From Kaiser Network.org
New York state-based Health Insurance Plan of New York and Group Health Inc. on Thursday announced plans to merge, a move that would create the largest health insurance company in New York state and raise "new questions about an expected multibillion-dollar windfall" for the state that had been contingent on HIP's anticipated conversion to a for-profit company, the New York Times reports (Perez-Pena, New York Times, 9/30). Under the merger, HIP and GHI would operate under the HIP Foundation, which would be renamed (Levick, Hartford Courant, 9/30). The foundation would include an equal number of board members from HIP and GHI (Tharp, New York Post, 9/30). The merger, which requires approval by state and federal regulators, would create a company with a combined membership of four million and combined annuals revenue of $7 billion (New York Times, 9/30). The companies will operate separately while an integration plan is crafted (New York Post, 9/30). There is no purchase price for the deal because both insurers are not-for-profit companies (Hartford Courant, 9/30). Ilene Margolin, a spokesperson for the two companies, said the merger could be finalized in late 2005 or early 2006 (Wechsler, Albany Times Union, 9/30). HIP and GHI officials plan to sign a contract soon and expect regulatory approval within two months of signing, the Hartford Courant reports.
For-Profit Conversion?
According to the Courant, HIP -- which has about 1.4 million members in New York, Connecticut and Massachusetts -- "has been hoping to go public for years" in an effort to boost its ability to compete with national insurers (Hartford Courant, 9/30). For-profit conversions require approval from the New York state Legislature. State officials' position is that they will approve such deals only if the state becomes the owner of a large portion of the merged company's stock, according to the Times. If the combined HIP and GHI were to go public under such circumstances, the state could make at least $2 billion to $3 billion, the Times reports. GHI officials in the past have said they do not wish to convert to for-profit status, but the merger plans suggest that GHI "had softened its stance," the Times reports. Howard Rubenstein, a spokesperson for the two companies, said the conversion depends on the actions of the Legislature, adding, "Conversion will be a question for consideration by the new board of directors of the consolidated holding company" (New York Times, 9/30). However, Margolin said the conversion is "something that's under serious consideration," adding, "It's very much on the radar screen" (Albany Times Union, 9/30). Charles Boorady, a health insurance industry analyst at Citigroup, said GHI "clearly is now sending a pro-conversion message to the public" by agreeing to merge with HIP. However, Sheryl Skolnick, a senior health care analyst at Fulcrum Global Partners, said the prospects for the conversion were still uncertain. "The infighting about who gets the money has been so intense," Skolnick said, adding, "We'll have to wait and see how the merged entity behaves." New York Assembly Health Committee Chair Richard Gottfried said, "I was told that HIP members of the new board would continue to advocate for the conversion. But what the GHI members would think, I have no idea" (New York Times, 9/30).
Additional Reaction
Margolin said, "As we look at the marketplace, it's characterized by more and more mergers, bigger and bigger," adding, "In order for us to compete with the national plans, we though it would be best to get together to be a strong, large, local company" (Albany Times Union, 9/30). However, Charles Bell, programs director for Consumers Union, said the size of the combined company would decrease competition for municipal contracts. More than 800,000 of GHI's 2.6 million members are municipal employees, while HIP insures more than 300,000 municipal workers, Rubenstein said (New York Times, 9/30).
Friday, September 30, 2005
Health Insurer pushes health budgets
By Marguerite Higgins
September 30, 2005
National health insurer Humana Inc. this week opened a campaign to encourage families to budget for health care costs.
The Louisville, Ky., company is working with Consumer Action, a San Francisco nonprofit group advocating consumer rights, to promote the idea.
A Web site, www.familyhealthbudget.com, enables consumers to calculate an estimate of their yearly health costs.
"Employees are bearing more and more of the health care costs over time," said Humana President and Chief Executive Officer Michael McCallister. Many U.S. families do not budget these costs and are unaware of what they spend on average, he said at a Washington press conference on Tuesday.
Mr. McCallister would not say how much the campaign cost Humana, describing it as a "modest underwriting" for the company. Humana plans to expand the Web site, adding a Spanish version and information packets, as the campaign unfolds.
In addition to giving an estimated total, the Web site also gives broad suggestions on how consumers can improve their health care budgets.
Advice for lowering out-of-pocket expenses includes buying more generic drugs, visiting the emergency room only for emergencies and looking into free-standing diagnostic and surgical centers.
Consumer Action Executive Director Ken McEldowney said he felt confident Humana, with 7 million policyholders, was not pressuring consumers to buy a particular health plan through the Web site.
Midsize health option
Benu Inc. this month entered the D.C. area with a new health care option for midsize businesses.
The San Mateo, Calif., company works with national health insurers to provide competitive health plans from each insurer to workers in midsize companies, which have at least 75 employees.
"This market segment doesn't have a lot of options because they aren't large enough to have negotiating power with insurers and not small enough to take advantage of government regulations," said Benu President and Chief Executive Officer Jeffrey Closs.
Benu started offering the health plans to companies in the District, Maryland and Northern Virginia in addition to its current markets in Oregon and Washington state.
In the D.C. area, Benu is working with insurance carriers Kaiser Permanente and Cigna Corp. to provide health plans for the businesses.
Benu generally offers more health options to businesses, compared with what they might get by negotiating on their own because of a risk adjustment Benu performs for insurance carriers, Mr. Closs said.
That risk adjustment compensates the insurers for the risk they take in enrolling all of the employees in the customer company.
September 30, 2005
National health insurer Humana Inc. this week opened a campaign to encourage families to budget for health care costs.
The Louisville, Ky., company is working with Consumer Action, a San Francisco nonprofit group advocating consumer rights, to promote the idea.
A Web site, www.familyhealthbudget.com, enables consumers to calculate an estimate of their yearly health costs.
"Employees are bearing more and more of the health care costs over time," said Humana President and Chief Executive Officer Michael McCallister. Many U.S. families do not budget these costs and are unaware of what they spend on average, he said at a Washington press conference on Tuesday.
Mr. McCallister would not say how much the campaign cost Humana, describing it as a "modest underwriting" for the company. Humana plans to expand the Web site, adding a Spanish version and information packets, as the campaign unfolds.
In addition to giving an estimated total, the Web site also gives broad suggestions on how consumers can improve their health care budgets.
Advice for lowering out-of-pocket expenses includes buying more generic drugs, visiting the emergency room only for emergencies and looking into free-standing diagnostic and surgical centers.
Consumer Action Executive Director Ken McEldowney said he felt confident Humana, with 7 million policyholders, was not pressuring consumers to buy a particular health plan through the Web site.
Midsize health option
Benu Inc. this month entered the D.C. area with a new health care option for midsize businesses.
The San Mateo, Calif., company works with national health insurers to provide competitive health plans from each insurer to workers in midsize companies, which have at least 75 employees.
"This market segment doesn't have a lot of options because they aren't large enough to have negotiating power with insurers and not small enough to take advantage of government regulations," said Benu President and Chief Executive Officer Jeffrey Closs.
Benu started offering the health plans to companies in the District, Maryland and Northern Virginia in addition to its current markets in Oregon and Washington state.
In the D.C. area, Benu is working with insurance carriers Kaiser Permanente and Cigna Corp. to provide health plans for the businesses.
Benu generally offers more health options to businesses, compared with what they might get by negotiating on their own because of a risk adjustment Benu performs for insurance carriers, Mr. Closs said.
That risk adjustment compensates the insurers for the risk they take in enrolling all of the employees in the customer company.
Durbin makes deal on health-care coverage
By DORI MEINERT
COPLEY NEWS SERVICE
Published Friday, September 30, 2005
WASHINGTON - After blocking a Senate bill for months because he said it shortchanged Illinois, U.S. Sen. Dick Durbin on Thursday announced a compromise that would restore some funding for Illinoisans who don't qualify for private insurance because of pre-existing medical conditions.
The compromise would increase Illinois' share of the funds to $5.4 million a year, up from $3.4 million as proposed in the original Senate bill.
However, that's still less than the average of $7.5 million a year Illinois received in 2002 and 2003 because more states are seeking the federal grants, Durbin aides said. The state high-risk pools haven't received any federal funding in two years.
"This is a victory for Illinois and the people who depend on the federal government for their health coverage," said Durbin of the compromise reached Wednesday night.
In February, the Springfield Democrat placed a hold on the Senate bill that reauthorizes a grant program for states to create and run high-risk insurance pools, objecting to a proposed formula change that would reduce funding to Illinois and other large states. The bill, which passed the Senate Health, Education, Labor and Pensions Committee, would have resulted in hundreds of Illinoisans losing their health insurance, Durbin said.
Earlier this month, the Council for Affordable Health Insurance, an insurance trade group, protested Durbin's hold on the legislation.
"One senator should not stop needed help to states providing an important health insurance safety net to the sickest Americans," the group said in a letter to Senate Majority Leader Bill Frist, R-Tenn.
Responding to the criticism, Durbin wrote back: "There is no reason a state like Illinois that has 1.8 million people lacking access to health insurance should suffer a funding cut of 60 percent while a state like South Dakota with 90,000 uninsured people sees its funding more than double. The money should follow the people in need, not be determined by politics."
On Thursday, Angela Hunter, the council's director of federal affairs, praised the agreement that would allow the legislation to move toward final passage.
"I knew this issue could be resolved if people just sat and talked about it," Hunter said.
Timothy Sullivan, interim director of the Illinois Comprehensive Health Insurance Plan, called the agreement "an improvement" over the original Senate bill.
"To that extent, it's a positive for Illinois," Sullivan said.
Illinois has 1.7 million uninsured and 17,000 participants in its two high-risk health insurance pools. More than 64 percent of the cost of medical treatment is paid by insurance premiums, while the remainder comes from state funds or assessments on the insurance industry.
The compromise bill is expected to pass the full Senate soon and to be approved by the House. A House-Senate conference won't be necessary because House and Senate committee leaders have already OK'd the agreement, Durbin's aides said.
Under existing law, the federal funds were based on the number of uninsured people in each state, a formula that benefited large states such as Illinois.
The compromise directs that 40 percent of the funding would be divided equally among all states, with 30 percent distributed to certain states based on the numbers of uninsured and 30 percent distributed based on the number of people in the state's high-risk pools, Durbin aides said.
The original Senate bill would have given 50 percent of the available funds to all states, 25 percent according to the number of uninsured and 25 percent based on the number of people in the state's high-risk pools.
The House bill would give one-third to each of those three categories. Illinois would have received $3.8 million under the House formula.
COPLEY NEWS SERVICE
Published Friday, September 30, 2005
WASHINGTON - After blocking a Senate bill for months because he said it shortchanged Illinois, U.S. Sen. Dick Durbin on Thursday announced a compromise that would restore some funding for Illinoisans who don't qualify for private insurance because of pre-existing medical conditions.
The compromise would increase Illinois' share of the funds to $5.4 million a year, up from $3.4 million as proposed in the original Senate bill.
However, that's still less than the average of $7.5 million a year Illinois received in 2002 and 2003 because more states are seeking the federal grants, Durbin aides said. The state high-risk pools haven't received any federal funding in two years.
"This is a victory for Illinois and the people who depend on the federal government for their health coverage," said Durbin of the compromise reached Wednesday night.
In February, the Springfield Democrat placed a hold on the Senate bill that reauthorizes a grant program for states to create and run high-risk insurance pools, objecting to a proposed formula change that would reduce funding to Illinois and other large states. The bill, which passed the Senate Health, Education, Labor and Pensions Committee, would have resulted in hundreds of Illinoisans losing their health insurance, Durbin said.
Earlier this month, the Council for Affordable Health Insurance, an insurance trade group, protested Durbin's hold on the legislation.
"One senator should not stop needed help to states providing an important health insurance safety net to the sickest Americans," the group said in a letter to Senate Majority Leader Bill Frist, R-Tenn.
Responding to the criticism, Durbin wrote back: "There is no reason a state like Illinois that has 1.8 million people lacking access to health insurance should suffer a funding cut of 60 percent while a state like South Dakota with 90,000 uninsured people sees its funding more than double. The money should follow the people in need, not be determined by politics."
On Thursday, Angela Hunter, the council's director of federal affairs, praised the agreement that would allow the legislation to move toward final passage.
"I knew this issue could be resolved if people just sat and talked about it," Hunter said.
Timothy Sullivan, interim director of the Illinois Comprehensive Health Insurance Plan, called the agreement "an improvement" over the original Senate bill.
"To that extent, it's a positive for Illinois," Sullivan said.
Illinois has 1.7 million uninsured and 17,000 participants in its two high-risk health insurance pools. More than 64 percent of the cost of medical treatment is paid by insurance premiums, while the remainder comes from state funds or assessments on the insurance industry.
The compromise bill is expected to pass the full Senate soon and to be approved by the House. A House-Senate conference won't be necessary because House and Senate committee leaders have already OK'd the agreement, Durbin's aides said.
Under existing law, the federal funds were based on the number of uninsured people in each state, a formula that benefited large states such as Illinois.
The compromise directs that 40 percent of the funding would be divided equally among all states, with 30 percent distributed to certain states based on the numbers of uninsured and 30 percent distributed based on the number of people in the state's high-risk pools, Durbin aides said.
The original Senate bill would have given 50 percent of the available funds to all states, 25 percent according to the number of uninsured and 25 percent based on the number of people in the state's high-risk pools.
The House bill would give one-third to each of those three categories. Illinois would have received $3.8 million under the House formula.
Drive Insurance from Progressive Zooms Past Internet Milestone
MAYFIELD VILLAGE, Ohio--(BUSINESS WIRE)--Sept. 29, 2005--More than one million consumers have heeded the call of the Drive(R) Insurance from Progressive marketing campaign and visited driveinsurance.com to find out more about the benefits of buying auto insurance through an independent agent or broker, including personal service and advice, competitive rates, and choice. The Web site was introduced in December 2004 as part of the launch of the Drive brand, which promotes the more than 30,000 independent agencies that sell Drive Insurance products across the country. The Drive Group of Progressive Insurance companies is the country's number one writer of private passenger auto insurance through independent agents and brokers.
Drive also recently enhanced the Web site's popular "Find an Agent" feature. The feature is used, on average, more than 5,000 times a week by consumers looking for an agent or broker writing Drive personal auto, motorcycle, boat, RV or commercial auto insurance. Now, consumers looking for an agency offering Drive commercial auto insurance will get a list of Drive agencies with commercial truck insurance specialists highlighted by a truck icon. Consumers, prompted to go to the Web site in Drive's national television advertising campaign, can use Find an Agent to quickly and easily find a Drive agency using search criteria as broad as ZIP code or as specific as an insurance product.
The Web site is not only an important tool in helping consumers get in touch with independent agents and brokers, but a useful tool for current Drive customers to use to access their policy. Customers can login to the "Manage Your Policy" feature on driveinsurance.com 24 hours a day to view and print policy documents and ID cards, update their personal information, quote policy changes, and more.
"One million visitors is an exciting milestone and a pretty good indicator to us that Drive is getting the message out to consumers about the benefits of doing business with independent agents and brokers," said Drive Group President Bob Williams. "Our plan is to continue to enhance the site - now a key part of the Drive brand - to make it even more visible and more popular and an even greater tool for our agents and brokers."
Drive also recently enhanced the Web site's popular "Find an Agent" feature. The feature is used, on average, more than 5,000 times a week by consumers looking for an agent or broker writing Drive personal auto, motorcycle, boat, RV or commercial auto insurance. Now, consumers looking for an agency offering Drive commercial auto insurance will get a list of Drive agencies with commercial truck insurance specialists highlighted by a truck icon. Consumers, prompted to go to the Web site in Drive's national television advertising campaign, can use Find an Agent to quickly and easily find a Drive agency using search criteria as broad as ZIP code or as specific as an insurance product.
The Web site is not only an important tool in helping consumers get in touch with independent agents and brokers, but a useful tool for current Drive customers to use to access their policy. Customers can login to the "Manage Your Policy" feature on driveinsurance.com 24 hours a day to view and print policy documents and ID cards, update their personal information, quote policy changes, and more.
"One million visitors is an exciting milestone and a pretty good indicator to us that Drive is getting the message out to consumers about the benefits of doing business with independent agents and brokers," said Drive Group President Bob Williams. "Our plan is to continue to enhance the site - now a key part of the Drive brand - to make it even more visible and more popular and an even greater tool for our agents and brokers."
Progressive to Write Auto Insurance in N.J.
From Insurance Journal
September 29, 2005
Progressive will begin writing auto insurance policies in New Jersey, according to The Associated Press.
The Mayfield Village, Ohio-based auto insurer said both Progressive and Progressive Direct, its independent agency unit, will offer service through local agents and the company's Web site. An official announcement is to be made Oct. 3.
Progressive is the latest of several auto insurers to offer policies in the state since auto insurance reforms were implemented in 2003.
September 29, 2005
Progressive will begin writing auto insurance policies in New Jersey, according to The Associated Press.
The Mayfield Village, Ohio-based auto insurer said both Progressive and Progressive Direct, its independent agency unit, will offer service through local agents and the company's Web site. An official announcement is to be made Oct. 3.
Progressive is the latest of several auto insurers to offer policies in the state since auto insurance reforms were implemented in 2003.
Health insurance giant moves away
THE Guildford headquarters of healthcare insurance giant, Standard Life is to shut up shop and move to its Bournemouth office as a result of the company’s acquisition of the private medical insurance PMI business of FirstAssist.
The move, which is expected to take up to two years to complete, will see the leading private medical insurance provider increase its share in the private medical insurance market from its current fourth place to third.
Up to 350 Guildford-based staff may locate to the company’s south coast or accept redundancy packages and the formal portfolio transfer of the insurance risk to Standard Life Healthcare will be completed by the first quarter of 2006.
With the Guildford office unable to accommodate the extra 300 staff being gained as part of the acquisition, the move to Bournemouth was a necessity, explained company chief executive, Mike Hall.
“This acquisition is a great opportunity for our healthcare business to expand quickly and profitably,” he said.
“Restricted space at our offices in Wey House in Farnham Road, along with higher rates and rents meant that moving FirstAssist staff to Guildford was not a cost effective option. To make the most of our acquisition we need move the focus of our business to an area where expansion makes the best business sense.”
The company has made the move in a bid to grow profitably at a faster pace by increasing its share in the private medical insurance market.
And as part of the collaborative venture, FirstAssist will provide its complementary range of health and well-being services as well as marketing Standard Life Healthcare’s PMI products as part of its health insurance and services portfolio. “At the same time, the decision to relocate to Bournemouth has not been an easy one to take,” continued Hall.
“We have thought long and hard about what is best for our business in the long term and we are convinced that this is the right move to make.
“As we evaluated this business it became clear that we would need to move our head office. Keeping all three sites simply would not have been practical as we would lose many of the economies of scale arising from the acquisition.”
Standard Life offers a wide range of individual and corporate plans sold via independent financial advisors and intermediaries, direct sales and marketing and covers more than 400,000 people.
The Guildford office has been in the town since the early 1990s and is probably best renown locally for its work with CHASE hospice as well as charity work for Disability Challengers, The Beacon and Go 50. It was also one of the sponsors of the Millenium sundial which stands near the River Wey.
The move, which is expected to take up to two years to complete, will see the leading private medical insurance provider increase its share in the private medical insurance market from its current fourth place to third.
Up to 350 Guildford-based staff may locate to the company’s south coast or accept redundancy packages and the formal portfolio transfer of the insurance risk to Standard Life Healthcare will be completed by the first quarter of 2006.
With the Guildford office unable to accommodate the extra 300 staff being gained as part of the acquisition, the move to Bournemouth was a necessity, explained company chief executive, Mike Hall.
“This acquisition is a great opportunity for our healthcare business to expand quickly and profitably,” he said.
“Restricted space at our offices in Wey House in Farnham Road, along with higher rates and rents meant that moving FirstAssist staff to Guildford was not a cost effective option. To make the most of our acquisition we need move the focus of our business to an area where expansion makes the best business sense.”
The company has made the move in a bid to grow profitably at a faster pace by increasing its share in the private medical insurance market.
And as part of the collaborative venture, FirstAssist will provide its complementary range of health and well-being services as well as marketing Standard Life Healthcare’s PMI products as part of its health insurance and services portfolio. “At the same time, the decision to relocate to Bournemouth has not been an easy one to take,” continued Hall.
“We have thought long and hard about what is best for our business in the long term and we are convinced that this is the right move to make.
“As we evaluated this business it became clear that we would need to move our head office. Keeping all three sites simply would not have been practical as we would lose many of the economies of scale arising from the acquisition.”
Standard Life offers a wide range of individual and corporate plans sold via independent financial advisors and intermediaries, direct sales and marketing and covers more than 400,000 people.
The Guildford office has been in the town since the early 1990s and is probably best renown locally for its work with CHASE hospice as well as charity work for Disability Challengers, The Beacon and Go 50. It was also one of the sponsors of the Millenium sundial which stands near the River Wey.
Thursday, September 29, 2005
Hikes in Insurance Rates Expected After Katrina
Morning Edition, September 29, 2005 · The insurance industry appears ready to absorb the massive costs of Hurricane Katrina -- estimates range from $35 billion to $60 billion -- but some companies are hiking rates in the Gulf region in preparation for future storm damage.
AIG Sues Ex-Boss Over $20 Billion Stock Stake
By Dow Jones
SAN FRANCISCO A(Dow Jones) -- American International Group has filed suit in U.S. District Court in Manhattan seeking to wrest control of $20 billion in shares - about 12% of the giant insurer - from former Chief Executive Maurice R. "Hank" Greenberg, according to a media report Wednesday.
The suit claims the shares were set aside for the company's (AIG) benefit and must be surrendered by its owner, Starr International, a Bermuda-based private equity firm controlled by Greenberg, The Wall Street Journal reported in its online edition. See
AIG's move is a countersuit to litigation brought by Starr International earlier this year to secure the release of art, antiques and other property that Greenberg asserts should be in his possession as head of the private company, The Journal said.
AIG seeks to put the shares in a "constructive trust on behalf of AIG," run by AIG's management, The Journal said.
Lawyers representing Greenberg and Starr International said AIG's suit is without merit, according to The Journal.
In late May, AIG restated five years of reported profits, slicing off 10%, or $3.9 billion. AIG shares have fallen 16% since the company disclosed in February state and federal subpoenas about its accounting.
(END) Dow Jones Newswires
SAN FRANCISCO A(Dow Jones) -- American International Group has filed suit in U.S. District Court in Manhattan seeking to wrest control of $20 billion in shares - about 12% of the giant insurer - from former Chief Executive Maurice R. "Hank" Greenberg, according to a media report Wednesday.
The suit claims the shares were set aside for the company's (AIG) benefit and must be surrendered by its owner, Starr International, a Bermuda-based private equity firm controlled by Greenberg, The Wall Street Journal reported in its online edition. See
AIG's move is a countersuit to litigation brought by Starr International earlier this year to secure the release of art, antiques and other property that Greenberg asserts should be in his possession as head of the private company, The Journal said.
AIG seeks to put the shares in a "constructive trust on behalf of AIG," run by AIG's management, The Journal said.
Lawyers representing Greenberg and Starr International said AIG's suit is without merit, according to The Journal.
In late May, AIG restated five years of reported profits, slicing off 10%, or $3.9 billion. AIG shares have fallen 16% since the company disclosed in February state and federal subpoenas about its accounting.
(END) Dow Jones Newswires
Reilly to seek 18 percent cut in car insurance
September 29, 2005
BOSTON --Attorney General Thomas Reilly says he will ask for an 18 percent reduction in the state's auto insurance rates for next year, which, if approved, would trim nearly $200 off the average statewide premium.
Just a month ago, Reilly said publicly he would seek a 10 percent rate reduction, but indicated that circumstances have changed.
Industry data from 2004 shows that auto insurers are paying out less in claims because of fewer accidents and lower repair costs and the industry's estimate of future income is too conservative, he said.
"Families are being absolutely crushed by the cost of operating their cars right now, from the skyrocketing price of gas to the high cost of auto insurance," Reilly said in a statement released Wednesday. "We've done our work, and the numbers are clear."
The Automobile Insurers Bureau of Massachusetts is seeking a 0.1 percent rate cut next year, marking the first time the industry has asked for a decrease.
"Any decrease of that magnitude would stagger the entire insurance industry here," said Daniel Johnston, president of the organization that represents the state's auto insurers, in response to Reilly's latest proposal.
But Johnston would not comment further because he had not seen the attorney general's proposal.
Both the industry's recommendations and Reilly's proposal will go to Insurance Commissioner Julianne Bowler, who will set the final 2006 rate in December. The decision can be challenged in court.
Bowler has lamented the politicization of the process that tends to lead to rates that are too low.
"The political fiasco that is the rate-setting process in Massachusetts -- the passion play that we have -- makes it nearly impossible to move anywhere but the low point," she said earlier this week.
Massachusetts in the only state where auto insurance rates are set by state regulators. The process begins with the industry's recommendation, followed by the attorney general, who is charged with representing the interests of drivers.
Auto insurance is quickly becoming an issue in the governor's race. Reilly, a Democrat, has announced he will challenge Republican Gov. Mitt Romney.
Romney has made his own proposed changes in the auto insurance system to foster competition, including deregulating the industry to let companies set their own rates. Romney filed a bill in June that he said would reward better drivers with lower rates.
Glenn Kaplan, head of the attorney general's insurance division, said he would file Reilly's rate request on Thursday.
While the industry said recent downturns in claims is an aberration, Kaplan said the attorney general thinks aging baby boomers tend to get involved in fewer accidents, and those that do occur are less severe because of advances in automotive safety technology. More aggressive anti-fraud efforts are also reducing claims losses, he said.
BOSTON --Attorney General Thomas Reilly says he will ask for an 18 percent reduction in the state's auto insurance rates for next year, which, if approved, would trim nearly $200 off the average statewide premium.
Just a month ago, Reilly said publicly he would seek a 10 percent rate reduction, but indicated that circumstances have changed.
Industry data from 2004 shows that auto insurers are paying out less in claims because of fewer accidents and lower repair costs and the industry's estimate of future income is too conservative, he said.
"Families are being absolutely crushed by the cost of operating their cars right now, from the skyrocketing price of gas to the high cost of auto insurance," Reilly said in a statement released Wednesday. "We've done our work, and the numbers are clear."
The Automobile Insurers Bureau of Massachusetts is seeking a 0.1 percent rate cut next year, marking the first time the industry has asked for a decrease.
"Any decrease of that magnitude would stagger the entire insurance industry here," said Daniel Johnston, president of the organization that represents the state's auto insurers, in response to Reilly's latest proposal.
But Johnston would not comment further because he had not seen the attorney general's proposal.
Both the industry's recommendations and Reilly's proposal will go to Insurance Commissioner Julianne Bowler, who will set the final 2006 rate in December. The decision can be challenged in court.
Bowler has lamented the politicization of the process that tends to lead to rates that are too low.
"The political fiasco that is the rate-setting process in Massachusetts -- the passion play that we have -- makes it nearly impossible to move anywhere but the low point," she said earlier this week.
Massachusetts in the only state where auto insurance rates are set by state regulators. The process begins with the industry's recommendation, followed by the attorney general, who is charged with representing the interests of drivers.
Auto insurance is quickly becoming an issue in the governor's race. Reilly, a Democrat, has announced he will challenge Republican Gov. Mitt Romney.
Romney has made his own proposed changes in the auto insurance system to foster competition, including deregulating the industry to let companies set their own rates. Romney filed a bill in June that he said would reward better drivers with lower rates.
Glenn Kaplan, head of the attorney general's insurance division, said he would file Reilly's rate request on Thursday.
While the industry said recent downturns in claims is an aberration, Kaplan said the attorney general thinks aging baby boomers tend to get involved in fewer accidents, and those that do occur are less severe because of advances in automotive safety technology. More aggressive anti-fraud efforts are also reducing claims losses, he said.
Empoyers get help with health insurance
By Kathleen O'Dell
News-Leader
Missouri employers have a new product for employee health insurance that uses the power of group purchasing to offer cost-effective rates without red tape and restrictions.
AIMCare will waive the health information typically required on each employee, according to Associated Industries of Missouri, or AIM, the state's leading business-trade association, which unveiled the plan Wednesday.
AIMCare will offer small-business owners the same kind of buying power as large corporations, and allow them to provide employees with affordable health insurance, said AIM President Gary Marble.
The plan is open to all Missouri employers with at least two employees. The insurance carrier is American Community Mutual Insurance Co. of Livonia, Mich., which has been in business since 1938.
AIMCare's initial rates will not be based on the health of an individual employee, but will be based on age, gender, resident address, marital status, network chosen, workplace industry and plan design, Marble said.
Under traditional group health plans, an agent or insurance carrier offers a rate or set of benefits and requires detailed health status statements on each employee, said Darren Coffman, owner of Benefits Unlimited in Springfield. The firm will be the insurance writer for AIMCare.
Then underwriters often return with higher price quotes, saying the company needs more money to support the risk level, Coffman said.
"For once, because of the large group (all AIMCare-covered lives), we will show employers a set of rates based on their employees, and that will be the rate they will get and expect," Coffman said.
Through a premium refund program, employers can get up to 5 percent of their premiums returned, based upon the experience of the entire program.
AIMCare will also use online technology to simplify the process.
Employers interested in purchasing insurance can go to www.aimcareon line.com. After answering a series of questions they will receive a quote on the cost of health-care insurance. Employers can then apply online, receive benefits and subscribe to services online, said Marvin Hays, president of Street-Smart Solutions, the technology partner in AIMCare. Employers can administer their plan online, and the system will send e-mail reminders when employees are due to begin coverage or cease coverage.
"This is a great plan for small-business owners," Marble said. "To the person, this is the No. 1 issue."
The Employee Benefit Research Institute says that due to the rising cost of health care in 2003, roughly 60 percent of America's 44.7 million uninsured people were employed. About half of the 26.6 million people working without health insurance were employed at companies with fewer than 24 employees.
In the greater Springfield area, 84.9 percent of businesses have fewer than 20 employees, according to the U.S. Census Bureau.
Springfield-area employees with AIMCare will be directed to use the St. John's Health System network of services and health care providers through two physician-provider organizations, HealthLink and Private Health Care Systems, Marble said.
News-Leader
Missouri employers have a new product for employee health insurance that uses the power of group purchasing to offer cost-effective rates without red tape and restrictions.
AIMCare will waive the health information typically required on each employee, according to Associated Industries of Missouri, or AIM, the state's leading business-trade association, which unveiled the plan Wednesday.
AIMCare will offer small-business owners the same kind of buying power as large corporations, and allow them to provide employees with affordable health insurance, said AIM President Gary Marble.
The plan is open to all Missouri employers with at least two employees. The insurance carrier is American Community Mutual Insurance Co. of Livonia, Mich., which has been in business since 1938.
AIMCare's initial rates will not be based on the health of an individual employee, but will be based on age, gender, resident address, marital status, network chosen, workplace industry and plan design, Marble said.
Under traditional group health plans, an agent or insurance carrier offers a rate or set of benefits and requires detailed health status statements on each employee, said Darren Coffman, owner of Benefits Unlimited in Springfield. The firm will be the insurance writer for AIMCare.
Then underwriters often return with higher price quotes, saying the company needs more money to support the risk level, Coffman said.
"For once, because of the large group (all AIMCare-covered lives), we will show employers a set of rates based on their employees, and that will be the rate they will get and expect," Coffman said.
Through a premium refund program, employers can get up to 5 percent of their premiums returned, based upon the experience of the entire program.
AIMCare will also use online technology to simplify the process.
Employers interested in purchasing insurance can go to www.aimcareon line.com. After answering a series of questions they will receive a quote on the cost of health-care insurance. Employers can then apply online, receive benefits and subscribe to services online, said Marvin Hays, president of Street-Smart Solutions, the technology partner in AIMCare. Employers can administer their plan online, and the system will send e-mail reminders when employees are due to begin coverage or cease coverage.
"This is a great plan for small-business owners," Marble said. "To the person, this is the No. 1 issue."
The Employee Benefit Research Institute says that due to the rising cost of health care in 2003, roughly 60 percent of America's 44.7 million uninsured people were employed. About half of the 26.6 million people working without health insurance were employed at companies with fewer than 24 employees.
In the greater Springfield area, 84.9 percent of businesses have fewer than 20 employees, according to the U.S. Census Bureau.
Springfield-area employees with AIMCare will be directed to use the St. John's Health System network of services and health care providers through two physician-provider organizations, HealthLink and Private Health Care Systems, Marble said.
Wednesday, September 28, 2005
Online travel insurance quotes for annual multi-trip policies now available at kanetix.ca
from i-Newswire
(I-Newswire) - September 27, 2005 – kanetix ( http://www.kanetix.ca ) is pleased to announce that Canadian travellers can now get instant online travel insurance quotes for annual multi-trip plans through the http://www.kanetix.ca travel insurance quote service.
“kanetix visitors now have the travel insurance options they’ve asked us for,” said Gregory Ellis, co-founder of kanetix. “Whether it is for an individual or family or a single or multi-trip policy, the kanetix travel insurance quote service gives shoppers more choice then they’ve ever had before.”
Available online through kanetix, travel insurance shoppers can get quotes for up to 6 people going away on a single trip or for multiple trips throughout the year. Single trip policies provide coverage for a specific set of days with known departure and return dates. Single trip policies are probably the best-known type of travel insurance coverage, however, if you travel often purchasing an annual multi-trip policy could provide Canadians with significant savings. Multiple-trip policies mean that for one annual rate, you will have travel insurance coverage for every trip you take within the year after the policy is issued. Quotes for annual policies through kanetix are available in 15-day and 30-day periods.
There are also options in the level of coverage available. kanetix visitors can choose from quotes for basic coverage that covers the essentials to one that offers more benefits and options. Visitors can review the highlights of each before purchasing so they are comfortable with the level of coverage they will have before traveling.
(I-Newswire) - September 27, 2005 – kanetix ( http://www.kanetix.ca ) is pleased to announce that Canadian travellers can now get instant online travel insurance quotes for annual multi-trip plans through the http://www.kanetix.ca travel insurance quote service.
“kanetix visitors now have the travel insurance options they’ve asked us for,” said Gregory Ellis, co-founder of kanetix. “Whether it is for an individual or family or a single or multi-trip policy, the kanetix travel insurance quote service gives shoppers more choice then they’ve ever had before.”
Available online through kanetix, travel insurance shoppers can get quotes for up to 6 people going away on a single trip or for multiple trips throughout the year. Single trip policies provide coverage for a specific set of days with known departure and return dates. Single trip policies are probably the best-known type of travel insurance coverage, however, if you travel often purchasing an annual multi-trip policy could provide Canadians with significant savings. Multiple-trip policies mean that for one annual rate, you will have travel insurance coverage for every trip you take within the year after the policy is issued. Quotes for annual policies through kanetix are available in 15-day and 30-day periods.
There are also options in the level of coverage available. kanetix visitors can choose from quotes for basic coverage that covers the essentials to one that offers more benefits and options. Visitors can review the highlights of each before purchasing so they are comfortable with the level of coverage they will have before traveling.
Insurance discount law tossed
Bob Egelko, Chronicle Staff Writer
Wednesday, September 28, 2005
An insurer-backed state law offering discounts to millions of California drivers -- which opponents said would be subsidized by rate increases for largely lower-income motorists -- was overturned Tuesday by a state appeals court.
The Court of Appeal in Los Angeles said the law violated Proposition 103, a consumer-sponsored initiative that voters passed in 1988.
The ruling upheld a judge's decision last year that prevented most insurance companies from implementing the law, SB841, which was carried in Sacramento by state Sen. Don Perata and signed in 2003 by then-Gov. Gray Davis.
Consumer organizations say a few insurers, most of them small, changed their rates before the judge's ruling and have kept their discounts and surcharges in effect during the appeal.
The law allowed insurers to offer discounts to drivers who had maintained insurance with any company for several years. The discounts would not be available to drivers who were previously uninsured or had a lapse in their coverage; those are primarily poor people, immigrants and teenagers, said Insurance Commissioner John Garamendi, who opposed the new law.
Supporters said the measure would make insurance cheaper for good drivers. Opponents said it would result in small discounts for large numbers of drivers and hefty surcharges for the rest, regardless of their driving record.
The appeals court said Prop. 103 required insurance rates to be based primarily on driving records and prohibited insurers from making drivers' lack of past coverage a basis for denying a good-driver discount. SB841 conflicts with the initiative by allowing insurers to impose surcharges on previously uninsured drivers to pay for discounts for other drivers, Justice Madeleine Flier said in the 3-0 ruling.
The ruling rejects "insurers' brazen effort to undo Prop. 103 in Sacramento, which would have led to more uninsured drivers,'' said Harvey Rosenfield, a Los Angeles attorney and author of the 1988 ballot measure.
But Sam Sorich, president of the Association of California Insurance Companies, said the ruling "deprives consumers of the opportunity to qualify for discounts'' and would hurt competition in the auto insurance industry. He said no decision had been made on whether to appeal to the state Supreme Court.
The chief backer of the law, Mercury Insurance Co., contributed $1.2 million to lawmakers from 2001 to 2003 and another $220,000 to Davis. The former governor vetoed the same proposal in 2002 but signed the bill in 2003.
The company gave $25,000 to Perata, D-Oakland, who carried the measure.
Perata was unavailable for comment on the ruling.
Wednesday, September 28, 2005
An insurer-backed state law offering discounts to millions of California drivers -- which opponents said would be subsidized by rate increases for largely lower-income motorists -- was overturned Tuesday by a state appeals court.
The Court of Appeal in Los Angeles said the law violated Proposition 103, a consumer-sponsored initiative that voters passed in 1988.
The ruling upheld a judge's decision last year that prevented most insurance companies from implementing the law, SB841, which was carried in Sacramento by state Sen. Don Perata and signed in 2003 by then-Gov. Gray Davis.
Consumer organizations say a few insurers, most of them small, changed their rates before the judge's ruling and have kept their discounts and surcharges in effect during the appeal.
The law allowed insurers to offer discounts to drivers who had maintained insurance with any company for several years. The discounts would not be available to drivers who were previously uninsured or had a lapse in their coverage; those are primarily poor people, immigrants and teenagers, said Insurance Commissioner John Garamendi, who opposed the new law.
Supporters said the measure would make insurance cheaper for good drivers. Opponents said it would result in small discounts for large numbers of drivers and hefty surcharges for the rest, regardless of their driving record.
The appeals court said Prop. 103 required insurance rates to be based primarily on driving records and prohibited insurers from making drivers' lack of past coverage a basis for denying a good-driver discount. SB841 conflicts with the initiative by allowing insurers to impose surcharges on previously uninsured drivers to pay for discounts for other drivers, Justice Madeleine Flier said in the 3-0 ruling.
The ruling rejects "insurers' brazen effort to undo Prop. 103 in Sacramento, which would have led to more uninsured drivers,'' said Harvey Rosenfield, a Los Angeles attorney and author of the 1988 ballot measure.
But Sam Sorich, president of the Association of California Insurance Companies, said the ruling "deprives consumers of the opportunity to qualify for discounts'' and would hurt competition in the auto insurance industry. He said no decision had been made on whether to appeal to the state Supreme Court.
The chief backer of the law, Mercury Insurance Co., contributed $1.2 million to lawmakers from 2001 to 2003 and another $220,000 to Davis. The former governor vetoed the same proposal in 2002 but signed the bill in 2003.
The company gave $25,000 to Perata, D-Oakland, who carried the measure.
Perata was unavailable for comment on the ruling.
Court strikes down insurance law critics said would hurt poor
By STEVE LAWRENCE, Associated Press Writer
Wednesday, September 28, 2005
09-28) 00:03 PDT SACRAMENTO, (AP) --
A state appeals court has struck down a law that consumer advocates said would result in higher auto insurance rates for many low-income motorists and discourage uninsured drivers from getting coverage.
A three-judge panel of the 2nd District Court of Appeals in Los Angeles ruled Tuesday that the statute violated Proposition 103, the insurance regulation initiative adopted by California voters in 1988.
The law, approved by the Legislature and signed by former Gov. Gray Davis in 2003, allowed auto insurers to give so-called persistency discounts to try to lure longtime customers away from their competitors.
Opponents said that law violated a provision of Proposition 103 that said the absence of prior insurance coverage could not be used as a factor in setting rates and granting discounts, and the appeals court agreed.
Justices Madeline Flier, Candace Cooper and Lawrence Rubin said the law, written by Senate President Pro Tem Don Perata, D-Oakland, was invalid because "it does not further the purposes of, and undermines one of the major purposes of, Proposition 103."
"One of the fundamental purposes of Proposition 103 was the ... promotion of 'fair, available and affordable' automobile insurance so that the previously uninsured could enter the ranks of the insured," the court said.
The justices also said the Perata legislation infringed on the state insurance commissioner's powers to regulate insurance rates.
Consumer groups said that if insurers were allowed to offer discounts to drivers who had maintained insurance with another company it would result in higher rates for motorists, many of them poor, who were seeking to re-establish coverage or were buying insurance for the first time.
"Today's ruling is a victory for California consumers over insurers' brazen effort to undo Proposition 103 in Sacramento, which would have led to more uninsured drivers and made it harder for people who need insurance to get it," said Harvey Rosenfield, the author of Proposition 103 and the founder of the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer group.
Supporters said the Perata legislation would spur competition and help motorists shop around for the lowest insurance rates.
George Joseph, chief executive officer of Mercury General Corp., the main supporter of the Perata bill, said the ruling denied a discount that was "warranted by all of the statistics we have."
"You will find that people who come to you already insured will have less losses than people who come to us who are not insured," he said.
In their ruling, the justices cited a 1998 Department of Insurance study that found that 87 percent of uninsured motorists would qualify for good-driver discounts.
Joseph also said the law furthered one of the purposes of Proposition 103 by encouraging competition among auto insurers.
"We felt this was an issue that was very definitely consumer friendly," he said.
He said he didn't know yet if the ruling would be appealed to the state Supreme Court.
Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights, said the ruling would still allow insurers to offer discounts to their own longtime customers.
Regulations adopted by Insurance Commissioner John Garamendi in 2002 allowed those discounts, but barred insurers from offering persistency discounts to try to attract new clients.
Garamendi was a defendant in the lawsuit because of his role in enforcing insurance laws, but he agreed with the plaintiffs that the law was invalid.
The case is the Foundation for Taxpayer and Consumer Rights v. John Garamendi, B173987.
Wednesday, September 28, 2005
09-28) 00:03 PDT SACRAMENTO, (AP) --
A state appeals court has struck down a law that consumer advocates said would result in higher auto insurance rates for many low-income motorists and discourage uninsured drivers from getting coverage.
A three-judge panel of the 2nd District Court of Appeals in Los Angeles ruled Tuesday that the statute violated Proposition 103, the insurance regulation initiative adopted by California voters in 1988.
The law, approved by the Legislature and signed by former Gov. Gray Davis in 2003, allowed auto insurers to give so-called persistency discounts to try to lure longtime customers away from their competitors.
Opponents said that law violated a provision of Proposition 103 that said the absence of prior insurance coverage could not be used as a factor in setting rates and granting discounts, and the appeals court agreed.
Justices Madeline Flier, Candace Cooper and Lawrence Rubin said the law, written by Senate President Pro Tem Don Perata, D-Oakland, was invalid because "it does not further the purposes of, and undermines one of the major purposes of, Proposition 103."
"One of the fundamental purposes of Proposition 103 was the ... promotion of 'fair, available and affordable' automobile insurance so that the previously uninsured could enter the ranks of the insured," the court said.
The justices also said the Perata legislation infringed on the state insurance commissioner's powers to regulate insurance rates.
Consumer groups said that if insurers were allowed to offer discounts to drivers who had maintained insurance with another company it would result in higher rates for motorists, many of them poor, who were seeking to re-establish coverage or were buying insurance for the first time.
"Today's ruling is a victory for California consumers over insurers' brazen effort to undo Proposition 103 in Sacramento, which would have led to more uninsured drivers and made it harder for people who need insurance to get it," said Harvey Rosenfield, the author of Proposition 103 and the founder of the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer group.
Supporters said the Perata legislation would spur competition and help motorists shop around for the lowest insurance rates.
George Joseph, chief executive officer of Mercury General Corp., the main supporter of the Perata bill, said the ruling denied a discount that was "warranted by all of the statistics we have."
"You will find that people who come to you already insured will have less losses than people who come to us who are not insured," he said.
In their ruling, the justices cited a 1998 Department of Insurance study that found that 87 percent of uninsured motorists would qualify for good-driver discounts.
Joseph also said the law furthered one of the purposes of Proposition 103 by encouraging competition among auto insurers.
"We felt this was an issue that was very definitely consumer friendly," he said.
He said he didn't know yet if the ruling would be appealed to the state Supreme Court.
Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights, said the ruling would still allow insurers to offer discounts to their own longtime customers.
Regulations adopted by Insurance Commissioner John Garamendi in 2002 allowed those discounts, but barred insurers from offering persistency discounts to try to attract new clients.
Garamendi was a defendant in the lawsuit because of his role in enforcing insurance laws, but he agreed with the plaintiffs that the law was invalid.
The case is the Foundation for Taxpayer and Consumer Rights v. John Garamendi, B173987.
Judge rules gay couples can receive health insurance
Tuesday, September 27, 2005
BY DAVID EGGERT
ASSOCIATED PRESS
LANSING - An Ingham County judge ruled Tuesday that Michigan's ban against gay marriage does not prevent public employers from providing health insurance to partners of gay employees.
Ingham County Circuit Judge Joyce Draganchuk said health care benefits are benefits of employment, not marriage.
"Today's ruling affirms what we've believed all along - Michigan voters never intended to take health insurance away from families," said Deborah LaBelle, an attorney for the American Civil Liberties Union of Michigan.
A constitutional amendment approved by voters last year made the union between a man and a woman the only agreement recognized as a marriage "or similar union for any purpose."
Those six words led to debate whether the amendment barred universities and governments from giving benefits to same-sex partners of gay employees.
Republican Attorney General Mike Cox issued a legal opinion in March saying the measure prohibited domestic partner benefits in future contracts. But Draganchuk said the stated purpose of the amendment was to secure and preserve the benefits of marriage.
"Health care benefits are not among the statutory rights or benefits of marriage," the judge wrote. "An individual does not receive health benefits for his or her spouse as a matter of legal right upon getting married."
BY DAVID EGGERT
ASSOCIATED PRESS
LANSING - An Ingham County judge ruled Tuesday that Michigan's ban against gay marriage does not prevent public employers from providing health insurance to partners of gay employees.
Ingham County Circuit Judge Joyce Draganchuk said health care benefits are benefits of employment, not marriage.
"Today's ruling affirms what we've believed all along - Michigan voters never intended to take health insurance away from families," said Deborah LaBelle, an attorney for the American Civil Liberties Union of Michigan.
A constitutional amendment approved by voters last year made the union between a man and a woman the only agreement recognized as a marriage "or similar union for any purpose."
Those six words led to debate whether the amendment barred universities and governments from giving benefits to same-sex partners of gay employees.
Republican Attorney General Mike Cox issued a legal opinion in March saying the measure prohibited domestic partner benefits in future contracts. But Draganchuk said the stated purpose of the amendment was to secure and preserve the benefits of marriage.
"Health care benefits are not among the statutory rights or benefits of marriage," the judge wrote. "An individual does not receive health benefits for his or her spouse as a matter of legal right upon getting married."
Judge OK's HMO Settlements With Doctors
Sep 28, 2005 6:48 am US/Central
MIAMI (AP) A federal judge has approved an estimated $167 million in settlements by two managed health care companies in a massive class action lawsuit by hundreds of thousands of doctors.
U.S. District Court Judge Federico Moreno on Monday signed off on the settlements reached by Health Net Inc. and Prudential Financial Services with about 950,000 doctors nationwide.
The settlements bring the number of agreements approved by Moreno to four in the class action lawsuit by doctors and medical societies against 10 of the nation's largest HMOs.
Under the settlement, Health Net will pay $40 million to active and retired doctors. It will also spend an estimated $80 million to improve its processing of doctors' bill submissions.
Prudential will pay $22.2 million to improve managed care and will ensure that other companies follow through on their settlements.
Health Net will pay $20 million in doctors' attorney fees, and Prudential will pay $5 million.
WellPoint Health Networks Inc. and Anthem Inc., have also reached tentative settlements.
Since the legal actions began in 2000 Prudential has been sold to Aetna and Anthem has merged with WellPoint.
"These latest settlements are significant in the changes that will be made in the treatment and payment to doctors similar to those agreed to by CIGNA and Aetna," said Harley Tropin, a lead attorney for the doctors.
Tropin said the trial is scheduled in January for the four remaining management companies, Coventry Health Care Inc., UnitedHealth Group Inc., Humana Inc. and Pacificare Health Systems Inc., but negotiations to reach settlements are ongoing.
Suits against the 10 HMOs were combined into a single class action lawsuit and assigned by a panel of federal judges to Moreno.
MIAMI (AP) A federal judge has approved an estimated $167 million in settlements by two managed health care companies in a massive class action lawsuit by hundreds of thousands of doctors.
U.S. District Court Judge Federico Moreno on Monday signed off on the settlements reached by Health Net Inc. and Prudential Financial Services with about 950,000 doctors nationwide.
The settlements bring the number of agreements approved by Moreno to four in the class action lawsuit by doctors and medical societies against 10 of the nation's largest HMOs.
Under the settlement, Health Net will pay $40 million to active and retired doctors. It will also spend an estimated $80 million to improve its processing of doctors' bill submissions.
Prudential will pay $22.2 million to improve managed care and will ensure that other companies follow through on their settlements.
Health Net will pay $20 million in doctors' attorney fees, and Prudential will pay $5 million.
WellPoint Health Networks Inc. and Anthem Inc., have also reached tentative settlements.
Since the legal actions began in 2000 Prudential has been sold to Aetna and Anthem has merged with WellPoint.
"These latest settlements are significant in the changes that will be made in the treatment and payment to doctors similar to those agreed to by CIGNA and Aetna," said Harley Tropin, a lead attorney for the doctors.
Tropin said the trial is scheduled in January for the four remaining management companies, Coventry Health Care Inc., UnitedHealth Group Inc., Humana Inc. and Pacificare Health Systems Inc., but negotiations to reach settlements are ongoing.
Suits against the 10 HMOs were combined into a single class action lawsuit and assigned by a panel of federal judges to Moreno.
Tuesday, September 27, 2005
Are Individual Health Plans a Better Option Than Cobra?
Advice by Sarah Rubenstein
SEPTEMBER 27, 2005 (CAREERJOURNAL) - FROM THE WALL STREET JOURNAL ONLINE -- Many people who lose employer health benefits are allowed to pay for their former employers' insurance, generally for up to 18 months after the coverage ends, thanks to a federal law called Cobra. But cheaper policies in the individual insurance marketplace can be tempting. Are they a good idea?
This Out of Pocket column addresses that question. It also answers reader e-mails about health savings accounts and insurance networks. Write to outofpocket@wsj.com with questions about health care costs.
Jill Bergus and her family have relied on Cobra coverage since her husband was laid off in June. At about $1,200 a month, the insurance is "so expensive," writes Bergus, who lives in Dallas. "How do I find a good company for individual health plans? Plus, most of them seem to not cover pregnancy."
One way to scan the offerings is to type your ZIP code into the national online insurance broker eHealthInsurance.com. You can also search for an agent. Three places to look are the National Association of Health Underwriters, Association of Health Insurance Advisors and Independent Insurance Agents and Brokers of America.
Individual plans are often less expensive than Cobra coverage. They're also often less generous. "Cobra is a lot of money, but when you're looking at alternatives in the individual market, you really need to think about what's missing" in the coverage, says Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute.
By law, companies offering a group health plan have to include maternity care. But only about one-third of individual health plans nationwide provide some sort of maternity coverage, and usually at a high premium, according to eHealthInsurance. In many states, only one or two plans include maternity coverage. They usually limit coverage or require waiting periods of up to 12 months.
Some other cautions: In most states, consumers with health problems may be rejected for coverage or required to pay more than the initial price quote. Some plans also may exclude coverage for health conditions that people already have.
That said, plenty of people, especially young and healthy ones, may find an individual plan that satisfies them. But before you stop paying for Cobra (or don't sign up in the first place), make sure you're fully enrolled in an individual plan and that you're comfortable with what it covers. Once you've ruled out out Cobra, you've given up some key protections that could help you get the most comprehensive coverage later on.
Cobra stands for the Consolidated Omnibus Budget Reconciliation Act. For more information, see the Department of Labor's answers to frequently asked questions.
Health savings accounts are a tax-advantaged way to save and pay for many medical expenses. Where there are tax advantages, though, there's often a confusing set of rules.
Matthew McGinty, of Shaker Heights, Ohio, is one consumer who's trying to understand the nitty-gritty. To open an HSA, he must have an HSA-qualified insurance plan with a high deductible: at least $1,000 for single coverage or $2,000 for families.
McGinty wants to know whether, before he's satisfied the deductible, he'd have to pay "retail" prices for doctor and hospital visits or instead could benefit from any discounts his insurer has negotiated.
The latter. Even if you expect to pay for the visit yourself, it normally makes sense to go through the typical process for any insurance plan: The doctor bills your insurer, and your insurer then sends you a letter that explains how much you owe. Your insurer will normally take into account any discounts that you're entitled to.
With HSA plans, "our contracts [with medical providers] are still the same, the administration is still the same," says Aaron Graham, director of product development for McGinty's insurer, Medical Mutual of Ohio.
One problem: It can be tough to find out discounted rates before your appointment. Aetna Inc. recently said it's starting to reveal some of them.
Look at the Treasury Department's Web site to learn about HSAs. Search for insurers offering the plans in your state.
Dave Hargett says his insurance provides coverage for the medical equipment that he needs. The problem: Hargett, of Bolingbrook, Ill., would have to drive at least an hour to get to the closest equipment vendor that's part of his insurance company's network. Going to an out-of-network provider closer to home would mean he'd have to pay for a greater share of the cost himself.
Hargett's question: "Is there a general rule in the insurance field about in-network providers?"
Some states have "network adequacy" laws, which in general require insurers regulated by the states to maintain geographically-accessible networks of doctors, equipment vendors and other medical providers that can address the varied health needs of patients. Generally, if there isn't an in-network provider within a reasonable distance of a patient, the laws require insurers to provide in-network benefits for care from an out-of-network provider who's nearby, or to make other accommodations.
Insurers often have a basic incentive to offer robust networks: They want their products to be competitive with those of their rivals. But patients with problems can contact their state insurance department. Though the issue doesn't crop up as often as other types of insurance problems, "we many times are able to get [insurers] to go ahead and provide the [in-network] benefit," says Kansas Insurance Commissioner Sandy Praeger, vice chair of the health insurance and managed care committee of the National Association of Insurance Commissioners.
Many insurance plans, particularly those offered by large employers, are not regulated by the states. Sometimes state government can still try to help, though, or you may want to ask for help from the employer that's sponsoring your plan, Praeger says.
SEPTEMBER 27, 2005 (CAREERJOURNAL) - FROM THE WALL STREET JOURNAL ONLINE -- Many people who lose employer health benefits are allowed to pay for their former employers' insurance, generally for up to 18 months after the coverage ends, thanks to a federal law called Cobra. But cheaper policies in the individual insurance marketplace can be tempting. Are they a good idea?
This Out of Pocket column addresses that question. It also answers reader e-mails about health savings accounts and insurance networks. Write to outofpocket@wsj.com with questions about health care costs.
Jill Bergus and her family have relied on Cobra coverage since her husband was laid off in June. At about $1,200 a month, the insurance is "so expensive," writes Bergus, who lives in Dallas. "How do I find a good company for individual health plans? Plus, most of them seem to not cover pregnancy."
One way to scan the offerings is to type your ZIP code into the national online insurance broker eHealthInsurance.com. You can also search for an agent. Three places to look are the National Association of Health Underwriters, Association of Health Insurance Advisors and Independent Insurance Agents and Brokers of America.
Individual plans are often less expensive than Cobra coverage. They're also often less generous. "Cobra is a lot of money, but when you're looking at alternatives in the individual market, you really need to think about what's missing" in the coverage, says Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute.
By law, companies offering a group health plan have to include maternity care. But only about one-third of individual health plans nationwide provide some sort of maternity coverage, and usually at a high premium, according to eHealthInsurance. In many states, only one or two plans include maternity coverage. They usually limit coverage or require waiting periods of up to 12 months.
Some other cautions: In most states, consumers with health problems may be rejected for coverage or required to pay more than the initial price quote. Some plans also may exclude coverage for health conditions that people already have.
That said, plenty of people, especially young and healthy ones, may find an individual plan that satisfies them. But before you stop paying for Cobra (or don't sign up in the first place), make sure you're fully enrolled in an individual plan and that you're comfortable with what it covers. Once you've ruled out out Cobra, you've given up some key protections that could help you get the most comprehensive coverage later on.
Cobra stands for the Consolidated Omnibus Budget Reconciliation Act. For more information, see the Department of Labor's answers to frequently asked questions.
Health savings accounts are a tax-advantaged way to save and pay for many medical expenses. Where there are tax advantages, though, there's often a confusing set of rules.
Matthew McGinty, of Shaker Heights, Ohio, is one consumer who's trying to understand the nitty-gritty. To open an HSA, he must have an HSA-qualified insurance plan with a high deductible: at least $1,000 for single coverage or $2,000 for families.
McGinty wants to know whether, before he's satisfied the deductible, he'd have to pay "retail" prices for doctor and hospital visits or instead could benefit from any discounts his insurer has negotiated.
The latter. Even if you expect to pay for the visit yourself, it normally makes sense to go through the typical process for any insurance plan: The doctor bills your insurer, and your insurer then sends you a letter that explains how much you owe. Your insurer will normally take into account any discounts that you're entitled to.
With HSA plans, "our contracts [with medical providers] are still the same, the administration is still the same," says Aaron Graham, director of product development for McGinty's insurer, Medical Mutual of Ohio.
One problem: It can be tough to find out discounted rates before your appointment. Aetna Inc. recently said it's starting to reveal some of them.
Look at the Treasury Department's Web site to learn about HSAs. Search for insurers offering the plans in your state.
Dave Hargett says his insurance provides coverage for the medical equipment that he needs. The problem: Hargett, of Bolingbrook, Ill., would have to drive at least an hour to get to the closest equipment vendor that's part of his insurance company's network. Going to an out-of-network provider closer to home would mean he'd have to pay for a greater share of the cost himself.
Hargett's question: "Is there a general rule in the insurance field about in-network providers?"
Some states have "network adequacy" laws, which in general require insurers regulated by the states to maintain geographically-accessible networks of doctors, equipment vendors and other medical providers that can address the varied health needs of patients. Generally, if there isn't an in-network provider within a reasonable distance of a patient, the laws require insurers to provide in-network benefits for care from an out-of-network provider who's nearby, or to make other accommodations.
Insurers often have a basic incentive to offer robust networks: They want their products to be competitive with those of their rivals. But patients with problems can contact their state insurance department. Though the issue doesn't crop up as often as other types of insurance problems, "we many times are able to get [insurers] to go ahead and provide the [in-network] benefit," says Kansas Insurance Commissioner Sandy Praeger, vice chair of the health insurance and managed care committee of the National Association of Insurance Commissioners.
Many insurance plans, particularly those offered by large employers, are not regulated by the states. Sometimes state government can still try to help, though, or you may want to ask for help from the employer that's sponsoring your plan, Praeger says.
American Family to reduce premiums for state auto insurance customers
American Family Mutual Insurance Co. said Monday it is reducing premiums for Wisconsin auto insurance customers.
Homeowners insurance customers who have remained claims-free for five years or more will also pay less.
Auto insurance premiums will be an average of 6.8 percent less beginning Oct. 6. The company increased its claim-free discount for homeowners by 3 percentage points.
American Family, based in Madison, is the nation’s third-largest mutual property/casualty insurance company.
— Richard Ryman/Press-Gazette
Homeowners insurance customers who have remained claims-free for five years or more will also pay less.
Auto insurance premiums will be an average of 6.8 percent less beginning Oct. 6. The company increased its claim-free discount for homeowners by 3 percentage points.
American Family, based in Madison, is the nation’s third-largest mutual property/casualty insurance company.
— Richard Ryman/Press-Gazette
Auto Insurance Quotes on the Web
PRWeb Press Release
The power of the internet in all areas of our lives continues to grow exponentially, especially in financial areas like car insurance. Since 48 states adopted laws requiring drivers to obtain auto insurance, providers have been seeking easier and more efficient ways to offer auto insurance quotes to potential consumers.
(PRWEB) September 27, 2005 -- According to a statistics reported by Keynote Systems, Inc., the internet is the main source for finding auto insurance quotes today. While over 87 percent of consumers were reported to visit sites with the intention of obtaining a car insurance quote, 58 percent of them reported that they were willing to buy their auto insurance online, too. In fact, Keynote Systems showed in two different reports that auto insurance websites that offered comparative car insurance quotes and resources to potential consumers had a significant advantage over sites and companies that did not.
Yet, some consumers worry about the safety of the web in a world of hackers and computer savvy thieves. However, almost all insurance broker websites are using security encryption to prevent the consumer information from being stolen. It is the same type of encryption that banks and other financial service agencies use. This security has not only made obtaining auto insurance quotes online safer, but also more commonplace.
Why are people looking more to the internet for an auto insurance quote? First, the internet is a great resource for understanding auto insurance and having access to several insurance companies at once. This accessibility offers consumers a way to learn about auto insurance and save money. According to the Insurance Information Institute, it is in a consumer’s best interest to obtain a minimum of three auto insurance quotes to find the best auto insurance rate available. An easy way to obtain these cheap auto insurance quotes is by going to a broker-style website and requesting a quote. These sites also make it more efficient to obtain a quote, as there is usually only one form to fill out, versus going to a number of different company sites or different insurance agents.
Though these sites function as brokers and primarily are there to sell insurance, they also offer a service to the consumer. According to Keynote, Inc., consumers responded more favorably to sites that were not just focused on selling auto insurance, but also offered guides and information to assist them in the process from obtaining an auto insurance quote through the actual purchase of a policy.
Insurance Savings has a number of helpful articles and resources available for people who are shopping for auto insurance and looking to obtain car insurance quotes. Visit Insurance Savings here: auto insurance quote, and find out more about car insurance from how to save to how to understand an auto insurance policy.
The power of the internet in all areas of our lives continues to grow exponentially, especially in financial areas like car insurance. Since 48 states adopted laws requiring drivers to obtain auto insurance, providers have been seeking easier and more efficient ways to offer auto insurance quotes to potential consumers.
(PRWEB) September 27, 2005 -- According to a statistics reported by Keynote Systems, Inc., the internet is the main source for finding auto insurance quotes today. While over 87 percent of consumers were reported to visit sites with the intention of obtaining a car insurance quote, 58 percent of them reported that they were willing to buy their auto insurance online, too. In fact, Keynote Systems showed in two different reports that auto insurance websites that offered comparative car insurance quotes and resources to potential consumers had a significant advantage over sites and companies that did not.
Yet, some consumers worry about the safety of the web in a world of hackers and computer savvy thieves. However, almost all insurance broker websites are using security encryption to prevent the consumer information from being stolen. It is the same type of encryption that banks and other financial service agencies use. This security has not only made obtaining auto insurance quotes online safer, but also more commonplace.
Why are people looking more to the internet for an auto insurance quote? First, the internet is a great resource for understanding auto insurance and having access to several insurance companies at once. This accessibility offers consumers a way to learn about auto insurance and save money. According to the Insurance Information Institute, it is in a consumer’s best interest to obtain a minimum of three auto insurance quotes to find the best auto insurance rate available. An easy way to obtain these cheap auto insurance quotes is by going to a broker-style website and requesting a quote. These sites also make it more efficient to obtain a quote, as there is usually only one form to fill out, versus going to a number of different company sites or different insurance agents.
Though these sites function as brokers and primarily are there to sell insurance, they also offer a service to the consumer. According to Keynote, Inc., consumers responded more favorably to sites that were not just focused on selling auto insurance, but also offered guides and information to assist them in the process from obtaining an auto insurance quote through the actual purchase of a policy.
Insurance Savings has a number of helpful articles and resources available for people who are shopping for auto insurance and looking to obtain car insurance quotes. Visit Insurance Savings here: auto insurance quote, and find out more about car insurance from how to save to how to understand an auto insurance policy.
Auto Insurance Rate Increase in NC
Source: Insurance Journal
September 27, 2005
North Carolina Insurance Commissioner Jim Long opened hearings Monday in Raleigh, N.C. on a request to raise auto insurance rates by 9.6 percent.
The current annual premium for a driver of a 2004 Ford Taurus in Winston-Salem who drives 10 miles to and from work and does not have any insurance points on his record is $875.92, according to the Department of Insurance.
Long, who presides over the hearings, will decide what, if any, rate change is warranted. The North Carolina Rate Bureau, an independent group that represents auto-insurance companies in the state, can appeal Long's decision through the courts.
Companies can raise rates while awaiting the results of its appeal process. But if the bureau loses its appeals, companies must refund the money to policyholders.
Hearings usually take five to six weeks, Chrissy Pearson, an insurance department spokeswoman told the Winston-Salem Journal.
The department said that rate decreases have been ordered by Long in 10 of the past 20 rate requests. In five other years, Long decided on no change in rates.
This year the insurance industry originally requested an 11.5 percent increase, but that was cut to a 9.6 percent increase because of a data error.
Hearings were scheduled because the insurance department and the Rate Bureau were unable to negotiate a settlement on the request.
September 27, 2005
North Carolina Insurance Commissioner Jim Long opened hearings Monday in Raleigh, N.C. on a request to raise auto insurance rates by 9.6 percent.
The current annual premium for a driver of a 2004 Ford Taurus in Winston-Salem who drives 10 miles to and from work and does not have any insurance points on his record is $875.92, according to the Department of Insurance.
Long, who presides over the hearings, will decide what, if any, rate change is warranted. The North Carolina Rate Bureau, an independent group that represents auto-insurance companies in the state, can appeal Long's decision through the courts.
Companies can raise rates while awaiting the results of its appeal process. But if the bureau loses its appeals, companies must refund the money to policyholders.
Hearings usually take five to six weeks, Chrissy Pearson, an insurance department spokeswoman told the Winston-Salem Journal.
The department said that rate decreases have been ordered by Long in 10 of the past 20 rate requests. In five other years, Long decided on no change in rates.
This year the insurance industry originally requested an 11.5 percent increase, but that was cut to a 9.6 percent increase because of a data error.
Hearings were scheduled because the insurance department and the Rate Bureau were unable to negotiate a settlement on the request.
Seperate Health Insurance from jobs
By REGISTER EDITORIAL BOARD
September 27, 2005
Your employer does not buy your groceries for you.
Your employer does not make your house payments for you.
Your employer does not pay your utility bills.
So why in the world is your employer expected to provide your health insurance?
Alone among the industrialized countries, the United States drifted into a cockamamie arrangement in which health insurance is job-based. The glaring flaws with such a system include complexity, confusion and gaps that leave 40 million Americans without insurance.
To those drawbacks add another: The soaring cost of job-based health insurance puts American companies at a disadvantage in global competition.
When U.S. companies move jobs to China or India or Mexico, they don't get just cheaper labor. They escape the steep and rising cost of employee health care. It's not the only reason U.S. manufacturing is threatened, but it's a big factor. If America is going to retain a strong manufacturing base, it must level the playing field.
Manufacturers' tab especially high
A study done for the National Association of Manufacturers looked at the built-in cost disadvantages U.S. companies face in the global marketplace. Employee benefits came in a close second to high corporate tax rates.
The disadvantage is especially felt by manufacturers, which traditionally have offered generous benefits. Health-care costs are one-third higher in manufacturing than in the service sector.
One reason is that venerable U.S. manufacturers pay health-insurance benefits to large numbers of retirees. As they have downsized their work forces, their retiree numbers have increased. Newer, service-sector companies aren't burdened as much by these so-called legacy costs of retired workers.
General Motors says health-care costs for active and retired employees add $1,500 to the price of every car the company makes. That's an expense the foreign competition doesn't have.
Maytag Corp. in Newton is in a similar situation — a mature company that not only provides health benefits to its active work force but also helps retirees with prescription-drug benefits and Medicare supplements. In a message to employees earlier this year, Maytag noted that its worldwide work force decreased about 25 percent (from 24,000 to 18,000) between 2000 and 2004. During the same time, the number of retirees eligible for health benefits increased by 25 percent, to 7,000. Retiree medical benefits cost Maytag $60 million a year and are expected to reach $80 million by 2010. Nationally, it's estimated that more than 9 million retirees get health benefits from their former employers.
Health insurance was a major issue in a 2004 strike at the Newton plant, as it has been in almost every labor dispute in America in recent years.
Universal system offers pluses
The needed action is obvious, if not easy. The cost of health care should be lifted from the shoulders of employers. It should be the responsibility of individuals and taxpayers.
Studies show that a universal, government-sponsored system — similar to those in every other industrialized nation — could cover everyone in America for about the same amount Americans now pay for a disjointed, job-based system. The bonus: It would improve the competitive position of American manufacturers.
The U.S. Department of Commerce last year published a white paper on competitiveness in manufacturing. It recommended attempting to lower health-care costs through measures such as joint purchasing and malpractice tort reform.
Unfortunately, manufacturers' groups and the Commerce Department stop short of advocating comprehensive reform. It is not sufficient to tinker with a dysfunctional health-care system. Joint purchasing isn't enough to get the job done.
The health-care-cost disadvantage borne by American manufacturers will be removed only by abandoning the whole idea of job-based insurance.
And only business has the lobbying clout to make it happen.
Manufacturers and other employers could break the gridlock over health-care reform by weighing in on the side of universal coverage that is not job-based. They need to do so for their own sake, the sake of competitiveness and the sake of the country.
September 27, 2005
Your employer does not buy your groceries for you.
Your employer does not make your house payments for you.
Your employer does not pay your utility bills.
So why in the world is your employer expected to provide your health insurance?
Alone among the industrialized countries, the United States drifted into a cockamamie arrangement in which health insurance is job-based. The glaring flaws with such a system include complexity, confusion and gaps that leave 40 million Americans without insurance.
To those drawbacks add another: The soaring cost of job-based health insurance puts American companies at a disadvantage in global competition.
When U.S. companies move jobs to China or India or Mexico, they don't get just cheaper labor. They escape the steep and rising cost of employee health care. It's not the only reason U.S. manufacturing is threatened, but it's a big factor. If America is going to retain a strong manufacturing base, it must level the playing field.
Manufacturers' tab especially high
A study done for the National Association of Manufacturers looked at the built-in cost disadvantages U.S. companies face in the global marketplace. Employee benefits came in a close second to high corporate tax rates.
The disadvantage is especially felt by manufacturers, which traditionally have offered generous benefits. Health-care costs are one-third higher in manufacturing than in the service sector.
One reason is that venerable U.S. manufacturers pay health-insurance benefits to large numbers of retirees. As they have downsized their work forces, their retiree numbers have increased. Newer, service-sector companies aren't burdened as much by these so-called legacy costs of retired workers.
General Motors says health-care costs for active and retired employees add $1,500 to the price of every car the company makes. That's an expense the foreign competition doesn't have.
Maytag Corp. in Newton is in a similar situation — a mature company that not only provides health benefits to its active work force but also helps retirees with prescription-drug benefits and Medicare supplements. In a message to employees earlier this year, Maytag noted that its worldwide work force decreased about 25 percent (from 24,000 to 18,000) between 2000 and 2004. During the same time, the number of retirees eligible for health benefits increased by 25 percent, to 7,000. Retiree medical benefits cost Maytag $60 million a year and are expected to reach $80 million by 2010. Nationally, it's estimated that more than 9 million retirees get health benefits from their former employers.
Health insurance was a major issue in a 2004 strike at the Newton plant, as it has been in almost every labor dispute in America in recent years.
Universal system offers pluses
The needed action is obvious, if not easy. The cost of health care should be lifted from the shoulders of employers. It should be the responsibility of individuals and taxpayers.
Studies show that a universal, government-sponsored system — similar to those in every other industrialized nation — could cover everyone in America for about the same amount Americans now pay for a disjointed, job-based system. The bonus: It would improve the competitive position of American manufacturers.
The U.S. Department of Commerce last year published a white paper on competitiveness in manufacturing. It recommended attempting to lower health-care costs through measures such as joint purchasing and malpractice tort reform.
Unfortunately, manufacturers' groups and the Commerce Department stop short of advocating comprehensive reform. It is not sufficient to tinker with a dysfunctional health-care system. Joint purchasing isn't enough to get the job done.
The health-care-cost disadvantage borne by American manufacturers will be removed only by abandoning the whole idea of job-based insurance.
And only business has the lobbying clout to make it happen.
Manufacturers and other employers could break the gridlock over health-care reform by weighing in on the side of universal coverage that is not job-based. They need to do so for their own sake, the sake of competitiveness and the sake of the country.
Monday, September 26, 2005
Colorado Democrats Question Claims That Auto Insurance Rates Have Declined
source: Insurance Journal
September 25, 2005
Democrats questioned claims by the auto insurance industry and Colorado state insurance commissioner that rates declined after the state switched from a no-fault system to a tort system, saying 48 of 200 companies have not reduced rates and some even raised them.
Rep. Morgan Carroll, D-Aurora, said Insurance Commissioner David Rivera only looked at 24 insurers when he concluded that consumers who purchased protection against damage to their car paid 24 percent less and 51 percent less if they had a minimum, liability only policy under the new tort system.
Rivera said the figures were "weighted" to reflect larger companies that represented more than 50 percent of the Colorado market.
Carroll, who looked at all 200 companies, said 80 carriers filed rate increases after the new system went into effect, and 30 companies hiked their rates just prior to the July 1, 2003 date to switch to the new system. In one case, Federal Insurance Co. applied for a 43.4 percent increase before the new system went into effect, then applied for a 4.5 percent decrease.
"Is that a savings?" Carroll asked Rivera.
A spokeswoman for Federal Insurance did not return a phone call seeking comment.
Rivera said it is difficult to compare the two systems because they don't provide the same coverage. "Not everyone will save money, but many will under the new system," he told lawmakers.
Colorado in 2003 switched from a system in which all drivers were required to have coverage for treatment of any injuries resulting from auto accidents to a system in which just the driver at fault pays. Insurance industry officials said the switch away from the no-fault system has saved Colorado drivers by dropping coverage most didn't need.
Rivera said a person who buys $50,000 in medical coverage and liability under the tort system would pay an average $591.44 a year, compared to $624.89 with personal injury protection and liability under the old system.
He said a person with full coverage would pay $1,238 a year, compared to $1,131.43 under the old system because of higher medical costs.
Rivera said his records show for a liability only policy without medical coverage, the weighted average rate decrease because of the switch was 31 percent, and for full coverage, the average decrease was 21 percent. He said for all policies and all coverage, the average decrease was 20 percent.
September 25, 2005
Democrats questioned claims by the auto insurance industry and Colorado state insurance commissioner that rates declined after the state switched from a no-fault system to a tort system, saying 48 of 200 companies have not reduced rates and some even raised them.
Rep. Morgan Carroll, D-Aurora, said Insurance Commissioner David Rivera only looked at 24 insurers when he concluded that consumers who purchased protection against damage to their car paid 24 percent less and 51 percent less if they had a minimum, liability only policy under the new tort system.
Rivera said the figures were "weighted" to reflect larger companies that represented more than 50 percent of the Colorado market.
Carroll, who looked at all 200 companies, said 80 carriers filed rate increases after the new system went into effect, and 30 companies hiked their rates just prior to the July 1, 2003 date to switch to the new system. In one case, Federal Insurance Co. applied for a 43.4 percent increase before the new system went into effect, then applied for a 4.5 percent decrease.
"Is that a savings?" Carroll asked Rivera.
A spokeswoman for Federal Insurance did not return a phone call seeking comment.
Rivera said it is difficult to compare the two systems because they don't provide the same coverage. "Not everyone will save money, but many will under the new system," he told lawmakers.
Colorado in 2003 switched from a system in which all drivers were required to have coverage for treatment of any injuries resulting from auto accidents to a system in which just the driver at fault pays. Insurance industry officials said the switch away from the no-fault system has saved Colorado drivers by dropping coverage most didn't need.
Rivera said a person who buys $50,000 in medical coverage and liability under the tort system would pay an average $591.44 a year, compared to $624.89 with personal injury protection and liability under the old system.
He said a person with full coverage would pay $1,238 a year, compared to $1,131.43 under the old system because of higher medical costs.
Rivera said his records show for a liability only policy without medical coverage, the weighted average rate decrease because of the switch was 31 percent, and for full coverage, the average decrease was 21 percent. He said for all policies and all coverage, the average decrease was 20 percent.
Coventry Health Care Announces Approval of Medicare Contracts
Press Release from BusinessWire
BETHESDA, Md.--(BUSINESS WIRE)--Sept. 23, 2005--Coventry Health Care, Inc. (NYSE:CVH) announced today that its 2006 Medicare Advantage and Medicare Part D filed products have been approved by the Centers for Medicare and Medicaid Services (CMS).
Medicare Advantage
Coventry, marketed as Advantra(R), will continue to offer Medicare Advantage products in its Western Pennsylvania, West Virginia, St. Louis and Kansas City markets where Coventry currently serves approximately 74,000 members. Coventry will also offer Medicare Advantage products in three new markets introduced in 2005: Iowa, Central Pennsylvania and Wichita, Kansas. Coventry will offer a broad range of HMO and PPO products including $0 premium products that incorporate the Part D drug benefit in all markets.
Medicare Prescription Drug Coverage
Coventry has received approval to offer its Part D Prescription Drug Plans (PDP) in all 34 regions. Coventry also qualified in all 13 regions where it sought to participate in the auto assignment of low income beneficiaries. The PDP plans will be marketed under the brand names of AdvantraRx and First Health(R) Premier and include options with first dollar coverage (no deductible). The AdvantraRx Value product provides affordable monthly premiums ranging from $18.24 to $25.19 depending upon the geographic region where the individual resides. In addition, Advantra Rx Premier plans offer enriched benefits and low co-pay options with monthly premiums ranging from below $30.00 to $50.48, again depending upon the geographical region where the individual resides. Nearly 60,000 of the nation's retail pharmacies are participating with Coventry providing beneficiaries convenient access to prescription medications.
The Part D program, created as part of the government's Medicare Modernization Act of 2003, will take effect January 1, 2006. Coventry will offer Medicare Part D prescription drug plans on a nationwide basis. In accordance with CMS guidelines, Coventry will begin marketing these products beginning October 1, 2005. Products will be underwritten by Coventry Health and Life Insurance Company, First Health Life and Health Insurance Company and Cambridge Life Insurance Company.
Coventry has established partnerships with Medicare Supplement insurance carriers and brokerage channels nationwide to provide Medicare Part D prescription drug products to Medicare beneficiaries. To date, exclusive distribution agreements have been signed with Mutual of Omaha Insurance Company, Conseco Inc. (Conseco Insurance Group and Bankers Life and Casualty Company), Ceres Group, Inc., Continental Life Insurance Company, New Era Life Insurance Company and its affiliates (New Era Life Insurance Company of the Midwest and Philadelphia American Life Insurance Company), and United Teacher Associates Insurance Company (an affiliate of Great American Life Insurance Company).
"These companies have a demonstrated track record of success in distributing products and services to seniors and we are pleased to partner with them to offer prescription drug plans to Medicare beneficiaries," said Dale B. Wolf, Chief Executive Officer of Coventry. "While our ultimate enrollment in our Part D offering through these partnerships is uncertain, these carriers represent more than one million Medicare Supplement policies in force today. Distribution partnerships such as these, along with our other marketing efforts, including other non-exclusive broker distribution arrangements and our previously announced non-exclusive relationship with Rite Aid Corp., should position us well for 2006 and beyond."
Regions in which Coventry is eligible for auto-assignees:
-- Northern New England (New Hampshire, Maine)
-- New York
-- New Jersey
-- Mid-Atlantic States (Maryland, Delaware, District of Columbia)
-- Pennsylvania / West Virginia
-- Virginia
-- South Carolina
-- Alabama / Tennessee
-- Michigan
-- Ohio
-- Indiana / Kentucky
-- Missouri
-- Nevada
This press release may contain forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, relating to future events or future financial performance. Actual performance may be significantly impacted by certain risks and uncertainties, including those described in Coventry's Annual Report on Form 10-K for the year ended December 31, 2004.
BETHESDA, Md.--(BUSINESS WIRE)--Sept. 23, 2005--Coventry Health Care, Inc. (NYSE:CVH) announced today that its 2006 Medicare Advantage and Medicare Part D filed products have been approved by the Centers for Medicare and Medicaid Services (CMS).
Medicare Advantage
Coventry, marketed as Advantra(R), will continue to offer Medicare Advantage products in its Western Pennsylvania, West Virginia, St. Louis and Kansas City markets where Coventry currently serves approximately 74,000 members. Coventry will also offer Medicare Advantage products in three new markets introduced in 2005: Iowa, Central Pennsylvania and Wichita, Kansas. Coventry will offer a broad range of HMO and PPO products including $0 premium products that incorporate the Part D drug benefit in all markets.
Medicare Prescription Drug Coverage
Coventry has received approval to offer its Part D Prescription Drug Plans (PDP) in all 34 regions. Coventry also qualified in all 13 regions where it sought to participate in the auto assignment of low income beneficiaries. The PDP plans will be marketed under the brand names of AdvantraRx and First Health(R) Premier and include options with first dollar coverage (no deductible). The AdvantraRx Value product provides affordable monthly premiums ranging from $18.24 to $25.19 depending upon the geographic region where the individual resides. In addition, Advantra Rx Premier plans offer enriched benefits and low co-pay options with monthly premiums ranging from below $30.00 to $50.48, again depending upon the geographical region where the individual resides. Nearly 60,000 of the nation's retail pharmacies are participating with Coventry providing beneficiaries convenient access to prescription medications.
The Part D program, created as part of the government's Medicare Modernization Act of 2003, will take effect January 1, 2006. Coventry will offer Medicare Part D prescription drug plans on a nationwide basis. In accordance with CMS guidelines, Coventry will begin marketing these products beginning October 1, 2005. Products will be underwritten by Coventry Health and Life Insurance Company, First Health Life and Health Insurance Company and Cambridge Life Insurance Company.
Coventry has established partnerships with Medicare Supplement insurance carriers and brokerage channels nationwide to provide Medicare Part D prescription drug products to Medicare beneficiaries. To date, exclusive distribution agreements have been signed with Mutual of Omaha Insurance Company, Conseco Inc. (Conseco Insurance Group and Bankers Life and Casualty Company), Ceres Group, Inc., Continental Life Insurance Company, New Era Life Insurance Company and its affiliates (New Era Life Insurance Company of the Midwest and Philadelphia American Life Insurance Company), and United Teacher Associates Insurance Company (an affiliate of Great American Life Insurance Company).
"These companies have a demonstrated track record of success in distributing products and services to seniors and we are pleased to partner with them to offer prescription drug plans to Medicare beneficiaries," said Dale B. Wolf, Chief Executive Officer of Coventry. "While our ultimate enrollment in our Part D offering through these partnerships is uncertain, these carriers represent more than one million Medicare Supplement policies in force today. Distribution partnerships such as these, along with our other marketing efforts, including other non-exclusive broker distribution arrangements and our previously announced non-exclusive relationship with Rite Aid Corp., should position us well for 2006 and beyond."
Regions in which Coventry is eligible for auto-assignees:
-- Northern New England (New Hampshire, Maine)
-- New York
-- New Jersey
-- Mid-Atlantic States (Maryland, Delaware, District of Columbia)
-- Pennsylvania / West Virginia
-- Virginia
-- South Carolina
-- Alabama / Tennessee
-- Michigan
-- Ohio
-- Indiana / Kentucky
-- Missouri
-- Nevada
This press release may contain forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, relating to future events or future financial performance. Actual performance may be significantly impacted by certain risks and uncertainties, including those described in Coventry's Annual Report on Form 10-K for the year ended December 31, 2004.
Health Insurance Commissioner examines United HealthCare Finances
PROVIDENCE, R.I. (AP) September 26,2005
Health insurance commissioner Christopher Koller says he will be looking at United HealthCare of New England.
A new report says the company spends 79 cents of every dollar it collects on medical care -- that's less than its two competitors and less than the nationwide average. United says its low medical costs reflect good management.
The report says the company has the highest profit margins of the state's insurers and the most money in reserve.
United insures about 15 percent of the state's population. The state's other two insurers are Neighborhood Health Plan of Rhode Island and Blue Cross and Blue Shield of Rhode Island.
Health insurance commissioner Christopher Koller says he will be looking at United HealthCare of New England.
A new report says the company spends 79 cents of every dollar it collects on medical care -- that's less than its two competitors and less than the nationwide average. United says its low medical costs reflect good management.
The report says the company has the highest profit margins of the state's insurers and the most money in reserve.
United insures about 15 percent of the state's population. The state's other two insurers are Neighborhood Health Plan of Rhode Island and Blue Cross and Blue Shield of Rhode Island.
Friday, September 23, 2005
Austin is hurricane central for Progressive
bizjournals.com
Thursday September 22, 4:36 pm ET
Progressive Corp.'s regional headquarters in Austin is serving as its national hurricane command center.
In response to Hurricane Rita's projected path of destruction along the Texas coast, Progressive (NYSE: PGR - News) is dispatching claims representatives from around the country to areas that are most likely to be affected by the storm.
Progressive has 1,167 employees at the Austin regional center, with more than 200 devoted to claims associated with Hurricane Katrina, company spokesman William Perry says. The number of employees working on hurricane claims will grow after Rita, he says.
More than 420 Progressive claims representatives are in areas affected by Hurricane Katrina, he says, and others are awaiting "a determination of who we need [and] where" after Rita hits the Texas coast.
"Hurricane Rita presents a particular challenge, given the massive response still under way in the Gulf Coast region following Katrina," says Scott Snapp, national catastrophe response director for Progressive, based in Mayfield Village, Ohio.
"We've already settled about 30 percent of our Katrina-related claims, and we are prepared to deploy as many additional claims representatives as it takes to make sure all our customers' claims are settled quickly and fairly."
Progressive, the fourth largest auto insurer in Texas, operates 28 claims offices across the state and a 220,000-square-foot regional headquarters at Met Center in Southeast Austin.
The Insurance Council of Texas says other insurance companies have begun to mobilize their catastrophe teams to prepare for Hurricane Rita as well.
Council spokesman Mark Hanna says it's too early to tell just where Hurricane Rita will hit, but with Category 4 winds, damage won't be limited to the Texas coast.
"Winds in excess of 100 miles an hour could easily strike Houston and could be felt as far away as San Antonio and Austin," says Hanna.
"Add to that the distinct possibility of tornadoes and flooding, and insurers have the potential to face tens of thousands of claims."
The last major hurricane to strike the Texas coast was Hurricane Alicia, which killed 21 people in 1983, destroyed homes and businesses from Galveston to Houston, and caused $675 million in insured losses.
Tropical Storm Allison in 2001 remains the state's most costly weather catastrophe, dumping more than 2 feet of rain on Houston and flooding key parts of the city. Allison's insured losses reached $3.5 billion.
Thursday September 22, 4:36 pm ET
Progressive Corp.'s regional headquarters in Austin is serving as its national hurricane command center.
In response to Hurricane Rita's projected path of destruction along the Texas coast, Progressive (NYSE: PGR - News) is dispatching claims representatives from around the country to areas that are most likely to be affected by the storm.
Progressive has 1,167 employees at the Austin regional center, with more than 200 devoted to claims associated with Hurricane Katrina, company spokesman William Perry says. The number of employees working on hurricane claims will grow after Rita, he says.
More than 420 Progressive claims representatives are in areas affected by Hurricane Katrina, he says, and others are awaiting "a determination of who we need [and] where" after Rita hits the Texas coast.
"Hurricane Rita presents a particular challenge, given the massive response still under way in the Gulf Coast region following Katrina," says Scott Snapp, national catastrophe response director for Progressive, based in Mayfield Village, Ohio.
"We've already settled about 30 percent of our Katrina-related claims, and we are prepared to deploy as many additional claims representatives as it takes to make sure all our customers' claims are settled quickly and fairly."
Progressive, the fourth largest auto insurer in Texas, operates 28 claims offices across the state and a 220,000-square-foot regional headquarters at Met Center in Southeast Austin.
The Insurance Council of Texas says other insurance companies have begun to mobilize their catastrophe teams to prepare for Hurricane Rita as well.
Council spokesman Mark Hanna says it's too early to tell just where Hurricane Rita will hit, but with Category 4 winds, damage won't be limited to the Texas coast.
"Winds in excess of 100 miles an hour could easily strike Houston and could be felt as far away as San Antonio and Austin," says Hanna.
"Add to that the distinct possibility of tornadoes and flooding, and insurers have the potential to face tens of thousands of claims."
The last major hurricane to strike the Texas coast was Hurricane Alicia, which killed 21 people in 1983, destroyed homes and businesses from Galveston to Houston, and caused $675 million in insured losses.
Tropical Storm Allison in 2001 remains the state's most costly weather catastrophe, dumping more than 2 feet of rain on Houston and flooding key parts of the city. Allison's insured losses reached $3.5 billion.
Americans Prefer Employer- Selected Health Coverage
By Karen Pallarito
HealthDay Reporter
THURSDAY, Sept. 22 (HealthDay News) -- Americans would much rather choose a health insurance plan from a set of options their employers select than to be given an employer-funded account to purchase their own plan, a new study shows.
Two-thirds of adults surveyed preferred having employers choose health plan options, with majorities of both Democrats and Republicans supporting that approach.
The study, released Thursday by the Commonwealth Fund, also revealed that people care more about being able to choose their own doctors than having a choice of health plans.
"What we're finding is that whatever way you cut it, it looks like the type of choices that people prefer are about health-care providers, not about health-care plans, and they're not so eager to abandon the employer-based system," said study author Jeanne M. Lambrew, associate professor of health policy at George Washington University in Washington, D.C.
The findings call into question whether policymakers ought to be pushing health savings accounts as a way to reduce health costs and give people more control over how they spend their health-care dollars. Lambrew's analysis suggests it may not be what most people want.
"We saw a public backlash against very closed HMOs in the 1990s," she recalled. "We may see a similar backlash against these types of policies given the fact that people may not want them, and they prefer a type of system in which we still have employers involved in making these decisions."
Greg Scandlen, founder of a newly formed grassroots lobbying organization called Consumers for Health Care Choices, argued that this interpretation is flawed. "This is looking at things the way politicians look at things," he said. "They're looking for 50-plus percent support of an idea, which is not the way markets work."
This survey found that one-third of the people prefer choosing their own health plans, he added, "and one-third of the market is huge."
Currently, more than 1 million Americans receive health care through a high-deductible plan paired with a health savings account, or HSA, according to a study by America's Health Insurance Plans.
An HSA is a relatively new type of investment account. It gives people a tax-free way to save for medical expenses. Contributions to the HSA may be carried over year-to-year to pay for future medical care. Or, the account holder may withdraw funds as needed to cover current expenses, including doctor and hospital bills, prescription drugs and over-the-counter medications.
President Bush has endorsed HSAs as a way of reigning in the rising cost of health care in the United States. But critics of this approach worry that it will erode the current employer-based system of health insurance.
Using data from the Commonwealth Fund's own biennial health insurance survey, Lambrew examined whether people really want more choice and control over their health plan options, as HSA proponents insist. The survey captures data from a nationally representative sample of 3,293 working-age adults.
The data suggest people value provider choice more highly than health plan choice. About 12 percent of those with only one health plan -- offering, in other words, no other choice of plan -- were likely to be dissatisfied with their health care. On the other hand, the dissatisfaction rate was more than twice as great (26 percent) among those individuals given no choice as to which provider to go to for their care.
Additionally, 67 percent of people who had no choice of where to go for their care indicated that a choice of health plans is very important. That compares with 55 of those given lots of provider choices by their plan. In contrast, just 37 percent of people restricted to one choice of health plan deemed having multiple health plan choices as very important.
"So, ironically, the people with no choice of plan didn't really feel like it was a problem," Lambrew said. "But the people who have very limited choice of doctors did feel like if they could just have more choices, they could get out of this box."
Based on these new findings, Lambrew urged policymakers to "think twice" about moving away from the traditional employer-based system.
Scandlen, however, doesn't think policymakers should bet on any single approach. "I don't think everyone should be in an HSA plan," he said. "Some people prefer HMOs, and they should be able to do that, too."
HealthDay Reporter
THURSDAY, Sept. 22 (HealthDay News) -- Americans would much rather choose a health insurance plan from a set of options their employers select than to be given an employer-funded account to purchase their own plan, a new study shows.
Two-thirds of adults surveyed preferred having employers choose health plan options, with majorities of both Democrats and Republicans supporting that approach.
The study, released Thursday by the Commonwealth Fund, also revealed that people care more about being able to choose their own doctors than having a choice of health plans.
"What we're finding is that whatever way you cut it, it looks like the type of choices that people prefer are about health-care providers, not about health-care plans, and they're not so eager to abandon the employer-based system," said study author Jeanne M. Lambrew, associate professor of health policy at George Washington University in Washington, D.C.
The findings call into question whether policymakers ought to be pushing health savings accounts as a way to reduce health costs and give people more control over how they spend their health-care dollars. Lambrew's analysis suggests it may not be what most people want.
"We saw a public backlash against very closed HMOs in the 1990s," she recalled. "We may see a similar backlash against these types of policies given the fact that people may not want them, and they prefer a type of system in which we still have employers involved in making these decisions."
Greg Scandlen, founder of a newly formed grassroots lobbying organization called Consumers for Health Care Choices, argued that this interpretation is flawed. "This is looking at things the way politicians look at things," he said. "They're looking for 50-plus percent support of an idea, which is not the way markets work."
This survey found that one-third of the people prefer choosing their own health plans, he added, "and one-third of the market is huge."
Currently, more than 1 million Americans receive health care through a high-deductible plan paired with a health savings account, or HSA, according to a study by America's Health Insurance Plans.
An HSA is a relatively new type of investment account. It gives people a tax-free way to save for medical expenses. Contributions to the HSA may be carried over year-to-year to pay for future medical care. Or, the account holder may withdraw funds as needed to cover current expenses, including doctor and hospital bills, prescription drugs and over-the-counter medications.
President Bush has endorsed HSAs as a way of reigning in the rising cost of health care in the United States. But critics of this approach worry that it will erode the current employer-based system of health insurance.
Using data from the Commonwealth Fund's own biennial health insurance survey, Lambrew examined whether people really want more choice and control over their health plan options, as HSA proponents insist. The survey captures data from a nationally representative sample of 3,293 working-age adults.
The data suggest people value provider choice more highly than health plan choice. About 12 percent of those with only one health plan -- offering, in other words, no other choice of plan -- were likely to be dissatisfied with their health care. On the other hand, the dissatisfaction rate was more than twice as great (26 percent) among those individuals given no choice as to which provider to go to for their care.
Additionally, 67 percent of people who had no choice of where to go for their care indicated that a choice of health plans is very important. That compares with 55 of those given lots of provider choices by their plan. In contrast, just 37 percent of people restricted to one choice of health plan deemed having multiple health plan choices as very important.
"So, ironically, the people with no choice of plan didn't really feel like it was a problem," Lambrew said. "But the people who have very limited choice of doctors did feel like if they could just have more choices, they could get out of this box."
Based on these new findings, Lambrew urged policymakers to "think twice" about moving away from the traditional employer-based system.
Scandlen, however, doesn't think policymakers should bet on any single approach. "I don't think everyone should be in an HSA plan," he said. "Some people prefer HMOs, and they should be able to do that, too."
Fort Madison Daily Democrat: News Column
By Christopher Marcisz, Berkshire Eagle Staff
Friday, September 23
ADAMS — The Selectmen voted Wednesday to delay a decision on whether to continue offering an expensive health insurance plan to town employees and retirees until more information about the sole person still on the plan can be obtained.
The measure came from a proposal by
Town Administrator William Ketcham to discontinue offering the Master Health Plus health insurance plan. The town offers five different plans through the Berkshire Health Group.
In a letter to the town's two unions last month, he notified them of his plan to eliminate the options because it is considerably more expensive than the next highest plan.
"It is my understanding that enrollment in Master Health Plus has continually declined due to its expense and the availability of equal coverage at less cost," Ketcham wrote.
On Wednesday, Ketcham told the board that no town employees are enrolled. However, one retiree is still on the plan.
Selectman Edward J. Driscoll raised the concern that there may be some reason why that individual needs the plan. "I'd hate to leave someone out in the cold," he said.
Selectman Edward MacDonald asked if there was a way to simply not allow anyone else into the plan, but Ketcham said the town's attorney said that would not be legal.
Any changes in the health care offerings would not take effect until the next open enrollment period, which is in May. The board agreed to table a final decision until more information was available.
Friday, September 23
ADAMS — The Selectmen voted Wednesday to delay a decision on whether to continue offering an expensive health insurance plan to town employees and retirees until more information about the sole person still on the plan can be obtained.
The measure came from a proposal by
Town Administrator William Ketcham to discontinue offering the Master Health Plus health insurance plan. The town offers five different plans through the Berkshire Health Group.
In a letter to the town's two unions last month, he notified them of his plan to eliminate the options because it is considerably more expensive than the next highest plan.
"It is my understanding that enrollment in Master Health Plus has continually declined due to its expense and the availability of equal coverage at less cost," Ketcham wrote.
On Wednesday, Ketcham told the board that no town employees are enrolled. However, one retiree is still on the plan.
Selectman Edward J. Driscoll raised the concern that there may be some reason why that individual needs the plan. "I'd hate to leave someone out in the cold," he said.
Selectman Edward MacDonald asked if there was a way to simply not allow anyone else into the plan, but Ketcham said the town's attorney said that would not be legal.
Any changes in the health care offerings would not take effect until the next open enrollment period, which is in May. The board agreed to table a final decision until more information was available.
Thursday, September 22, 2005
Mercury Insurance Group Is Prepared to Help Hurricane Rita Victims
Mercury Insurance Group Toll-Free Claims Hotline: 800-503-3724
AUSTIN, Texas, Sept. 22 /PRNewswire/ -- As Hurricane Rita strengthens
across the Gulf of Mexico and moves toward the Texas shoreline, Mercury
Insurance Group emergency response teams have mobilized to support its auto
insurance policyholders with claims resulting from Hurricane Rita. The
response teams are now in place and prepared to immediately deploy to impacted
areas as soon as allowed by Texas officials.
Mercury staff appraisers will begin canvassing damaged areas in easily
identifiable claims response vehicles, literally making house calls and -- as
necessary -- issuing checks to its impacted policyholders, according to
Richard L. McCathron, Vice President Western Region of Mercury General Corp.
Mercury policyholders with questions regarding their coverage for damage
caused by Hurricane Rita should call Mercury's toll-free claims hotline,
800-503-3724.
AUSTIN, Texas, Sept. 22 /PRNewswire/ -- As Hurricane Rita strengthens
across the Gulf of Mexico and moves toward the Texas shoreline, Mercury
Insurance Group emergency response teams have mobilized to support its auto
insurance policyholders with claims resulting from Hurricane Rita. The
response teams are now in place and prepared to immediately deploy to impacted
areas as soon as allowed by Texas officials.
Mercury staff appraisers will begin canvassing damaged areas in easily
identifiable claims response vehicles, literally making house calls and -- as
necessary -- issuing checks to its impacted policyholders, according to
Richard L. McCathron, Vice President Western Region of Mercury General Corp.
Mercury policyholders with questions regarding their coverage for damage
caused by Hurricane Rita should call Mercury's toll-free claims hotline,
800-503-3724.
A.M. Best Assigns Rating to Travelers Auto Insurance Co. of New Jersey
Press Release
OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 22, 2005--A.M. Best Co. has assigned a financial strength rating (FSR) of A (Excellent) and an issuer credit rating (ICR) of "a" to Travelers Auto Insurance Co. of New Jersey (TAIC-NJ), which is a wholly owned reinsured subsidiary of First Trenton Indemnity Company (First Trenton Indemnity). TAIC-NJ and First Trenton Indemnity are members of First Trenton Group, and both First Trenton Indemnity and First Trenton Group have a FSR of A (Excellent) and ICRs of "a". All companies listed above are domiciled in Marlton, NJ. All ratings have a stable rating outlook.
Prior to this rating action, TAIC-NJ (formerly Red Oak Insurance Company) was inactive and assigned an A.M. Best rating of NR-3 (Rating Procedure Inapplicable). Commensurate with this rating, TAIC-NJ will enter into a 100% quota share reinsurance agreement with First Trenton Indemnity, effective September 18, 2005, whereby TAIC-NJ cedes 100% of its business to First Trenton Indemnity. This agreement supplements an existing reinsurance and administration agreement between the two companies, which has been effective since March 31, 2001.
Because it is a reinsured subsidiary of First Trenton Indemnity, TAIC-NJ's rating also reflects First Trenton Indemnity's excellent historical underwriting and operating results, solid overall capitalization and TAIC-NJ's role within the First Trenton Group, which replaces First Trenton Indemnity as the insurer of all new private passenger auto business written in New Jersey. First Trenton Indemnity will no longer write any new auto business but will continue to renew its existing portfolio of New Jersey auto business, as well as write all new and renewal property business. Both companies are part of The St. Paul Travelers Companies,
OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 22, 2005--A.M. Best Co. has assigned a financial strength rating (FSR) of A (Excellent) and an issuer credit rating (ICR) of "a" to Travelers Auto Insurance Co. of New Jersey (TAIC-NJ), which is a wholly owned reinsured subsidiary of First Trenton Indemnity Company (First Trenton Indemnity). TAIC-NJ and First Trenton Indemnity are members of First Trenton Group, and both First Trenton Indemnity and First Trenton Group have a FSR of A (Excellent) and ICRs of "a". All companies listed above are domiciled in Marlton, NJ. All ratings have a stable rating outlook.
Prior to this rating action, TAIC-NJ (formerly Red Oak Insurance Company) was inactive and assigned an A.M. Best rating of NR-3 (Rating Procedure Inapplicable). Commensurate with this rating, TAIC-NJ will enter into a 100% quota share reinsurance agreement with First Trenton Indemnity, effective September 18, 2005, whereby TAIC-NJ cedes 100% of its business to First Trenton Indemnity. This agreement supplements an existing reinsurance and administration agreement between the two companies, which has been effective since March 31, 2001.
Because it is a reinsured subsidiary of First Trenton Indemnity, TAIC-NJ's rating also reflects First Trenton Indemnity's excellent historical underwriting and operating results, solid overall capitalization and TAIC-NJ's role within the First Trenton Group, which replaces First Trenton Indemnity as the insurer of all new private passenger auto business written in New Jersey. First Trenton Indemnity will no longer write any new auto business but will continue to renew its existing portfolio of New Jersey auto business, as well as write all new and renewal property business. Both companies are part of The St. Paul Travelers Companies,
Progressive Moves Resources into Texas Ahead of Hurricane Rita: Financial News - Yahoo! Finance
As Rita Bears Down on the Lone Star State, Nation's Third Largest Auto Insurance Group Staffs to Ensure Prompt Response
Offers Pre-Storm Tips for Drivers
AUSTIN, Texas--(BUSINESS WIRE)--Sept. 21, 2005--Hurricane Rita is expected to strike the Texas coast this weekend, potentially bringing heavy rain, inland flooding and high winds. Reacting quickly to this new threat, the Progressive Group of Insurance Companies (NYSE:PGR - News) is deploying claims representatives from around the country to areas that are most likely to be affected by the storm.
"Hurricane Rita presents a particular challenge given the massive response still underway in the Gulf Coast region following Katrina," said Scott Snapp, national catastrophe response director, Progressive. "We've already settled about 30 percent of our Katrina-related claims and we are prepared to deploy as many additional claims representatives as it takes to make sure all our customers' claims are settled quickly and fairly."
Progressive, the fourth largest auto insurance provider in Texas, has 28 claims offices across the state and a 220,000-square foot regional headquarters in Austin that is serving as the company's Hurricane Command Center.
As with any hurricane, Rita's potential for inland flooding is especially dangerous. According to the National Hurricane Center, more than half of all hurricane-related deaths in the past 30 years were due to inland flooding and one quarter of those drowned inside their vehicle or while attempting to abandon it.
Progressive offers the following tips for protecting your car, recreational vehicle or boat as Hurricane Rita approaches:
If you are leaving a car or recreational vehicle behind to weather
the storm:
-- Park the car or recreational vehicle on high ground, as close
as possible to a sturdy building; don't leave the vehicle in a
low-lying area prone to flooding. If you have to park it
outdoors, park it away from trees, poles or other large
objects that may fall onto it.
-- Boats should be moved inland if possible. Make sure you have
everything you need to secure your boat, including extra
lines, chafe protection, fenders, anchors, port plugs, duct
tape and extra batteries.
If you are evacuating the area with your car or recreational vehicle:
-- Avoid driving through standing water. The average automobile
can be swept off the road in as little as 12 inches of moving
water, and roads covered by water are prone to collapse. If
you come upon a flooded street, take an alternate route.
-- If no alternate route exists and you have no other reasonable
alternative but to drive through standing water...
-- Do your best to estimate the depth of the water (if other
cars are driving through, take note of how deep the
water is).
-- Drive SLOWLY and STEADILY through the water.
-- Once you and your vehicle are out of deep water and are in
a safe area, depress your brakes slowly to dry them.
-- If your vehicle stalls in the deep water, you may need to
restart the engine to make it to safety (know, however,
that restarting may cause irreparable damage to the
engine).
-- If you can't restart your vehicle and you become trapped
in rising water, IMMEDIATELY ABANDON FOR HIGHER GROUND.
If you are unable to get out of the vehicle safely, call
911 or get the attention of a passerby or someone standing
on higher ground.
Offers Pre-Storm Tips for Drivers
AUSTIN, Texas--(BUSINESS WIRE)--Sept. 21, 2005--Hurricane Rita is expected to strike the Texas coast this weekend, potentially bringing heavy rain, inland flooding and high winds. Reacting quickly to this new threat, the Progressive Group of Insurance Companies (NYSE:PGR - News) is deploying claims representatives from around the country to areas that are most likely to be affected by the storm.
"Hurricane Rita presents a particular challenge given the massive response still underway in the Gulf Coast region following Katrina," said Scott Snapp, national catastrophe response director, Progressive. "We've already settled about 30 percent of our Katrina-related claims and we are prepared to deploy as many additional claims representatives as it takes to make sure all our customers' claims are settled quickly and fairly."
Progressive, the fourth largest auto insurance provider in Texas, has 28 claims offices across the state and a 220,000-square foot regional headquarters in Austin that is serving as the company's Hurricane Command Center.
As with any hurricane, Rita's potential for inland flooding is especially dangerous. According to the National Hurricane Center, more than half of all hurricane-related deaths in the past 30 years were due to inland flooding and one quarter of those drowned inside their vehicle or while attempting to abandon it.
Progressive offers the following tips for protecting your car, recreational vehicle or boat as Hurricane Rita approaches:
If you are leaving a car or recreational vehicle behind to weather
the storm:
-- Park the car or recreational vehicle on high ground, as close
as possible to a sturdy building; don't leave the vehicle in a
low-lying area prone to flooding. If you have to park it
outdoors, park it away from trees, poles or other large
objects that may fall onto it.
-- Boats should be moved inland if possible. Make sure you have
everything you need to secure your boat, including extra
lines, chafe protection, fenders, anchors, port plugs, duct
tape and extra batteries.
If you are evacuating the area with your car or recreational vehicle:
-- Avoid driving through standing water. The average automobile
can be swept off the road in as little as 12 inches of moving
water, and roads covered by water are prone to collapse. If
you come upon a flooded street, take an alternate route.
-- If no alternate route exists and you have no other reasonable
alternative but to drive through standing water...
-- Do your best to estimate the depth of the water (if other
cars are driving through, take note of how deep the
water is).
-- Drive SLOWLY and STEADILY through the water.
-- Once you and your vehicle are out of deep water and are in
a safe area, depress your brakes slowly to dry them.
-- If your vehicle stalls in the deep water, you may need to
restart the engine to make it to safety (know, however,
that restarting may cause irreparable damage to the
engine).
-- If you can't restart your vehicle and you become trapped
in rising water, IMMEDIATELY ABANDON FOR HIGHER GROUND.
If you are unable to get out of the vehicle safely, call
911 or get the attention of a passerby or someone standing
on higher ground.
Auto Insurance Savings in Doubt
Lawmaker's analysis shows tort system hasn't delivered
By John Accola, Rocky Mountain News
September 22, 2005
A double-digit price reduction promised by Colorado auto insurers two years ago never materialized, with 80 out of 200 carriers filing for rate increases after the state dropped its no-fault law.
An analysis presented Wednesday by Rep. Morgan Carroll, D-Aurora, found 24 percent of insurers made no reductions since the switch to a tort system.
Overall, Carroll said, rates dropped about 4 percent - not the 15 percent to 30 percent price break touted to Colorado lawmakers who voted to change the state from a no-fault to a presumably lower-cost tort insurance system.
"The bottom line . . . something is funky if your rates weren't reduced by at least 15 percent," Carroll said following a committee meeting with Colorado Insurance Commissioner David Rivera.
The July 2003 switch meant drivers no longer had to carry additional medical insurance, effectively dropping more than $100,000 in coverage for medical treatment and rehabilitation. Under a tort system, the at-fault driver's insurer pays for treatment of car accident injuries.
Carroll, a member of the legislative committee reviewing auto insurance, had asked Rivera to conduct the broad-based rate study. Although Rivera declined, his office provided Carroll with the raw data.
She began her number crunching several weekends ago in hopes of persuading the commissioner to investigate insurance carriers who failed to reduce their insurance prices or used what she called "accounting tricks" to feign reductions.
"An investigation can be something as simple as a phone call," Carroll said. "The public has a right to know."
Among her findings were 30 carriers that increased rates just before the July 1, 2003, switch and later filed for slight decreases.
Federal Insurance Co. and Great Northern Insurance Co., for example, both applied for 43.4 percent premium increases just before the new system went into effect, then applied for 4.5 percent reductions.
"Is that a savings?" Carroll asked Rivera.
Rivera, however, stood by the rosier findings of a previously released insurance division study indicating premiums have dropped significantly.
That study, while limited to just 24 insurers, represents more than 50 percent of the Colorado market, he said. The study convinced the division that on average, consumers are saving between 15 percent and 27 percent.
In addition, Rivera said his office reviewed and rejected rate requests of some insurers, resulting in $3.6 million worth of reduced premiums to Colorado consumers.
"Not everyone will save money, but many will, under the new system," he said.
In the competitive marketplace, consumers can freely pick and choose their insurers, and Rivera urged them to do their homework.
"We encourage consumers to speak with their insurance agent to find the best deal possible," he said.
Insurance division spokesman Geoff Hier said the division isn't disputing the figures in Carroll's study.
"There's just a difference in methodology," he said. "I'm saying we rely on the research done by actuaries who are trained and educated in insurance analysis."
Carroll, a public interest attorney, said she relied on a home computer and an Excel software program to complete her rate study. She criticized the narrower insurance division study for "cherry picking" insurance carriers and conducting an exercise in "managed data."
"Clearly there are a lot of carriers that did what they said they would do," she said. "But why are there so many insurance companies that didn't reduce anything, not one dime? What is going on?"
Rivera contends investigating companies that haven't cut rates by at least 15 percent would be a waste of the division's resources.
Unlike in some states, when a carrier files for a rate increase in Colorado, the division must conduct a "diligent upfront review," Hier said.
"It's reviewed to make sure it's not inadequate, excessive or discriminatory," Hier said. "One of the things we don't want to happen is have an insurance company charging an inadequate premium to get a bigger market share and then not be able to pay the claims when they come in because they aren't collecting enough money."
Promised premium reductions
• 15 percent to 30 percent lower premiums were promised when auto insurance changed from no-fault to tort on July 1, 2003.
• 3.86 percent is the average decrease in rate filings.
• 15 out of 200 insurance carriers met the 15 percent rate decrease without filing rate hikes just before the switch from no-fault to tort on July 1, 2003.
• 61 out of 200 insurance carriers filed rate reductions after the switch.
• But 30 of those 61 carriers had filed rate increases just prior to July 1, 2003.
• 48 out of 200 insurance carriers made no reductions in rate filings after the switch.
• 80 out of 200 insurance carriers filed rate increases after the switch.
By John Accola, Rocky Mountain News
September 22, 2005
A double-digit price reduction promised by Colorado auto insurers two years ago never materialized, with 80 out of 200 carriers filing for rate increases after the state dropped its no-fault law.
An analysis presented Wednesday by Rep. Morgan Carroll, D-Aurora, found 24 percent of insurers made no reductions since the switch to a tort system.
Overall, Carroll said, rates dropped about 4 percent - not the 15 percent to 30 percent price break touted to Colorado lawmakers who voted to change the state from a no-fault to a presumably lower-cost tort insurance system.
"The bottom line . . . something is funky if your rates weren't reduced by at least 15 percent," Carroll said following a committee meeting with Colorado Insurance Commissioner David Rivera.
The July 2003 switch meant drivers no longer had to carry additional medical insurance, effectively dropping more than $100,000 in coverage for medical treatment and rehabilitation. Under a tort system, the at-fault driver's insurer pays for treatment of car accident injuries.
Carroll, a member of the legislative committee reviewing auto insurance, had asked Rivera to conduct the broad-based rate study. Although Rivera declined, his office provided Carroll with the raw data.
She began her number crunching several weekends ago in hopes of persuading the commissioner to investigate insurance carriers who failed to reduce their insurance prices or used what she called "accounting tricks" to feign reductions.
"An investigation can be something as simple as a phone call," Carroll said. "The public has a right to know."
Among her findings were 30 carriers that increased rates just before the July 1, 2003, switch and later filed for slight decreases.
Federal Insurance Co. and Great Northern Insurance Co., for example, both applied for 43.4 percent premium increases just before the new system went into effect, then applied for 4.5 percent reductions.
"Is that a savings?" Carroll asked Rivera.
Rivera, however, stood by the rosier findings of a previously released insurance division study indicating premiums have dropped significantly.
That study, while limited to just 24 insurers, represents more than 50 percent of the Colorado market, he said. The study convinced the division that on average, consumers are saving between 15 percent and 27 percent.
In addition, Rivera said his office reviewed and rejected rate requests of some insurers, resulting in $3.6 million worth of reduced premiums to Colorado consumers.
"Not everyone will save money, but many will, under the new system," he said.
In the competitive marketplace, consumers can freely pick and choose their insurers, and Rivera urged them to do their homework.
"We encourage consumers to speak with their insurance agent to find the best deal possible," he said.
Insurance division spokesman Geoff Hier said the division isn't disputing the figures in Carroll's study.
"There's just a difference in methodology," he said. "I'm saying we rely on the research done by actuaries who are trained and educated in insurance analysis."
Carroll, a public interest attorney, said she relied on a home computer and an Excel software program to complete her rate study. She criticized the narrower insurance division study for "cherry picking" insurance carriers and conducting an exercise in "managed data."
"Clearly there are a lot of carriers that did what they said they would do," she said. "But why are there so many insurance companies that didn't reduce anything, not one dime? What is going on?"
Rivera contends investigating companies that haven't cut rates by at least 15 percent would be a waste of the division's resources.
Unlike in some states, when a carrier files for a rate increase in Colorado, the division must conduct a "diligent upfront review," Hier said.
"It's reviewed to make sure it's not inadequate, excessive or discriminatory," Hier said. "One of the things we don't want to happen is have an insurance company charging an inadequate premium to get a bigger market share and then not be able to pay the claims when they come in because they aren't collecting enough money."
Promised premium reductions
• 15 percent to 30 percent lower premiums were promised when auto insurance changed from no-fault to tort on July 1, 2003.
• 3.86 percent is the average decrease in rate filings.
• 15 out of 200 insurance carriers met the 15 percent rate decrease without filing rate hikes just before the switch from no-fault to tort on July 1, 2003.
• 61 out of 200 insurance carriers filed rate reductions after the switch.
• But 30 of those 61 carriers had filed rate increases just prior to July 1, 2003.
• 48 out of 200 insurance carriers made no reductions in rate filings after the switch.
• 80 out of 200 insurance carriers filed rate increases after the switch.
Wait continues for expanded CHIP benefits
By MIKE DENNISON Missoulian State Bureau
HELENA - When election results came in last November, activist Mary Caferro was ecstatic: Montana voters had sent a clear message to expand health care coverage for those in need, including thousands of children.
Voters approved a $1-per-pack increase in cigarette taxes and a directive to use the new revenue to expand the Children's Health Insurance Program. The state-federal program provides health insurance to kids whose families can't afford it on their own.
Montanans also elected as governor Democrat Brian Schweitzer, who had made expanded health care coverage a key part of his campaign, including expansion of CHIP.
But now, almost a year later, Caferro and others are still waiting for the expansion to take off as promised and provide health insurance for an additional 3,000 children.
"The (Schweitzer administration) could have started the outreach the day the budget was signed to get those kids (on the program)," Caferro said. "That's the plan I would be happy with. There needs to be a true commitment to children getting access to health care."
Since the new funding kicked in this July, 600 kids have been added to the 10,900 children already covered by CHIP.
Caferro, a Democratic state representative from Helena and an organizer for the low-income advocacy group Working for Equality and Economic Liberation, feels that more could be done, both now and earlier.
Surveys have shown that thousands of Montana children are without health insurance, she said, and it's unconscionable to have them go without when the Legislature and voters approved the money to cover 3,000 more kids.
Schweitzer administration officials insist they're committed to solving the plight of uninsured children and families in Montana, and that includes expanding CHIP.
A ramped-up "outreach" plan to get more kids covered by CHIP has been under way since midsummer and should be showing results this fall, they say.
Yet they've also counseled caution, saying they fear the demand might outstrip available money, and they'd have to turn too many people away.
"We're trying to get it right, so we really do fulfill as much need as we can with the money that we have," said David Ewer, the governor's budget director. "If we have to do more, we'll do more. (But) nobody benefits by having huge waiting lists. There is a finite amount of money for it."
This cautious approach is what has frustrated Caferro and other activists, who say the money is clearly available.
CHIP, created in 1999, offers free health insurance to children whose families can't find affordable coverage, for whatever reason. It's open to families whose annual income is no more than 150 percent of the federal poverty level, or about $29,000 for a family of four.
The vast majority of families on CHIP have a parent or parents who work. Their jobs either don't offer insurance or offer insurance that the parents can't afford.
The federal government pays about 80 percent of CHIP costs, up to a certain level, as long as the state provides a 20 percent match.
In past years, Montana didn't always use its entire federal share for CHIP, because the Legislature didn't provide the full matching funds. But with the passage last year of Initiative 149, which increased cigarette taxes, lawmakers voted to expand the CHIP budget by 30 percent, up to $23 million this year - enough to add 3,000 kids to the rolls.
Schweitzer administration officials, however, worried initially about how fast the money from higher tobacco taxes would materialize. Cigarette sales took a big drop the first two months of the new tax in January and February.
They agreed to add the 600 or so kids on a CHIP waiting list when the state fiscal year began in July, but didn't aggressively seek to add more right away.
Since February, tobacco consumption and tax revenue has slowly bounced back, and now are on track to meet projections.
Beth Sirr, a Helena nurse and vocal CHIP supporter, said the time for caution is over and she's not sure it was justified in the first place.
"You've got the money to be helping these kids," she said. "This is almost malpractice, as far as I'm concerned."
State health officials say they are and have been taking steps to get more kids on CHIP, and that its expanded budget has been effective only since July. They've redone the application form, cutting it from 16 pages to four page, and in recent weeks sent out 9,000 forms to county health departments, food banks, child-care resource centers, Head Start centers and other spots statewide.
A Helena nonprofit group, Health Mothers Healthy Babies, also helped send nearly 50,000 pieces of literature home with schoolchildren this year, mentioning CHIP and other available health care programs.
"We've been doing a large push all around the state," said Jackie Forba, chief of the state's Health Care Resources Bureau. "Just because you don't see a huge media campaign doesn't mean we aren't doing outreach. I think it's going to be an incredible difference.
"We all want the money to go for health care for kids."
Caferro said she's glad the state is stepping up the outreach, but thinks it should be more and should have been done earlier.
"Why don't they budget in some media?" she asked. "They could do free public-service announcements with the governor."
Ewer said it's a "delicate balance" deciding how much publicity is enough and affordable, and how to fill up the slots without building up a big waiting list.
"If we went out there with a huge media campaign and didn't have spots available after a few weeks, we'd be over-promising," he said. "I don't want people to become cynical about their government."
Caferro said she doesn't see what's wrong with CHIP waiting lists, which have been a reality for years until funding was expanded for this year. It simply makes economic and social sense to fill up the rolls and pay for kids' health care, bringing in four federal dollars for every state dollar spent, she added.
"If there's kids out there who need health coverage, let them come," she said. "If the problem is out there, don't we want to know about it? As long as we have this big of a crisis of uninsured children, I'm not going to be satisfied."
Sign up for CHIP
The state is expanding the rolls of the Children's Health Insurance Program, which provides free health insurance to kids in families unable to find affordable coverage.
Families may be eligible if they earn up to 150 percent of the federal poverty level. The income threshold is $19,245 for a family of two, $24,135 for a family of three and $29,025 for a family of four.
Here are ways you can inquire about the program and sign up, if you're eligible:
Visit the state's Web site at www.chip.mt.gov, where you can get an application, fill it out and submit it.
Call the state's toll-free CHIP hot line at 1-877-543-7669, or, in Helena, at 444-6971.
Contact Working for Economic Equality and Liberation, a private advocacy group, at 1-888-543-2530. WEEL helps people fill out the four-page application.
Application forms should be available at many Indian/tribal health clinics, food banks, Head Start and county health departments.
HELENA - When election results came in last November, activist Mary Caferro was ecstatic: Montana voters had sent a clear message to expand health care coverage for those in need, including thousands of children.
Voters approved a $1-per-pack increase in cigarette taxes and a directive to use the new revenue to expand the Children's Health Insurance Program. The state-federal program provides health insurance to kids whose families can't afford it on their own.
Montanans also elected as governor Democrat Brian Schweitzer, who had made expanded health care coverage a key part of his campaign, including expansion of CHIP.
But now, almost a year later, Caferro and others are still waiting for the expansion to take off as promised and provide health insurance for an additional 3,000 children.
"The (Schweitzer administration) could have started the outreach the day the budget was signed to get those kids (on the program)," Caferro said. "That's the plan I would be happy with. There needs to be a true commitment to children getting access to health care."
Since the new funding kicked in this July, 600 kids have been added to the 10,900 children already covered by CHIP.
Caferro, a Democratic state representative from Helena and an organizer for the low-income advocacy group Working for Equality and Economic Liberation, feels that more could be done, both now and earlier.
Surveys have shown that thousands of Montana children are without health insurance, she said, and it's unconscionable to have them go without when the Legislature and voters approved the money to cover 3,000 more kids.
Schweitzer administration officials insist they're committed to solving the plight of uninsured children and families in Montana, and that includes expanding CHIP.
A ramped-up "outreach" plan to get more kids covered by CHIP has been under way since midsummer and should be showing results this fall, they say.
Yet they've also counseled caution, saying they fear the demand might outstrip available money, and they'd have to turn too many people away.
"We're trying to get it right, so we really do fulfill as much need as we can with the money that we have," said David Ewer, the governor's budget director. "If we have to do more, we'll do more. (But) nobody benefits by having huge waiting lists. There is a finite amount of money for it."
This cautious approach is what has frustrated Caferro and other activists, who say the money is clearly available.
CHIP, created in 1999, offers free health insurance to children whose families can't find affordable coverage, for whatever reason. It's open to families whose annual income is no more than 150 percent of the federal poverty level, or about $29,000 for a family of four.
The vast majority of families on CHIP have a parent or parents who work. Their jobs either don't offer insurance or offer insurance that the parents can't afford.
The federal government pays about 80 percent of CHIP costs, up to a certain level, as long as the state provides a 20 percent match.
In past years, Montana didn't always use its entire federal share for CHIP, because the Legislature didn't provide the full matching funds. But with the passage last year of Initiative 149, which increased cigarette taxes, lawmakers voted to expand the CHIP budget by 30 percent, up to $23 million this year - enough to add 3,000 kids to the rolls.
Schweitzer administration officials, however, worried initially about how fast the money from higher tobacco taxes would materialize. Cigarette sales took a big drop the first two months of the new tax in January and February.
They agreed to add the 600 or so kids on a CHIP waiting list when the state fiscal year began in July, but didn't aggressively seek to add more right away.
Since February, tobacco consumption and tax revenue has slowly bounced back, and now are on track to meet projections.
Beth Sirr, a Helena nurse and vocal CHIP supporter, said the time for caution is over and she's not sure it was justified in the first place.
"You've got the money to be helping these kids," she said. "This is almost malpractice, as far as I'm concerned."
State health officials say they are and have been taking steps to get more kids on CHIP, and that its expanded budget has been effective only since July. They've redone the application form, cutting it from 16 pages to four page, and in recent weeks sent out 9,000 forms to county health departments, food banks, child-care resource centers, Head Start centers and other spots statewide.
A Helena nonprofit group, Health Mothers Healthy Babies, also helped send nearly 50,000 pieces of literature home with schoolchildren this year, mentioning CHIP and other available health care programs.
"We've been doing a large push all around the state," said Jackie Forba, chief of the state's Health Care Resources Bureau. "Just because you don't see a huge media campaign doesn't mean we aren't doing outreach. I think it's going to be an incredible difference.
"We all want the money to go for health care for kids."
Caferro said she's glad the state is stepping up the outreach, but thinks it should be more and should have been done earlier.
"Why don't they budget in some media?" she asked. "They could do free public-service announcements with the governor."
Ewer said it's a "delicate balance" deciding how much publicity is enough and affordable, and how to fill up the slots without building up a big waiting list.
"If we went out there with a huge media campaign and didn't have spots available after a few weeks, we'd be over-promising," he said. "I don't want people to become cynical about their government."
Caferro said she doesn't see what's wrong with CHIP waiting lists, which have been a reality for years until funding was expanded for this year. It simply makes economic and social sense to fill up the rolls and pay for kids' health care, bringing in four federal dollars for every state dollar spent, she added.
"If there's kids out there who need health coverage, let them come," she said. "If the problem is out there, don't we want to know about it? As long as we have this big of a crisis of uninsured children, I'm not going to be satisfied."
Sign up for CHIP
The state is expanding the rolls of the Children's Health Insurance Program, which provides free health insurance to kids in families unable to find affordable coverage.
Families may be eligible if they earn up to 150 percent of the federal poverty level. The income threshold is $19,245 for a family of two, $24,135 for a family of three and $29,025 for a family of four.
Here are ways you can inquire about the program and sign up, if you're eligible:
Visit the state's Web site at www.chip.mt.gov, where you can get an application, fill it out and submit it.
Call the state's toll-free CHIP hot line at 1-877-543-7669, or, in Helena, at 444-6971.
Contact Working for Economic Equality and Liberation, a private advocacy group, at 1-888-543-2530. WEEL helps people fill out the four-page application.
Application forms should be available at many Indian/tribal health clinics, food banks, Head Start and county health departments.
Health Insurance for Your Small Business
By Stacey L. Bradford Published: September 21, 2005
MAKE A LIST OF the biggest headaches facing small-business owners and finding affordable health insurance for employees ranks right near the top.
Thanks to soaring insurance premiums, many small-business owners say health insurance is a luxury they simply can't afford. According to a recent survey by the Kaiser Family Foundation, a nonprofit organization based in Menlo Park, Calif., small firms (defined as those with three to 199 employees) experienced a 9.8% increase in health-insurance premiums in 2005. The average small company now pays $4,032 a year for individual coverage and $10,584 for a family. While the increase is less than what insurers demanded last year — rates increased a staggering 11.2% in 2004 — it comes on the heels of three years of double-digit price hikes. That's forced some small employers to drop coverage altogether.
Indeed, while 98% of large firms (defined as 200 employees or more) provide health insurance for their workers, only 59% of small firms do. Back in 2000, the figure was much higher with 68% of small businesses offering their employees health benefits. As you might expect, the smallest firms (those with just three to nine employees) struggle the most with affordability and only 47% of them provide any type of coverage.
Of course, dropping health coverage may hurt your business more than you think. You could risk losing your top employees and it may keep you from attracting top talent, warns Todd McCracken, president of the National Small Business Association. So small-business owners may be better off finding ways to reduce their health-care costs without discontinuing coverage altogether.
The key to affordability is to shop around from carrier to carrier and to consider sharing some of the costs with your employees, he says. In many cases, small-business owners can lower the premiums by increasing deductible levels or raising the co-payment for certain services, such as office visits and medications. While you might not be able to provide your workers with the Cadillac of PPOs, they'll be grateful to have some coverage rather than nothing.
Here's are some ways for small-business owners to reduce their costs and still offer comprehensive health benefits.
Share the Pain
Just because your insurer is raising rates by a painful 10% doesn't mean that you have to shoulder the entire increase. Consider passing it along or splitting the rate hike with your employees, suggests Gene Fairbrother, the lead small-business consultant for the National Association of the Self-Employed.
Even if you aren't struggling with a price hike you can save money by increasing the percent of the premium employees pay out of their own pockets. A common arrangement for employers is to ask their workers to cover 30% of their own premiums and 100% of the family's premium, says Madelyn Flannagan, vice president of education and research for the Independent Insurance Agents and Brokers of America. In many states there are no restrictions on how much an employer must contribute. Even in states like California, which have regulations that dictate minimum contribution levels, the minimum amount an employer must cover is only 50%.
Shave Benefits
Small-business owners should be able to keep the premium at the same price as last year if they shave some of the benefits in the plan, says John Nelson, Jr. co-CEO of Warner Pacific, an insurance brokerage based in Westlake Village, Calif. One way to do this is to raise the co-payment for office visits. By increasing the co-payment on a Blue Cross of California PPO from $30 to $40, a small company of five employees can decrease its monthly premium by $232 or 13%, says Nelson. Cut out drug coverage for branded medications and the premium will shrink $532 or 28%, he says.
High Deductible Plans
By far, the biggest savings are found on high deductible plans. Across the country, premiums decrease by 10% to 30% when the deductible jumps from $500 to $2,000, says Emily Fox, a spokeswoman for eHealthinsurance.com.
The savings can be even more significant in certain parts of the country. In California, for example, a small employer with five employees could save $750 a month or 40% by switching from a Blue Cross of California plan with a $500 deductible (with a $30 co-payment for office visits) to a $2,400 deductible (with a $35 co-payment), says Warner Pacific's Nelson.
Since a high deductible plan can be a bit difficult for many employees to stomach, you can soften the blow by offering to contribute part of the money you are saving on premiums into a Health Savings Account (HSA) for each worker. The IRS allows both employers and individuals to set aside pretax dollars into an HSAs to help pay for out-of-pocket medical expenses, including those steep deductibles. Any money that isn't used in a given year can be rolled over into the next for future medical expenses. Click here for more on HSAs.
Medical Reimbursement Plans
Health insurance still too expensive? Here's your chance to spend whatever amount you can afford. Under Section 105 of the tax code, the IRS allows small businesses to reimburse their employees for medical expenses. The business owner sets the amount of money he is willing to lay out every year and the employee then goes out and purchases health insurance on the individual market. Payments from Medical Reimbursement Plans are tax-free for the employees and tax deductible for business owners. One of the nicest features of these plans is that it allows employers to offer some type of medical benefit without the headaches of worrying about rising premiums, says National Association for the Self-Employed's Fairbrother.
MAKE A LIST OF the biggest headaches facing small-business owners and finding affordable health insurance for employees ranks right near the top.
Thanks to soaring insurance premiums, many small-business owners say health insurance is a luxury they simply can't afford. According to a recent survey by the Kaiser Family Foundation, a nonprofit organization based in Menlo Park, Calif., small firms (defined as those with three to 199 employees) experienced a 9.8% increase in health-insurance premiums in 2005. The average small company now pays $4,032 a year for individual coverage and $10,584 for a family. While the increase is less than what insurers demanded last year — rates increased a staggering 11.2% in 2004 — it comes on the heels of three years of double-digit price hikes. That's forced some small employers to drop coverage altogether.
Indeed, while 98% of large firms (defined as 200 employees or more) provide health insurance for their workers, only 59% of small firms do. Back in 2000, the figure was much higher with 68% of small businesses offering their employees health benefits. As you might expect, the smallest firms (those with just three to nine employees) struggle the most with affordability and only 47% of them provide any type of coverage.
Of course, dropping health coverage may hurt your business more than you think. You could risk losing your top employees and it may keep you from attracting top talent, warns Todd McCracken, president of the National Small Business Association. So small-business owners may be better off finding ways to reduce their health-care costs without discontinuing coverage altogether.
The key to affordability is to shop around from carrier to carrier and to consider sharing some of the costs with your employees, he says. In many cases, small-business owners can lower the premiums by increasing deductible levels or raising the co-payment for certain services, such as office visits and medications. While you might not be able to provide your workers with the Cadillac of PPOs, they'll be grateful to have some coverage rather than nothing.
Here's are some ways for small-business owners to reduce their costs and still offer comprehensive health benefits.
Share the Pain
Just because your insurer is raising rates by a painful 10% doesn't mean that you have to shoulder the entire increase. Consider passing it along or splitting the rate hike with your employees, suggests Gene Fairbrother, the lead small-business consultant for the National Association of the Self-Employed.
Even if you aren't struggling with a price hike you can save money by increasing the percent of the premium employees pay out of their own pockets. A common arrangement for employers is to ask their workers to cover 30% of their own premiums and 100% of the family's premium, says Madelyn Flannagan, vice president of education and research for the Independent Insurance Agents and Brokers of America. In many states there are no restrictions on how much an employer must contribute. Even in states like California, which have regulations that dictate minimum contribution levels, the minimum amount an employer must cover is only 50%.
Shave Benefits
Small-business owners should be able to keep the premium at the same price as last year if they shave some of the benefits in the plan, says John Nelson, Jr. co-CEO of Warner Pacific, an insurance brokerage based in Westlake Village, Calif. One way to do this is to raise the co-payment for office visits. By increasing the co-payment on a Blue Cross of California PPO from $30 to $40, a small company of five employees can decrease its monthly premium by $232 or 13%, says Nelson. Cut out drug coverage for branded medications and the premium will shrink $532 or 28%, he says.
High Deductible Plans
By far, the biggest savings are found on high deductible plans. Across the country, premiums decrease by 10% to 30% when the deductible jumps from $500 to $2,000, says Emily Fox, a spokeswoman for eHealthinsurance.com.
The savings can be even more significant in certain parts of the country. In California, for example, a small employer with five employees could save $750 a month or 40% by switching from a Blue Cross of California plan with a $500 deductible (with a $30 co-payment for office visits) to a $2,400 deductible (with a $35 co-payment), says Warner Pacific's Nelson.
Since a high deductible plan can be a bit difficult for many employees to stomach, you can soften the blow by offering to contribute part of the money you are saving on premiums into a Health Savings Account (HSA) for each worker. The IRS allows both employers and individuals to set aside pretax dollars into an HSAs to help pay for out-of-pocket medical expenses, including those steep deductibles. Any money that isn't used in a given year can be rolled over into the next for future medical expenses. Click here for more on HSAs.
Medical Reimbursement Plans
Health insurance still too expensive? Here's your chance to spend whatever amount you can afford. Under Section 105 of the tax code, the IRS allows small businesses to reimburse their employees for medical expenses. The business owner sets the amount of money he is willing to lay out every year and the employee then goes out and purchases health insurance on the individual market. Payments from Medical Reimbursement Plans are tax-free for the employees and tax deductible for business owners. One of the nicest features of these plans is that it allows employers to offer some type of medical benefit without the headaches of worrying about rising premiums, says National Association for the Self-Employed's Fairbrother.
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