farm cuts auto insurance rates for good drivers
(Charleston-AP) May 10, 2005 - State Farm has cut auto insurance rates for its best drivers for the second time in six months.
State Farm cut its insurance rates by an average of 3.6 percent last month. That followed a 2.6 percent cut in November.
Company spokesman Bruce White says the total savings for policyholders will be nearly $17-million dollars a year.
State Farm says most customers will see some reduction in their premiums. The amount varies based on the number of tickets or accidents in the past few years, where they live or what car they drive.
The company says most of the rate cut comes from deeper discounts extended to the comprehensive portion of policies, which cover losses from theft, vandalism, fire, storm damage and broken widows.
State Farm cut its insurance rates by an average of 3.6 percent last month. That followed a 2.6 percent cut in November.
Company spokesman Bruce White says the total savings for policyholders will be nearly $17-million dollars a year.
State Farm says most customers will see some reduction in their premiums. The amount varies based on the number of tickets or accidents in the past few years, where they live or what car they drive.
The company says most of the rate cut comes from deeper discounts extended to the comprehensive portion of policies, which cover losses from theft, vandalism, fire, storm damage and broken widows.
Tuesday, May 10, 2005
Blacks less likey to have Health Insurance
Young adults and blacks are more likely than the general population to be without health insurance, and three-fifths of the working uninsured are employed in the service sector, according to the first state survey on health insurance.
The survey, based on information from about 17,000 Pennsylvanians, was released Monday and comes just before state-budget negotiations that will likely revolve around the increasing cost of the state's health coverage for disabled and low-income people.
State officials say a 61-page report outlining the survey results gives them more information than ever to guide the state's various publicly funded health insurance plans.
Overall, the survey estimated that 8 percent of Pennsylvanians, or 900,000 people, lack health insurance, less than the 11 percent, or 1.3 million, reported by the Census Bureau.
"The good news is that it's 8 percent, not 11 percent," Rosemarie Greco, the director of the Office of Health Care Reform, said at a Capitol news conference. "Whether it's 900,000 or 1.3 million, it's still too many people."
Close to 1.9 million Pennsylvanians have coverage through Medicaid or one of the state's low-cost insurance programs, while two-thirds, or about 8 million, are insured through the private market.
Excluding senior citizens, who qualify for Medicare coverage, 9 percent of Pennsylvanians 64 and younger do not have health insurance, well below the national average of 17 percent, officials said.
By far, the largest percentage of the uninsured by age are young adults. One-fifth of adults between 18 and 34 are uninsured, accounting for half of those without insurance.
Slightly less than half the uninsured between 18 and 64 work full time, and most said they cannot afford to pay the premiums on the plans offered by their employers.
Three-fifths of the employed uninsured work in the service industry while one-fifth work in retail. Insurance Commissioner Diane Koken said she expects those populations will continue to rise as the economy shifts away from manufacturing.
Those without health insurance "go without needed medical attention, or they go into debt or bankruptcy," Koken said.
Greco and Koken said among the survey's surprises was that 9 percent of Hispanics are uninsured, a figure closer than previously thought to the state average.
On the other hand, some statistics were higher than anticipated, such as uninsured blacks at 14 percent. Also, children 11 to 18 accounted for two-thirds of all uninsured children. Department officials said they are already using the information to figure out how to better reach those groups.
To cover more people, Gov. Ed Rendell has proposed using contributions from the Blue Cross/Blue Shield plans and more federal tobacco settlement money to double the size of the state's low-cost adult health plan, which currently covers 37,000 people.
Also, business groups are pushing various measures in the Legislature that they say would lower the cost of insurance and give more plan options to small employers.
The telephone survey was conducted between March and September of 2004, and gathered information from 6,700 households in all 67 counties covering 17,000 people. The sample margin of error was plus or minus 1.1 percent.
The survey, based on information from about 17,000 Pennsylvanians, was released Monday and comes just before state-budget negotiations that will likely revolve around the increasing cost of the state's health coverage for disabled and low-income people.
State officials say a 61-page report outlining the survey results gives them more information than ever to guide the state's various publicly funded health insurance plans.
Overall, the survey estimated that 8 percent of Pennsylvanians, or 900,000 people, lack health insurance, less than the 11 percent, or 1.3 million, reported by the Census Bureau.
"The good news is that it's 8 percent, not 11 percent," Rosemarie Greco, the director of the Office of Health Care Reform, said at a Capitol news conference. "Whether it's 900,000 or 1.3 million, it's still too many people."
Close to 1.9 million Pennsylvanians have coverage through Medicaid or one of the state's low-cost insurance programs, while two-thirds, or about 8 million, are insured through the private market.
Excluding senior citizens, who qualify for Medicare coverage, 9 percent of Pennsylvanians 64 and younger do not have health insurance, well below the national average of 17 percent, officials said.
By far, the largest percentage of the uninsured by age are young adults. One-fifth of adults between 18 and 34 are uninsured, accounting for half of those without insurance.
Slightly less than half the uninsured between 18 and 64 work full time, and most said they cannot afford to pay the premiums on the plans offered by their employers.
Three-fifths of the employed uninsured work in the service industry while one-fifth work in retail. Insurance Commissioner Diane Koken said she expects those populations will continue to rise as the economy shifts away from manufacturing.
Those without health insurance "go without needed medical attention, or they go into debt or bankruptcy," Koken said.
Greco and Koken said among the survey's surprises was that 9 percent of Hispanics are uninsured, a figure closer than previously thought to the state average.
On the other hand, some statistics were higher than anticipated, such as uninsured blacks at 14 percent. Also, children 11 to 18 accounted for two-thirds of all uninsured children. Department officials said they are already using the information to figure out how to better reach those groups.
To cover more people, Gov. Ed Rendell has proposed using contributions from the Blue Cross/Blue Shield plans and more federal tobacco settlement money to double the size of the state's low-cost adult health plan, which currently covers 37,000 people.
Also, business groups are pushing various measures in the Legislature that they say would lower the cost of insurance and give more plan options to small employers.
The telephone survey was conducted between March and September of 2004, and gathered information from 6,700 households in all 67 counties covering 17,000 people. The sample margin of error was plus or minus 1.1 percent.
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