By Glen Johnson, AP Political Writer | October 31, 2005
BOSTON --Massachusetts companies employing more than 10 people would face a new payroll tax that they could avoid only by providing health insurance, according to a House bill unveiled Monday.
The measure, which aims to cover 95 percent of the state's roughly 500,000 uninsured residents within three years, would tax companies with fewer than 100 employees at 4 percent of their payroll. Those with more than 100 or more workers would be taxed at 6 percent.
The tax would be reduced or nullified if the companies provided a health care plan, said Rep. Patricia Walrath, co-chairman of a legislative committee that discussed the proposal.
Employees, meanwhile, would be required to take advantage of the company health care plan, under a measure similar to the state law requiring drivers to get auto insurance before registering their automobile.
The tax revenues raised from employers who don't insure their own workers will be pooled so the state can provide subsidized coverage instead, according to the House bill.
Under current law, companies providing health insurance also pay a surcharge used to provide coverage to the uninsured. Companies that do not provide insurance do not have to pay the surcharge.
A chart Walrath, D-Stow, displayed after the committee hearing showed a family of four with an annual income of $48,500 paying $161 per month for subsidized coverage from the Commonwealth Care Health Insurance Program. A single adult earning $24,000 per year would pay $80 per month.
The legislation does not call for any increase in liquor or cigarette taxes, as had been previously discussed.
The program's estimated cost would be $25 million this year, $150 million in the first full year, $188 million in the second year, and $225 million when reaching full implementation in the third year.
Business leaders have opposed mandated coverage, saying it could impede job growth by increasing benefit costs.
Monday, October 31, 2005
Health care plans continue to evolve
fromdemocratandchronicle.com
(October 30, 2005) — Two groups of workers — women vs. men — squared off recently to bolster their health.
Mirror Show Management workers donned pedometers for eight weeks, hoping to be the group that walked the most steps to win a vacation day.
"There wasn't a lot of interest — well, until there was an extra day off involved. Than people were publicly declaring their devotion" to the competition, joked Andy Fort, a senior designer and leader of the "Sneaker Kings," the group of male workers who won the competition.
In doing so, Mirror Show in Rochester became the latest workplace nationally to give workers incentives to bolster their health, just one way companies are strategizing to keep health care costs down in the face of probably another year of double-digit premium increases.
But not all their strategies will be as welcomed by workers. Health benefits packages for 2006 — which workers are now being asked to sign up for — reflect the fact that companies are continuing to shift the cost burden onto employees.
Workers will find fewer options, plus policies with higher deductibles, co-payments and premiums. And in some cases, companies will be charging workers more for health insurance if they have an unhealthy habit such as smoking.
The goal? Give workers more responsibility for managing their own care dollars. In other words, if it costs more, they may pursue healthier lifestyles, or at least spend their health care dollars more wisely — researching costs, requesting cheaper generic drugs and avoiding unnecessary services, officials said.
Out of pocket
Rather than health maintenance organizations, in which workers pay a small, fixed co-payment for services, more companies are switching to preferred provider organizations. Those plans offer smaller premiums in exchange for more money out of pocket. And instead of a fixed co-payment, workers will be more likely to pay a percentage of the cost – for example, 20 percent of the bill rather than $20.
Employer-sponsored medical coverage is also changing to better prepare workers for the health plans of the future.
These "consumer-driven health plans" link a high deductible — let's say $1,500 for an individual and $3,000 for a family — with a health savings account. The accounts include money from the worker and perhaps the company that workers can use to pay for health care.
To get workers accustomed to such plans, a company might add items such as smaller deductibles to the health benefit. Since the deductible has to be met before the health insurance kicks in, workers will have to start paying more attention to how they spend their health care money, said Rich Bannister, chief executive of Providium Consulting Group in Perinton.
That means workers will need tools to compare the quality and costs of local health care services and providers, which Excellus BlueCross BlueShield, Rochester Region, has developed and Preferred Care is readying.
A small number of companies here and nationally offer such plans. The area's largest insurers, Excellus and Preferred Care, reported a lot of interest in the consumer-driven plans, but not a lot of companies actually adopting the plans.
One company considering such a move is the 130-worker Performance Technologies Inc.
"We now have a system that doesn't have a lot of cost containments in it," said Chief Financial Officer Dorrance Lamb. "But when employees are responsible for a deductible before they dip into their insurance, they'll be much smarter about how they spend their money."
The company wants to ensure workers have enough time to be educated on the new plans.
"This will be a big deal for our workers," he added. "This will be quite a change for them."
Focus on wellness
Workers should expect fewer health plan options in 2006.
Not only is having fewer health plans easier to administer, but such a move can mean a company has or is on the verge of changing the way it funds its worker health insurance, said Michael Faillace, an employee benefits practice leader at Brown and Brown of New York Inc. in Rochester.
Most of Rochester's top employers have moved to plans that base their health insurance rates on the health of their work force, rather than the community average. This could help companies lower premiums, and also to collect more data on the health of their workers, enabling them to craft more wellness programs that specifically target their needs.
Studies have shown that good wellness programs with high participation rates can get about a $3 return on investment for every dollar spent.
Johnson & Johnson Co. — which employs more than 1,000 people at Ortho-Clinical Diagnostics Inc. in Greece — has reported savings of about $225 annually per employee on medical costs among those enrolled in its wellness programs. That's a total yearly saving of about $8.5 million, mainly in reduced medical expenses such as doctor and hospital bills and in related administrative expenses such as processing paperwork.
Wellness programs locally include those at Birds Eye Foods Inc., which has an onsite fitness facility and runs competitions among workers to eat healthier, lose weight and exercise. Incentives range from free items like gym bags to gift certificates at Dick's Sporting Goods, said Diane Mohorter, the group insurance benefits manager.
There's also that program at Mirror Show, which was offered through Excellus' Step Up program and included a push to get workers eating more fruits and vegetables.
Vithya Ajavananda also said a benefit offered by his employer, Paychex Inc., helped him quit smoking. The company helped pay the costs associated with him quitting cigarettes — such as nicotine gum and prescription drugs.
Ajavananda, 32, has tried to quit for five years. He hopes his latest attempt — he's been clean for a month — will stick. He said smoking is getting expensive, and he's had family members who've suffered from smoking-related health problems.
Incentives
Last year, smokers cost the United States $157.7 billion in health-related economic costs, according to the U.S. Surgeon General's Office, and a lot of that tab was picked up by health plans.
Some companies are doing what Paychex did, offering financial help to smokers who want to quit. One of the newest trends, however, involves companies making tobacco users pay more for their health insurance.
For example, employees of Gannett Cos. Inc., owner of the Democrat and Chronicle, will pay $50 a month more toward health care next year if they smoke, and Xerox Corp. is giving workers an extra $200 annually for their health care — up from $100 last year — if they are tobacco-free. Probably fewer than a dozen Excellus customers have such programs "but we are going to see companies more and more adopting a strategy that links healthy behavior to employees' out-of-pocket costs," said Scott Ellsworth, president of Excellus in Rochester.
Laurie Beaudin, a legal secretary and smoker for 30 years, said she understands why employers would want workers to quit smoking, especially since they're more likely to have health problems down the road.
"It's the company that's paying for the health care, so what choice do workers have?" said Beaudin, adding that her law firm, Christiano Gallant & Coletti, hasn't pushed her to stop her habit.
But Karen Fleming, who works at another local law firm, called the smoking surcharge arbitrary. Other habits such as excessive eating and motorcycle riding also pose big health risks, she said, wondering whether there soon will be charges for those.
"The thing is, where does it stop?" she added.
(October 30, 2005) — Two groups of workers — women vs. men — squared off recently to bolster their health.
Mirror Show Management workers donned pedometers for eight weeks, hoping to be the group that walked the most steps to win a vacation day.
"There wasn't a lot of interest — well, until there was an extra day off involved. Than people were publicly declaring their devotion" to the competition, joked Andy Fort, a senior designer and leader of the "Sneaker Kings," the group of male workers who won the competition.
In doing so, Mirror Show in Rochester became the latest workplace nationally to give workers incentives to bolster their health, just one way companies are strategizing to keep health care costs down in the face of probably another year of double-digit premium increases.
But not all their strategies will be as welcomed by workers. Health benefits packages for 2006 — which workers are now being asked to sign up for — reflect the fact that companies are continuing to shift the cost burden onto employees.
Workers will find fewer options, plus policies with higher deductibles, co-payments and premiums. And in some cases, companies will be charging workers more for health insurance if they have an unhealthy habit such as smoking.
The goal? Give workers more responsibility for managing their own care dollars. In other words, if it costs more, they may pursue healthier lifestyles, or at least spend their health care dollars more wisely — researching costs, requesting cheaper generic drugs and avoiding unnecessary services, officials said.
Out of pocket
Rather than health maintenance organizations, in which workers pay a small, fixed co-payment for services, more companies are switching to preferred provider organizations. Those plans offer smaller premiums in exchange for more money out of pocket. And instead of a fixed co-payment, workers will be more likely to pay a percentage of the cost – for example, 20 percent of the bill rather than $20.
Employer-sponsored medical coverage is also changing to better prepare workers for the health plans of the future.
These "consumer-driven health plans" link a high deductible — let's say $1,500 for an individual and $3,000 for a family — with a health savings account. The accounts include money from the worker and perhaps the company that workers can use to pay for health care.
To get workers accustomed to such plans, a company might add items such as smaller deductibles to the health benefit. Since the deductible has to be met before the health insurance kicks in, workers will have to start paying more attention to how they spend their health care money, said Rich Bannister, chief executive of Providium Consulting Group in Perinton.
That means workers will need tools to compare the quality and costs of local health care services and providers, which Excellus BlueCross BlueShield, Rochester Region, has developed and Preferred Care is readying.
A small number of companies here and nationally offer such plans. The area's largest insurers, Excellus and Preferred Care, reported a lot of interest in the consumer-driven plans, but not a lot of companies actually adopting the plans.
One company considering such a move is the 130-worker Performance Technologies Inc.
"We now have a system that doesn't have a lot of cost containments in it," said Chief Financial Officer Dorrance Lamb. "But when employees are responsible for a deductible before they dip into their insurance, they'll be much smarter about how they spend their money."
The company wants to ensure workers have enough time to be educated on the new plans.
"This will be a big deal for our workers," he added. "This will be quite a change for them."
Focus on wellness
Workers should expect fewer health plan options in 2006.
Not only is having fewer health plans easier to administer, but such a move can mean a company has or is on the verge of changing the way it funds its worker health insurance, said Michael Faillace, an employee benefits practice leader at Brown and Brown of New York Inc. in Rochester.
Most of Rochester's top employers have moved to plans that base their health insurance rates on the health of their work force, rather than the community average. This could help companies lower premiums, and also to collect more data on the health of their workers, enabling them to craft more wellness programs that specifically target their needs.
Studies have shown that good wellness programs with high participation rates can get about a $3 return on investment for every dollar spent.
Johnson & Johnson Co. — which employs more than 1,000 people at Ortho-Clinical Diagnostics Inc. in Greece — has reported savings of about $225 annually per employee on medical costs among those enrolled in its wellness programs. That's a total yearly saving of about $8.5 million, mainly in reduced medical expenses such as doctor and hospital bills and in related administrative expenses such as processing paperwork.
Wellness programs locally include those at Birds Eye Foods Inc., which has an onsite fitness facility and runs competitions among workers to eat healthier, lose weight and exercise. Incentives range from free items like gym bags to gift certificates at Dick's Sporting Goods, said Diane Mohorter, the group insurance benefits manager.
There's also that program at Mirror Show, which was offered through Excellus' Step Up program and included a push to get workers eating more fruits and vegetables.
Vithya Ajavananda also said a benefit offered by his employer, Paychex Inc., helped him quit smoking. The company helped pay the costs associated with him quitting cigarettes — such as nicotine gum and prescription drugs.
Ajavananda, 32, has tried to quit for five years. He hopes his latest attempt — he's been clean for a month — will stick. He said smoking is getting expensive, and he's had family members who've suffered from smoking-related health problems.
Incentives
Last year, smokers cost the United States $157.7 billion in health-related economic costs, according to the U.S. Surgeon General's Office, and a lot of that tab was picked up by health plans.
Some companies are doing what Paychex did, offering financial help to smokers who want to quit. One of the newest trends, however, involves companies making tobacco users pay more for their health insurance.
For example, employees of Gannett Cos. Inc., owner of the Democrat and Chronicle, will pay $50 a month more toward health care next year if they smoke, and Xerox Corp. is giving workers an extra $200 annually for their health care — up from $100 last year — if they are tobacco-free. Probably fewer than a dozen Excellus customers have such programs "but we are going to see companies more and more adopting a strategy that links healthy behavior to employees' out-of-pocket costs," said Scott Ellsworth, president of Excellus in Rochester.
Laurie Beaudin, a legal secretary and smoker for 30 years, said she understands why employers would want workers to quit smoking, especially since they're more likely to have health problems down the road.
"It's the company that's paying for the health care, so what choice do workers have?" said Beaudin, adding that her law firm, Christiano Gallant & Coletti, hasn't pushed her to stop her habit.
But Karen Fleming, who works at another local law firm, called the smoking surcharge arbitrary. Other habits such as excessive eating and motorcycle riding also pose big health risks, she said, wondering whether there soon will be charges for those.
"The thing is, where does it stop?" she added.
Student Health Insurance to rise
Provider asks for 21 percent increase; Committee seeks to reduce to 15 percent
Kristin Hawkins, Cavalier Daily Staff Writer
The University's insurance provider, The Chickering Group, has proposed a 21 percent increase in student health insurance premiums for next year, and benefits are not expected to change significantly, according to members of the Student Health Insurance Committee.
Many members of the Committee questioned the need for such a large cost increase at a meeting with Chickering last week, Committee Director Susan Davis said. Chickering originally had proposed a 24 percent increase but lowered it to 21 percent by the end of the meeting.
"It was a very aggressive meeting," Davis said. "Through a lot of difficult questioning by the Committee members, [Chickering] agreed to go back and recalculate."
Committee members estimate the actual increase will be closer to 15 percent.
"For most plans, the typical rate of inflation is 12 to 15 percent," Davis said. "We will not accept a 21 percent increase. That's way too high."
Graduate students are particularly concerned about the extent of this year's proposed increase, Graduate Committee Rep. Monica Williams said.
"The typical stipend for a graduate student in my department is $4,000," Williams said. "To insure your whole family, it costs [more than] $7,000."
The increases may cause prospective graduate students to attend schools that offer free medical insurance for students and their spouses, Williams said.
Benefits will not be reduced in order to compensate for rising costs, as the Committee places a high emphasis on maintaining a comprehensive plan, Davis said.
Both Davis and Williams attributed the rising insurance costs to inflation and low participation rates in the program.
Williams described the insurance program as a "catch-22," as many students who purchase insurance do so because they anticipate the need for expensive medical treatment. These conditions drive up the price of insurance for all policy holders in the program.
The Committee plans to focus on increasing the number of international graduate students who purchase insurance through the University in order to keep rates from increasing dramatically, Davis said.
Students who are enrolled in at least one credit hour and pay a student activity fee are eligible to purchase insurance from Chickering through the University. The University provides a health insurance subsidy plan for many graduate students, though not all students are eligible to receive the subsidy, Davis said.
The Chickering Group was chosen as the University's health insurance provider in 2001. Williams said the University will continue to work with Chickering for the upcoming school year. The University's health insurance plan will be open for competitive bids the following year.
Kristin Hawkins, Cavalier Daily Staff Writer
The University's insurance provider, The Chickering Group, has proposed a 21 percent increase in student health insurance premiums for next year, and benefits are not expected to change significantly, according to members of the Student Health Insurance Committee.
Many members of the Committee questioned the need for such a large cost increase at a meeting with Chickering last week, Committee Director Susan Davis said. Chickering originally had proposed a 24 percent increase but lowered it to 21 percent by the end of the meeting.
"It was a very aggressive meeting," Davis said. "Through a lot of difficult questioning by the Committee members, [Chickering] agreed to go back and recalculate."
Committee members estimate the actual increase will be closer to 15 percent.
"For most plans, the typical rate of inflation is 12 to 15 percent," Davis said. "We will not accept a 21 percent increase. That's way too high."
Graduate students are particularly concerned about the extent of this year's proposed increase, Graduate Committee Rep. Monica Williams said.
"The typical stipend for a graduate student in my department is $4,000," Williams said. "To insure your whole family, it costs [more than] $7,000."
The increases may cause prospective graduate students to attend schools that offer free medical insurance for students and their spouses, Williams said.
Benefits will not be reduced in order to compensate for rising costs, as the Committee places a high emphasis on maintaining a comprehensive plan, Davis said.
Both Davis and Williams attributed the rising insurance costs to inflation and low participation rates in the program.
Williams described the insurance program as a "catch-22," as many students who purchase insurance do so because they anticipate the need for expensive medical treatment. These conditions drive up the price of insurance for all policy holders in the program.
The Committee plans to focus on increasing the number of international graduate students who purchase insurance through the University in order to keep rates from increasing dramatically, Davis said.
Students who are enrolled in at least one credit hour and pay a student activity fee are eligible to purchase insurance from Chickering through the University. The University provides a health insurance subsidy plan for many graduate students, though not all students are eligible to receive the subsidy, Davis said.
The Chickering Group was chosen as the University's health insurance provider in 2001. Williams said the University will continue to work with Chickering for the upcoming school year. The University's health insurance plan will be open for competitive bids the following year.
Friday, October 28, 2005
Worker health plans fail checkup
MIKE DRUMMOND
Staff Writer Charlotte Observer
N.C. businesses nearly lead the nation when it comes to killing employee health plans.
Only Missouri had a bigger decline in employer-provided health care from 2000 to 2004, according to a report from the Economic Policy Institute, a think tank partly funded by unions.
The findings prompted North Carolina's largest small-business trade group to renew calls for state health insurance incentives. The N.C. arm of the National Federation of Independent Business also echoed support for a bill in the U.S. Senate that would allow small employers to buy insurance collectively through so-called association health plans.
The clarions come amid national angst over escalating health insurance costs, which have risen an average of 15 percent a year since 2002. EPI and others cite soaring costs as a key reason for employers dropping health plans.
The NFIB and the institute rarely find common ground. They're at polar opposites when it comes to raising the minimum wage, for instance.
However, the EPI study "confirmed what we know," said NFIB spokesman Jim Brown. "It doesn't matter who the source is."
The NFIB supported a General Assembly bill this year that would have extended a $400 tax credit per employee to small employers with 25 or fewer workers. Eligible companies would have to pay at least 50 percent of their employees' health insurance.
The group pulled support when a provision to boost the state's minimum wage by 85 cents to $6 an hour was tacked on. It hopes a stand-alone tax credit bill is reintroduced next year.
Meanwhile, the group hopes the Senate green-lights the Small-Business Health Fairness Act, which would let small businesses pool resources to buy insurance. The bill, co-sponsored by Sen. Elizabeth Dole, R-N.C., is in committee.
More than 1,300 organizations, including the American Nurses Association, the NAACP and insurers such as Blue Cross and Blue Shield of North Carolina, oppose association health plans.
A Blue Cross spokesman said the federal bill would strip state oversight of insurance coverage. Under the proposed law, employers could deny coverage to some now protected under existing statute, and make the appeals process more onerous.
Jim Bitzan owns a Vespa franchise in Charlotte. He hires about a half-dozen workers, all part time.
The state and federal small-business health initiatives whet his appetite.
"If I were able to offer health insurance, I think I could hire full-time employees," he said. "I could take some time off -- I haven't had a day off in 3 1/2 years."
Staff Writer Charlotte Observer
N.C. businesses nearly lead the nation when it comes to killing employee health plans.
Only Missouri had a bigger decline in employer-provided health care from 2000 to 2004, according to a report from the Economic Policy Institute, a think tank partly funded by unions.
The findings prompted North Carolina's largest small-business trade group to renew calls for state health insurance incentives. The N.C. arm of the National Federation of Independent Business also echoed support for a bill in the U.S. Senate that would allow small employers to buy insurance collectively through so-called association health plans.
The clarions come amid national angst over escalating health insurance costs, which have risen an average of 15 percent a year since 2002. EPI and others cite soaring costs as a key reason for employers dropping health plans.
The NFIB and the institute rarely find common ground. They're at polar opposites when it comes to raising the minimum wage, for instance.
However, the EPI study "confirmed what we know," said NFIB spokesman Jim Brown. "It doesn't matter who the source is."
The NFIB supported a General Assembly bill this year that would have extended a $400 tax credit per employee to small employers with 25 or fewer workers. Eligible companies would have to pay at least 50 percent of their employees' health insurance.
The group pulled support when a provision to boost the state's minimum wage by 85 cents to $6 an hour was tacked on. It hopes a stand-alone tax credit bill is reintroduced next year.
Meanwhile, the group hopes the Senate green-lights the Small-Business Health Fairness Act, which would let small businesses pool resources to buy insurance. The bill, co-sponsored by Sen. Elizabeth Dole, R-N.C., is in committee.
More than 1,300 organizations, including the American Nurses Association, the NAACP and insurers such as Blue Cross and Blue Shield of North Carolina, oppose association health plans.
A Blue Cross spokesman said the federal bill would strip state oversight of insurance coverage. Under the proposed law, employers could deny coverage to some now protected under existing statute, and make the appeals process more onerous.
Jim Bitzan owns a Vespa franchise in Charlotte. He hires about a half-dozen workers, all part time.
The state and federal small-business health initiatives whet his appetite.
"If I were able to offer health insurance, I think I could hire full-time employees," he said. "I could take some time off -- I haven't had a day off in 3 1/2 years."
MS auto insurance law doesn't require punitive damage coverage
By Jack Elliott Jr.
The Associated Press
State law does not require insurance companies to cover punitive damage awards in their automobile liability policies, the Mississippi Supreme Court has ruled.
In 2002, Shelter Mutual Insurance Co. and Shelter General Insurance Co. sought to amend their Mississippi automobile insurance private passenger policies to exclude liability for punitive damages.
In 2003, Insurance Commissioner George Dale refused to approve the amendments, citing a previous Supreme Court decision — and an attorney general's interpretation — that Dale said provided that "an automobile liability policy which provides the insurer will pay all sums which the insured becomes legally obligated includes coverage for punitive damage awards."
A Hinds County chancellor sided with Dale in 2004 in a lawsuit filed by the insurance companies. The chancellor said state law was written so broadly as to include the payment of punitive damages by the insurer.
On Thursday, the Supreme Court overturned the lower court ruling and sent the case back to Dale.
Justice Jess Dickinson, writing for the court, said the issue was not whether the Legislature could require that automobile insurance policies written in Mississippi to cover awards of punitive damages, but whether it had done so.
Dickinson said the Supreme Court ruled in a 1981 case that the insurer was required to pay punitive damages because its policy included language that the company would pay "all sums which the insured shall become legally obligated to pay."
Dickinson said the Supreme Court did not rule that the insurance company was required by law to cover punitive damages. He said the court also did not rule that an insurance company is prohibited from excluding coverage for punitive damages.
In a later case, Dickinson said the court found that the extent or limit of liability for punitive damages was governed by the agreement of the parties as reflected by the actual language in the insurance policy.
Dickinson said Mississippi law refers to coverage amounts for bodily injury, death and property damage.
"The Legislature makes no reference to punitive damages in the statute.
"We hold that Mississippi law does not prevent Shelter from excluding coverage for punitive damages by amendatory endorsement to its automobile liability policies. Both the commissioner and the chancellor erred in concluding otherwise," Dickinson said.
The Associated Press
State law does not require insurance companies to cover punitive damage awards in their automobile liability policies, the Mississippi Supreme Court has ruled.
In 2002, Shelter Mutual Insurance Co. and Shelter General Insurance Co. sought to amend their Mississippi automobile insurance private passenger policies to exclude liability for punitive damages.
In 2003, Insurance Commissioner George Dale refused to approve the amendments, citing a previous Supreme Court decision — and an attorney general's interpretation — that Dale said provided that "an automobile liability policy which provides the insurer will pay all sums which the insured becomes legally obligated includes coverage for punitive damage awards."
A Hinds County chancellor sided with Dale in 2004 in a lawsuit filed by the insurance companies. The chancellor said state law was written so broadly as to include the payment of punitive damages by the insurer.
On Thursday, the Supreme Court overturned the lower court ruling and sent the case back to Dale.
Justice Jess Dickinson, writing for the court, said the issue was not whether the Legislature could require that automobile insurance policies written in Mississippi to cover awards of punitive damages, but whether it had done so.
Dickinson said the Supreme Court ruled in a 1981 case that the insurer was required to pay punitive damages because its policy included language that the company would pay "all sums which the insured shall become legally obligated to pay."
Dickinson said the Supreme Court did not rule that the insurance company was required by law to cover punitive damages. He said the court also did not rule that an insurance company is prohibited from excluding coverage for punitive damages.
In a later case, Dickinson said the court found that the extent or limit of liability for punitive damages was governed by the agreement of the parties as reflected by the actual language in the insurance policy.
Dickinson said Mississippi law refers to coverage amounts for bodily injury, death and property damage.
"The Legislature makes no reference to punitive damages in the statute.
"We hold that Mississippi law does not prevent Shelter from excluding coverage for punitive damages by amendatory endorsement to its automobile liability policies. Both the commissioner and the chancellor erred in concluding otherwise," Dickinson said.
Michigan senator wants to tie health insurance to behavior
From The Detroit Free Press
October 27, 2005, 5:53 PM
LANSING, Mich. (AP) -- Insurance companies and HMOs in Michigan would be required to offer financial incentives that reward people for healthy behavior under legislation introduced Thursday in the state Senate.
Sen. Tom George, a Portage Republican and practicing physician, said the state is facing a public health crisis steeped in poor dieting, smoking and a lack of exercise. State law currently bars health insurance companies from offering incentives for good behavior -- unlike life, auto and home insurers that can give premium reductions for things such as using an anti-theft device.
"Individuals who exercise, refrain from smoking and are compliant with treatment should see a benefit in their pocketbook," said George, who added that unhealthy behaviors are known to contribute to at least 25 percent of health care costs.
Under George's plan, employers or individuals buying health insurance could receive up to a 10 percent rebate for taking better care of themselves.
George said the legislation is aimed at helping smaller businesses that aren't big enough to self-insure. Self-insured companies have freedom to create incentive programs for their workers, though it's unclear how many are doing so.
A Lansing-area health benefits administrator gained attention earlier this year after making it a firing offense to smoke, though that approach was tied to employment, not health insurance.
Companies wouldn't be required to purchase health insurance coverage that rewards healthy living, George said.
Altarum, an Ann Arbor-based nonprofit research institute, released a 2004 study showing Michigan with high rates of obesity, diabetes, heart disease and smoking compared with other states. Overweight and obese people incur up to $1,500 more in annual medical expenses than healthy individuals, according to the report.
George's legislation has been welcomed in the GOP-controlled Senate. Every Republican senator is co-sponsoring the two-bill package. A spokeswoman for Democratic Gov. Jennifer Granholm said the governor is interested in taking a look at the bills.
Richard Murdock, executive director of the Michigan Association of Health Plans, which represents HMOs, said the group wants to encourage healthy lifestyles.
"This is an area I think we can all come together on," said Murdock, who added that HMOs need to study specifics of the legislation.
A spokeswoman for Blue Cross Blue Shield of Michigan declined to comment until the insurer has time to review the legislation.
George, an anesthesiologist, also is an architect of a new requirement that Medicaid recipients sign an agreement pledging to follow healthy lifestyles. He wanted to charge Medicaid patients less for services if they exercise regularly and don't smoke. But the proposal tying incentives to copays stalled in budget negotiations, and lawmakers are continuing to study the idea.
October 27, 2005, 5:53 PM
LANSING, Mich. (AP) -- Insurance companies and HMOs in Michigan would be required to offer financial incentives that reward people for healthy behavior under legislation introduced Thursday in the state Senate.
Sen. Tom George, a Portage Republican and practicing physician, said the state is facing a public health crisis steeped in poor dieting, smoking and a lack of exercise. State law currently bars health insurance companies from offering incentives for good behavior -- unlike life, auto and home insurers that can give premium reductions for things such as using an anti-theft device.
"Individuals who exercise, refrain from smoking and are compliant with treatment should see a benefit in their pocketbook," said George, who added that unhealthy behaviors are known to contribute to at least 25 percent of health care costs.
Under George's plan, employers or individuals buying health insurance could receive up to a 10 percent rebate for taking better care of themselves.
George said the legislation is aimed at helping smaller businesses that aren't big enough to self-insure. Self-insured companies have freedom to create incentive programs for their workers, though it's unclear how many are doing so.
A Lansing-area health benefits administrator gained attention earlier this year after making it a firing offense to smoke, though that approach was tied to employment, not health insurance.
Companies wouldn't be required to purchase health insurance coverage that rewards healthy living, George said.
Altarum, an Ann Arbor-based nonprofit research institute, released a 2004 study showing Michigan with high rates of obesity, diabetes, heart disease and smoking compared with other states. Overweight and obese people incur up to $1,500 more in annual medical expenses than healthy individuals, according to the report.
George's legislation has been welcomed in the GOP-controlled Senate. Every Republican senator is co-sponsoring the two-bill package. A spokeswoman for Democratic Gov. Jennifer Granholm said the governor is interested in taking a look at the bills.
Richard Murdock, executive director of the Michigan Association of Health Plans, which represents HMOs, said the group wants to encourage healthy lifestyles.
"This is an area I think we can all come together on," said Murdock, who added that HMOs need to study specifics of the legislation.
A spokeswoman for Blue Cross Blue Shield of Michigan declined to comment until the insurer has time to review the legislation.
George, an anesthesiologist, also is an architect of a new requirement that Medicaid recipients sign an agreement pledging to follow healthy lifestyles. He wanted to charge Medicaid patients less for services if they exercise regularly and don't smoke. But the proposal tying incentives to copays stalled in budget negotiations, and lawmakers are continuing to study the idea.
Thursday, October 27, 2005
Coventry posts third-quarter profit
BETHESDA, Md.—Coventry Health Care Inc. reported higher profits due to its acquisition of First Health Inc. and strong performances from its health plan operations, but warned of a possible loss in fourth-quarter profits due to Hurricane Katrina.
In the first nine months of 2005, the Bethesda, Md.-based company posted net income of $375.2 million, a 34.6% increase from the prior-year period. Revenues for the first nine months of 2005 were $4.9 billion, up 19.7% from the prior-year period.
In its earnings statement, the company warned of possible losses in the fourth quarter in its Louisiana operations due to the impact of Hurricane Katrina.
Total membership as of Sept. 30 was 2.5 million members, a 2.4% increase over the prior-year period.
In the first nine months of 2005, the Bethesda, Md.-based company posted net income of $375.2 million, a 34.6% increase from the prior-year period. Revenues for the first nine months of 2005 were $4.9 billion, up 19.7% from the prior-year period.
In its earnings statement, the company warned of possible losses in the fourth quarter in its Louisiana operations due to the impact of Hurricane Katrina.
Total membership as of Sept. 30 was 2.5 million members, a 2.4% increase over the prior-year period.
WellPoint profits up on enrollment gains
INDIANAPOLIS—WellPoint Inc. reported higher profits for the first nine months of 2005 due to strong membership gains and disciplined pricing in both its individual and small group and national account businesses.
The Indianapolis-based company posted net income for the first nine months of 2005 of $1.8 billion, a 6.9% increase from the prior-year period.
Revenues for the first nine months of 2005 were $33.7 billion, a 7.4% increase from the first nine months of 2004.
Total medical membership as of Sept. 30 was 29 million, a 5.6% increase from the prior-year period.
The Indianapolis-based company posted net income for the first nine months of 2005 of $1.8 billion, a 6.9% increase from the prior-year period.
Revenues for the first nine months of 2005 were $33.7 billion, a 7.4% increase from the first nine months of 2004.
Total medical membership as of Sept. 30 was 29 million, a 5.6% increase from the prior-year period.
Aetna profit helped by cost control, membership
NEW YORK (Reuters)—Health insurer Aetna Inc. on Thursday said third-quarter earnings from continuing operations rose 25% on cost controls and a boost in membership.
Aetna also lifted its 2005 profit forecast and said next year's results would track ahead of current analysts' estimates.
"We really have strong momentum in the marketplace," Aetna President Ronald Williams told Reuters. "Customers and our members are benefiting from our ability to control medical cost and quality."
Aetna said earnings rose to $377.8 million, or $1.26 per share, compared with earnings from continuing operations of $302.3 million, or 96 cents per share, a year earlier.
Year-earlier results excluded a $990 million gain related to a delayed tax refund from the sale of a property casualty business in 1996. Including the gain, year-earlier net income was $1.29 billion, or $4.10 per share. Revenue rose 13% to $5.7 billion.
Aetna said health plan membership rose 8% to 14.7 million members.
Compared with the second quarter, membership rose by 215,000, with the company's mid-size and smaller accounts leading the way. Aetna also added 220,000 members to its pharmacy benefit plans and 55,000 to dental plans.
"Our membership growth is strong across all of our segments and all of our regions," Williams said.
Medical healthcare costs remained stable in the quarter for its commercial business, the company said.
Investors are watching to see whether Aetna is interested in acquisitions after its two larger peers—UnitedHealth Group Inc. and WellPoint Inc.—recently announced major takeovers.
Williams said Aetna's acquisition strategy involves obtaining new technology or capabilities, such as recent deals giving it access to students or part-time workers, or gaining membership in certain geographic regions.
Aetna said Wednesday it plans to acquire all the stock it does not already own in Aetna Specialty Pharmacy, a joint venture it formed last year with Priority Healthcare Corp.
Aetna also lifted its 2005 profit forecast and said next year's results would track ahead of current analysts' estimates.
"We really have strong momentum in the marketplace," Aetna President Ronald Williams told Reuters. "Customers and our members are benefiting from our ability to control medical cost and quality."
Aetna said earnings rose to $377.8 million, or $1.26 per share, compared with earnings from continuing operations of $302.3 million, or 96 cents per share, a year earlier.
Year-earlier results excluded a $990 million gain related to a delayed tax refund from the sale of a property casualty business in 1996. Including the gain, year-earlier net income was $1.29 billion, or $4.10 per share. Revenue rose 13% to $5.7 billion.
Aetna said health plan membership rose 8% to 14.7 million members.
Compared with the second quarter, membership rose by 215,000, with the company's mid-size and smaller accounts leading the way. Aetna also added 220,000 members to its pharmacy benefit plans and 55,000 to dental plans.
"Our membership growth is strong across all of our segments and all of our regions," Williams said.
Medical healthcare costs remained stable in the quarter for its commercial business, the company said.
Investors are watching to see whether Aetna is interested in acquisitions after its two larger peers—UnitedHealth Group Inc. and WellPoint Inc.—recently announced major takeovers.
Williams said Aetna's acquisition strategy involves obtaining new technology or capabilities, such as recent deals giving it access to students or part-time workers, or gaining membership in certain geographic regions.
Aetna said Wednesday it plans to acquire all the stock it does not already own in Aetna Specialty Pharmacy, a joint venture it formed last year with Priority Healthcare Corp.
INSURANCE DEPARTMENT, CRIMINAL JUSTICE SERVICES CITED FOR EFFORTS IN COMBATING FRAUD AND REDUCING AUTO RATES
ALBANY, NY -- (10/26/2005; 1500)(EIS) -- Ten New York State Insurance Department (NYSID) employees and five from the New York State Division of Criminal Justice Services (DCJS) were presented today with the Governor's Office of Employees Relations' (GOER) Workforce Champions Award, which recognizes New York State employees who have worked together to improve significantly state governmental operations.
The NYSID and the DCJS professionals were honored for their successful efforts to reduce New York State's automobile insurance rates. The two agencies employed a multi-faceted strategy in recent years to bring cost savings to millions of drivers statewide. The regulatory initiatives included:
-- Reducing to 45 days from 180 days the time in which medical providers must submit claims to insurers for payment and to 30 days from 90 days the timeframe for injured parties to file an injury claim. Both measures closed loopholes in the NYSID's Regulation 68 that had been exploited for fraud and abuse.
-- Developing a statewide partnership with all 62 county prosecutors, private-sector insurer fraud units and the law enforcement community to attack aggressively no-fault auto fraud in New York State.
-- Bringing price uniformity to the durable medical equipment (e.g., neck braces, walkers) market so that auto insurers pay to the sellers of these devices fees that are now linked to the New York State Medicaid Management Information Provider Manual. Governed under NYSID Regulation 83, the sellers of durable medical equipment had billed auto insurers previously under rules that were open to interpretation.
-- Improving the efficiency of New York's no-fault arbitration system, which helps to settle no-fault auto disputes between claimants and insurers. The number of pending cases in the arbitration system dropped to 17,053 as of September 2005 when compared to the 116,200 that were unresolved in March 2002, a reduction of 85 percent.
Efforts by the NYSID and DCJS began to pay dividends in late 2004 when a few major auto insurers announced they were lowering rates by 5% to 10%. Other auto insurers followed suit in 2005 for their policyholders. As a result of these unprecedented rate reductions, New York drivers are expected to save approximately $400 million in auto insurance premiums as of year-end 2005.
The following individuals from the New York Insurance Department were cited for their contributions: August D'Aureli (Deputy Chief Investigator), Gary Anderson (Senior Investigator), Mark Sirkin (Senior Investigator), Arthur Masinski (Senior Investigator), David Hahn (Senior Investigator), Edward Miller (Investigator), Paul Zuckerman (Principal Attorney), Lawrence Fuchsberg (Supervising Attorney), Joseph Smeragliuolo (Supervising Insurance Examiner), and Bruce Green (Supervising Actuary).
The New York State Division of Criminal Services honorees included: Eileen Langer-Smith (Criminal Justice Program Specialist), Jack Donnelly (Criminal Justice Program Representative), John DonVito (Criminal Justice Program Representative), Michael Nardolillo (Criminal Justice Program Representative), and Vicki Milonovich (Criminal Justice Program Aide).
Superintendent of Insurance Howard Mills said, "I am extremely proud of the individuals honored today by the Governor's Office of Employee Relations. GOER's Workforce Champions Award is one of the most prestigious honors that can be bestowed upon a New York State agency, and our Insurance Department personnel richly deserve this recognition. Every New Yorker who saved money on their auto insurance premiums should be aware of the hard work these individuals devoted to this effort."
Director of New York State Criminal Justice Chauncey G. Parker said, "Crime comes in many forms and insurance fraud is one of the toughest to tackle. New York auto insurance rates had been rising for decades and most industry analysts expected the trend to continue. Through aggressive actions, the New York State Division of Criminal Justice Services and New York State Department of Insurance have worked tirelessly and now, in 2005, millions of New York drivers are enjoying the fruits of that labor - an astounding auto premium savings of nearly $400 million."
GOER also gave Workforce Champion Awards today to the state's Higher Education Services Corporation, the Office of Mental Retardation and Development Disabilities, and the Office for the Aging.
The NYSID and the DCJS professionals were honored for their successful efforts to reduce New York State's automobile insurance rates. The two agencies employed a multi-faceted strategy in recent years to bring cost savings to millions of drivers statewide. The regulatory initiatives included:
-- Reducing to 45 days from 180 days the time in which medical providers must submit claims to insurers for payment and to 30 days from 90 days the timeframe for injured parties to file an injury claim. Both measures closed loopholes in the NYSID's Regulation 68 that had been exploited for fraud and abuse.
-- Developing a statewide partnership with all 62 county prosecutors, private-sector insurer fraud units and the law enforcement community to attack aggressively no-fault auto fraud in New York State.
-- Bringing price uniformity to the durable medical equipment (e.g., neck braces, walkers) market so that auto insurers pay to the sellers of these devices fees that are now linked to the New York State Medicaid Management Information Provider Manual. Governed under NYSID Regulation 83, the sellers of durable medical equipment had billed auto insurers previously under rules that were open to interpretation.
-- Improving the efficiency of New York's no-fault arbitration system, which helps to settle no-fault auto disputes between claimants and insurers. The number of pending cases in the arbitration system dropped to 17,053 as of September 2005 when compared to the 116,200 that were unresolved in March 2002, a reduction of 85 percent.
Efforts by the NYSID and DCJS began to pay dividends in late 2004 when a few major auto insurers announced they were lowering rates by 5% to 10%. Other auto insurers followed suit in 2005 for their policyholders. As a result of these unprecedented rate reductions, New York drivers are expected to save approximately $400 million in auto insurance premiums as of year-end 2005.
The following individuals from the New York Insurance Department were cited for their contributions: August D'Aureli (Deputy Chief Investigator), Gary Anderson (Senior Investigator), Mark Sirkin (Senior Investigator), Arthur Masinski (Senior Investigator), David Hahn (Senior Investigator), Edward Miller (Investigator), Paul Zuckerman (Principal Attorney), Lawrence Fuchsberg (Supervising Attorney), Joseph Smeragliuolo (Supervising Insurance Examiner), and Bruce Green (Supervising Actuary).
The New York State Division of Criminal Services honorees included: Eileen Langer-Smith (Criminal Justice Program Specialist), Jack Donnelly (Criminal Justice Program Representative), John DonVito (Criminal Justice Program Representative), Michael Nardolillo (Criminal Justice Program Representative), and Vicki Milonovich (Criminal Justice Program Aide).
Superintendent of Insurance Howard Mills said, "I am extremely proud of the individuals honored today by the Governor's Office of Employee Relations. GOER's Workforce Champions Award is one of the most prestigious honors that can be bestowed upon a New York State agency, and our Insurance Department personnel richly deserve this recognition. Every New Yorker who saved money on their auto insurance premiums should be aware of the hard work these individuals devoted to this effort."
Director of New York State Criminal Justice Chauncey G. Parker said, "Crime comes in many forms and insurance fraud is one of the toughest to tackle. New York auto insurance rates had been rising for decades and most industry analysts expected the trend to continue. Through aggressive actions, the New York State Division of Criminal Justice Services and New York State Department of Insurance have worked tirelessly and now, in 2005, millions of New York drivers are enjoying the fruits of that labor - an astounding auto premium savings of nearly $400 million."
GOER also gave Workforce Champion Awards today to the state's Higher Education Services Corporation, the Office of Mental Retardation and Development Disabilities, and the Office for the Aging.
Who Pays for Health Insurance?
From Tech Central Station
If you think that employers' health insurance costs have gotten out of hand, that's nothing. The rhetoric about health insurance costs is what I would argue is most out of control. I think that both the Left and the Right are abusing the issue, with the Left trumpeting it as a rationale for national health insurance and the Right buying into the notion that employer-provided health insurance is a major competitive disadvantage for U.S. companies.
Suppose that health insurance costs $6000 a year. For a 2000-hour work week, that means that it costs $3 an hour.
Next, suppose that the breakeven compensation for a worker in a particular industry is $20 an hour. What that means is that the most a firm can afford in total compensation, including benefits, is $20 an hour. That means that if the employer provides health insurance, the worker can only be paid $17 an hour.
Finally, consider three alternatives:
1. Workers are paid $20 an hour, and they buy individual health insurance.
2. Workers are paid $17 an hour, and the company also gives them health insurance.
3. Workers are paid $20 an hour, but $3 is taken out in taxes for national health insurance, and the government provides health insurance.
What is the difference between these three schemes? As I have described them, there is no difference. The company is just as competitive or uncompetitive, regardless. After paying for health insurance, the worker has just as much money left over, regardless.
If the employer stopped paying for health insurance, the worker would not lose anything. Of course, if the employer stopped paying for health insurance but continued to pay $17 an hour, then that would amount to a pay cut. However, if the employer can get away with a pay cut, they ought to be able to do so with or without reducing health insurance.
Complications
There are many real-world complications relative to the three alternatives, including:
For many workers, employer-provided health insurance could be cheaper, because of the natural risk pool embodied in the employee base.
Government health insurance could turn out to be either more or less efficient than private health insurance.
Shifting from employer-provided insurance to individual insurance could reduce (or, for that matter, increase) insurance company overhead.
Health benefits are currently exempt from taxes when paid for by companies, but not when paid for by individuals.
Individuals choosing their own health insurance might pick plans with different costs than those provided by employers.
In the real world, therefore, the results are not exactly the same regardless of whether health insurance is paid for by the worker, the employer, or the government. However, the results are not going to be as wildly different as partisans want to suggest.
American firms will not become more competitive by shedding health care costs, unless in the process they can reduce the net compensation paid to workers. Cutting health insurance benefits and raising take-home pay or payroll taxes by an equivalent amount is a wash.
Health insurance costs will not fall for American workers unless costs in the health care system are reduced. I have spent considerable time looking into this issue, and my belief is that there is no free lunch. That is, none of the usual scapegoats for health care costs -- spending on the last year of life, excess profits of suppliers, administrative overhead, malpractice lawsuits -- is quantitatively large in relation to the level of health care services that Americans consume.
The only way to bring down health care costs is to consume less in terms of health care services. That in turn will require a major cultural change. One change could be centralized rationing of health care, with supply controlled by the government. Another change would be to dampen demand by switching consumers from comprehensive health insurance to catastrophic health insurance.
In the absence of cultural change, I believe that America will continue to be the leader in Activist medicine, with heavy use of specialists and technological apparatus. Activist medicine may or may not be the right way to approach health care. But it is the reason that health care in this country consumes such a large share of our GDP.
I am in favor of getting rid of employers as the health insurance Middle Man. I believe that employer-provided health insurance is inefficient and an economic distortion. However, it is important to recognize that America's large health care bills and the competitiveness of our large firms is not going to be much affected by changing to a different system.
If you think that employers' health insurance costs have gotten out of hand, that's nothing. The rhetoric about health insurance costs is what I would argue is most out of control. I think that both the Left and the Right are abusing the issue, with the Left trumpeting it as a rationale for national health insurance and the Right buying into the notion that employer-provided health insurance is a major competitive disadvantage for U.S. companies.
Suppose that health insurance costs $6000 a year. For a 2000-hour work week, that means that it costs $3 an hour.
Next, suppose that the breakeven compensation for a worker in a particular industry is $20 an hour. What that means is that the most a firm can afford in total compensation, including benefits, is $20 an hour. That means that if the employer provides health insurance, the worker can only be paid $17 an hour.
Finally, consider three alternatives:
1. Workers are paid $20 an hour, and they buy individual health insurance.
2. Workers are paid $17 an hour, and the company also gives them health insurance.
3. Workers are paid $20 an hour, but $3 is taken out in taxes for national health insurance, and the government provides health insurance.
What is the difference between these three schemes? As I have described them, there is no difference. The company is just as competitive or uncompetitive, regardless. After paying for health insurance, the worker has just as much money left over, regardless.
If the employer stopped paying for health insurance, the worker would not lose anything. Of course, if the employer stopped paying for health insurance but continued to pay $17 an hour, then that would amount to a pay cut. However, if the employer can get away with a pay cut, they ought to be able to do so with or without reducing health insurance.
Complications
There are many real-world complications relative to the three alternatives, including:
For many workers, employer-provided health insurance could be cheaper, because of the natural risk pool embodied in the employee base.
Government health insurance could turn out to be either more or less efficient than private health insurance.
Shifting from employer-provided insurance to individual insurance could reduce (or, for that matter, increase) insurance company overhead.
Health benefits are currently exempt from taxes when paid for by companies, but not when paid for by individuals.
Individuals choosing their own health insurance might pick plans with different costs than those provided by employers.
In the real world, therefore, the results are not exactly the same regardless of whether health insurance is paid for by the worker, the employer, or the government. However, the results are not going to be as wildly different as partisans want to suggest.
American firms will not become more competitive by shedding health care costs, unless in the process they can reduce the net compensation paid to workers. Cutting health insurance benefits and raising take-home pay or payroll taxes by an equivalent amount is a wash.
Health insurance costs will not fall for American workers unless costs in the health care system are reduced. I have spent considerable time looking into this issue, and my belief is that there is no free lunch. That is, none of the usual scapegoats for health care costs -- spending on the last year of life, excess profits of suppliers, administrative overhead, malpractice lawsuits -- is quantitatively large in relation to the level of health care services that Americans consume.
The only way to bring down health care costs is to consume less in terms of health care services. That in turn will require a major cultural change. One change could be centralized rationing of health care, with supply controlled by the government. Another change would be to dampen demand by switching consumers from comprehensive health insurance to catastrophic health insurance.
In the absence of cultural change, I believe that America will continue to be the leader in Activist medicine, with heavy use of specialists and technological apparatus. Activist medicine may or may not be the right way to approach health care. But it is the reason that health care in this country consumes such a large share of our GDP.
I am in favor of getting rid of employers as the health insurance Middle Man. I believe that employer-provided health insurance is inefficient and an economic distortion. However, it is important to recognize that America's large health care bills and the competitiveness of our large firms is not going to be much affected by changing to a different system.
One in 10 Tennesseans lack health insurance
From Southern Standard
NASHVILLE (AP) — A state report shows one in 10 Tennesseans, or about 580,000 people, lack health insurance.
That number does not include the 190,000 adults being cut from TennCare in an effort to reign in the costs of the $8.7 billion public health care program.
"The mistake we made was focusing on the 1.1 million people on TennCare and ignoring all of the other Tennesseans who are uninsured," Gov. Phil Bredesen said Wednesday in a speech to hospital officials gathered for the annual Hospital Alliance of Tennessee meeting.
The percentage of uninsured Tennesseans falls slightly under the most recent estimate of the national uninsured population. The Census Bureau estimates that in 2003, about 15.5 percent of U.S. citizens did not have health insurance.
Bredesen said he wants to find a way for all of the state's residents to have access to some form of medical insurance, and says the way to pay for it is to form partnerships among the government, insurance companies, health care providers, businesses, non-profits and recipients.
The cost of providing health care to people who cannot afford it ultimately either gets passed on to the insured through higher premiums or is paid by federal and state tax money.
"I really do believe that everyone does have to pay a little something for everything," he said.
The largest portion of uninsured people work more than 40 hours a week, hold only one job and work for small private businesses, according to the report completed by the Tennessee Department of Commerce and Insurance.
Sita Diehl, executive director of the National Alliance on Mental Illness of Tennessee said many people with mental illnesses are often considered an uninsurable pre-existing condition by insurance companies.
"I know several people with mental illnesses who are very, very capable, but because of their self employment or because they work for a small business, they are not able to qualify for private insurance," she said. "They are not poor enough or disabled enough to get on TennCare, but they're out in the cold."
Twenty percent of the uninsured work for employers who offer health insurance, but nearly a quarter of those workers said they were not eligible for their employer's coverage. Of those eligible, a quarter said the benefits were too expensive.
Gordon Bonnyman, executive director of the Tennessee Justice Center and an advocate for TennCare enrollees, said that while it's important to focus on the entire uninsured population, he feels the governor has created a bigger problem with TennCare disenrollments.
Bonnyman said the cuts resulted in the state forfeiting $1.2 billion in federal funds — money that could be used to provide more coverage to Tennesseans.
"Where are you going to come up with $1.2 billion to cover people?" he said. "It's fine to say you want to focus on all the uninsured. But you've got to pay attention to the federal money."
Part of the problem is an out-of-date Medicaid structure that doesn't address the needs of the country, Bredesen said. Medicaid was created in 1965 as a way to insure needy women and children, though the program now covers more than 20 categories of economic and medical conditions.
Bredesen said Tennessee is on the leading edge of Medicaid reform, with states like Pennsylvania, Florida and others beginning major overhauls. He said the National Governors Association intends to pressure the federal government to consider major changes to Medicaid.
"I think the program is deeply unfair," Bredesen said. "Our Medicaid house has grown too much by just tacking on another room. The way we have been dealing with it is coming to the end of the rope."
Medically uninsured Tennesseans span demographics
A look at the medically uninsured population of Tennnessee:
— 51.3 percent are between the ages of 41 and 65.
— 12 percent are black
— 2.5 percent are Hispanic
— 58.4 percent have a family income of less than $30,000.
— 11.2 percent live in West Tennessee, 10 percent in Middle Tennessee and 8.7 percent in East Tennessee.
— 20 percent work for employers who offer health insurance benefits.
NASHVILLE (AP) — A state report shows one in 10 Tennesseans, or about 580,000 people, lack health insurance.
That number does not include the 190,000 adults being cut from TennCare in an effort to reign in the costs of the $8.7 billion public health care program.
"The mistake we made was focusing on the 1.1 million people on TennCare and ignoring all of the other Tennesseans who are uninsured," Gov. Phil Bredesen said Wednesday in a speech to hospital officials gathered for the annual Hospital Alliance of Tennessee meeting.
The percentage of uninsured Tennesseans falls slightly under the most recent estimate of the national uninsured population. The Census Bureau estimates that in 2003, about 15.5 percent of U.S. citizens did not have health insurance.
Bredesen said he wants to find a way for all of the state's residents to have access to some form of medical insurance, and says the way to pay for it is to form partnerships among the government, insurance companies, health care providers, businesses, non-profits and recipients.
The cost of providing health care to people who cannot afford it ultimately either gets passed on to the insured through higher premiums or is paid by federal and state tax money.
"I really do believe that everyone does have to pay a little something for everything," he said.
The largest portion of uninsured people work more than 40 hours a week, hold only one job and work for small private businesses, according to the report completed by the Tennessee Department of Commerce and Insurance.
Sita Diehl, executive director of the National Alliance on Mental Illness of Tennessee said many people with mental illnesses are often considered an uninsurable pre-existing condition by insurance companies.
"I know several people with mental illnesses who are very, very capable, but because of their self employment or because they work for a small business, they are not able to qualify for private insurance," she said. "They are not poor enough or disabled enough to get on TennCare, but they're out in the cold."
Twenty percent of the uninsured work for employers who offer health insurance, but nearly a quarter of those workers said they were not eligible for their employer's coverage. Of those eligible, a quarter said the benefits were too expensive.
Gordon Bonnyman, executive director of the Tennessee Justice Center and an advocate for TennCare enrollees, said that while it's important to focus on the entire uninsured population, he feels the governor has created a bigger problem with TennCare disenrollments.
Bonnyman said the cuts resulted in the state forfeiting $1.2 billion in federal funds — money that could be used to provide more coverage to Tennesseans.
"Where are you going to come up with $1.2 billion to cover people?" he said. "It's fine to say you want to focus on all the uninsured. But you've got to pay attention to the federal money."
Part of the problem is an out-of-date Medicaid structure that doesn't address the needs of the country, Bredesen said. Medicaid was created in 1965 as a way to insure needy women and children, though the program now covers more than 20 categories of economic and medical conditions.
Bredesen said Tennessee is on the leading edge of Medicaid reform, with states like Pennsylvania, Florida and others beginning major overhauls. He said the National Governors Association intends to pressure the federal government to consider major changes to Medicaid.
"I think the program is deeply unfair," Bredesen said. "Our Medicaid house has grown too much by just tacking on another room. The way we have been dealing with it is coming to the end of the rope."
Medically uninsured Tennesseans span demographics
A look at the medically uninsured population of Tennnessee:
— 51.3 percent are between the ages of 41 and 65.
— 12 percent are black
— 2.5 percent are Hispanic
— 58.4 percent have a family income of less than $30,000.
— 11.2 percent live in West Tennessee, 10 percent in Middle Tennessee and 8.7 percent in East Tennessee.
— 20 percent work for employers who offer health insurance benefits.
Wednesday, October 26, 2005
NC workers losing employer-based health coverage
North Carolinians are losing their employer-based health insurance faster than people in almost any other state, according to a report released yesterday.
From 2000 to 2004, the percentage of people in the state covered by health insurance from an employer fell 6.7 percentage points to 56.8 percent. That's about 559,000 fewer people.
Only Missouri, with a 7 percent drop, saw a bigger decrease.
The study was conducted by the Economic Policy Institute, a liberal policy group in Washington. It used numbers collected by the U.S. Census Bureau.
Analysts said that the drop continues a trend that began years earlier and that shows no sign of slowing down as health-care costs outpace what businesses can spend on them. North Carolina has been particularly vulnerable, they said, because of the decline in such traditional industries as furniture and textiles.
"These trends are tied to the economy, and they're tied to the economic change that we've seen in recent years," said John Quinterno, a research associate at the N.C. Budget and Tax Center, a liberal policy group in Raleigh.
"The best we can hope for is for them to stabilize," Quinterno said, "but I don't see anything on the horizon that would lead to any widespread reversal."
That doesn't mean, though, that analysts are any closer to a consensus on improving health care.
Gregg Thompson, the state director of the National Federation of Independent Business, said that the study emphasizes the need for small businesses to be able to form insurance associations with each other across state lines, an idea that Congress is considering.
The associations could lower costs by spreading risk across a larger insurance pool. They have been criticized because they would be exempt from certain state laws, such as requirements that plans cover certain tests for cancer.
On the state level, the General Assembly considered a bill this year that would give some small businesses a tax credit for offering insurance, but it never became law.
"Small businesses' conditions are good, but they're still struggling," Thompson said. "If there's some place they have to reduce their bottom line, they're going to have to look at benefits to their employees."
Adam Searing, the director of the N.C. Health Access Coalition, said that state legislators should take another look at creating a separate insurance pool for claims of more than $50,000, with the state chipping in to help pay for such claims. He has also lobbied to keep legislators from cutting Medicaid, the government program that provides health insurance for the poor.
"Policymakers need to focus on solving the health-care problems for everyone and not cutting services for the least among us," Searing said.
The study, released yesterday, also found that people in three surrounding states are more likely to receive health insurance through an employer. In Georgia, 61.2 percent of people do so; in South Carolina, 58.9 percent; and in Virginia, 64.7 percent. In Tennessee, it's 56.3 percent.
From 2000 to 2004, the percentage of people in the state covered by health insurance from an employer fell 6.7 percentage points to 56.8 percent. That's about 559,000 fewer people.
Only Missouri, with a 7 percent drop, saw a bigger decrease.
The study was conducted by the Economic Policy Institute, a liberal policy group in Washington. It used numbers collected by the U.S. Census Bureau.
Analysts said that the drop continues a trend that began years earlier and that shows no sign of slowing down as health-care costs outpace what businesses can spend on them. North Carolina has been particularly vulnerable, they said, because of the decline in such traditional industries as furniture and textiles.
"These trends are tied to the economy, and they're tied to the economic change that we've seen in recent years," said John Quinterno, a research associate at the N.C. Budget and Tax Center, a liberal policy group in Raleigh.
"The best we can hope for is for them to stabilize," Quinterno said, "but I don't see anything on the horizon that would lead to any widespread reversal."
That doesn't mean, though, that analysts are any closer to a consensus on improving health care.
Gregg Thompson, the state director of the National Federation of Independent Business, said that the study emphasizes the need for small businesses to be able to form insurance associations with each other across state lines, an idea that Congress is considering.
The associations could lower costs by spreading risk across a larger insurance pool. They have been criticized because they would be exempt from certain state laws, such as requirements that plans cover certain tests for cancer.
On the state level, the General Assembly considered a bill this year that would give some small businesses a tax credit for offering insurance, but it never became law.
"Small businesses' conditions are good, but they're still struggling," Thompson said. "If there's some place they have to reduce their bottom line, they're going to have to look at benefits to their employees."
Adam Searing, the director of the N.C. Health Access Coalition, said that state legislators should take another look at creating a separate insurance pool for claims of more than $50,000, with the state chipping in to help pay for such claims. He has also lobbied to keep legislators from cutting Medicaid, the government program that provides health insurance for the poor.
"Policymakers need to focus on solving the health-care problems for everyone and not cutting services for the least among us," Searing said.
The study, released yesterday, also found that people in three surrounding states are more likely to receive health insurance through an employer. In Georgia, 61.2 percent of people do so; in South Carolina, 58.9 percent; and in Virginia, 64.7 percent. In Tennessee, it's 56.3 percent.
NewType Of Health Insurance Shifts Responsibility To Consumers
By RITU KALRA, Courant Staff Writer
Insurance experts, academics, policy advocates and officials gathered in Hartford Tuesday to discuss a new, but controversial breed of health insurance that shifts responsibility for managing health care expenses to patients.
Called consumer-driven health plans, the insurance combines steep deductibles with special savings accounts that can be used to pay for medical costs with pretax dollars. The idea is that by becoming more exposed to the financial implications of their health care choices, patients will become savvy consumers who scour for bargains, helping to stem ballooning costs.
But according to the panel of experts gathered Tuesday, the new plans will do little to restrain health care costs while shifting an undue burden to those with chronic medical problems. And they add an extra layer of complexity to an already complicated field without giving patients appropriate tools to make smart decisions.
"I'm not even sure why we call it consumer-driven," said Mila Kofman, a health policy professor at Georgetown University and one of the featured speakers at the forum, which was sponsored jointly by the Connecticut Insurance Department, the Office of the Healthcare Advocate and the Connecticut Health Policy Project.
"Most employers will tell you it's a way to limit their financial exposure. That means consumers are on the hook for more of their medical care."
For some, the new plans offer considerable advantages over traditional health coverage. In exchange for steep deductibles - which average $1,901 for individuals and $4,070 annually for families - premiums are about one-third lower than with traditional insurance, according to a study by the Kaiser Family Foundation and the Health Research and Educational Trust.
The plans offer a special health savings account that employees can fund, tax-free, to help offset the deductible.
About two-thirds of employers also contribute to health savings accounts, although they are not obligated to do so. Unlike more familiar flexible spending accounts, which many employers currently offer, the money in HSAs can move with employees from job to job, and can be rolled over from year to year.
Money spent for approved medical expenses is not taxed.
"HSAs are the most tax-efficient financial vehicle available anywhere," said John C. Parker, a Niantic-based insurance broker who was also a member of the panel. "Entrepreneurs who can't afford traditional insurance love them. Instantly they see that it's a great way to get coverage."
But panel members also said the new plans shortchange those who need quality coverage the most - the chronically ill and low-income workers who cannot afford traditional insurance.
Once HSA funds are spent, patients must pay the full cost of their care up to the deductible, and often a 10 percent or 20 percent co-insurance payment beyond that.
Those who are attracted to HSAs because of their lower premiums may not be able to afford the steep deductibles.
About 29 percent of HSA buyers have annual incomes of less than $50,000, according to a survey by Assurant Health, which sells the plans.
Decisions by lower-income workers to put off critical preventive care could come back to haunt them later and drive up costs to the entire system.
"For someone making $8 an hour who really can't afford the $2,000 deductible, she may not get the MRI she really needs. Or some other critical test. This is going to be the HMO story from a few years ago," said Edward Kaplan, senior vice president and director of the national health practice at Segal Co., a benefits consulting firm. Kaplan was not a member of Tuesday's panel.
"It's a mixed bag," Kaplan said. "It doesn't solve the critical problem of why health care costs are going up at triple the rate of inflation. And is it really making a dent in hospital costs? The jury's still out on that one."
Consumer-driven health plans could also fundamentally change the way risk is allocated among the insured. Because they make less sense for those with chronic medical conditions, policy analysts fear that only the healthy will choose the new plans.
That could further accelerate increases in the premiums for traditional coverage because the overall cost of care would be spread over a sicker population.
Although early research suggests that the plans do cause consumers to become more engaged in managing health care costs, they don't always have access to the critical information about costs and quality that they need to become savvy shoppers.
Yet decisions about health care coverage are exactly what millions of workers are making this month as they enter open enrollment season to choose next year's benefits.
About 20 percent of large employers offered high-deductible plans this year, according to the Kaiser Family Foundation, and that number is poised to grow.
"It's so complicated now. Employees really have to spend time looking at what employers are offering them to make a wise decision. Making a bad decision could cost a lot of money," Kaplan said.
Insurance experts, academics, policy advocates and officials gathered in Hartford Tuesday to discuss a new, but controversial breed of health insurance that shifts responsibility for managing health care expenses to patients.
Called consumer-driven health plans, the insurance combines steep deductibles with special savings accounts that can be used to pay for medical costs with pretax dollars. The idea is that by becoming more exposed to the financial implications of their health care choices, patients will become savvy consumers who scour for bargains, helping to stem ballooning costs.
But according to the panel of experts gathered Tuesday, the new plans will do little to restrain health care costs while shifting an undue burden to those with chronic medical problems. And they add an extra layer of complexity to an already complicated field without giving patients appropriate tools to make smart decisions.
"I'm not even sure why we call it consumer-driven," said Mila Kofman, a health policy professor at Georgetown University and one of the featured speakers at the forum, which was sponsored jointly by the Connecticut Insurance Department, the Office of the Healthcare Advocate and the Connecticut Health Policy Project.
"Most employers will tell you it's a way to limit their financial exposure. That means consumers are on the hook for more of their medical care."
For some, the new plans offer considerable advantages over traditional health coverage. In exchange for steep deductibles - which average $1,901 for individuals and $4,070 annually for families - premiums are about one-third lower than with traditional insurance, according to a study by the Kaiser Family Foundation and the Health Research and Educational Trust.
The plans offer a special health savings account that employees can fund, tax-free, to help offset the deductible.
About two-thirds of employers also contribute to health savings accounts, although they are not obligated to do so. Unlike more familiar flexible spending accounts, which many employers currently offer, the money in HSAs can move with employees from job to job, and can be rolled over from year to year.
Money spent for approved medical expenses is not taxed.
"HSAs are the most tax-efficient financial vehicle available anywhere," said John C. Parker, a Niantic-based insurance broker who was also a member of the panel. "Entrepreneurs who can't afford traditional insurance love them. Instantly they see that it's a great way to get coverage."
But panel members also said the new plans shortchange those who need quality coverage the most - the chronically ill and low-income workers who cannot afford traditional insurance.
Once HSA funds are spent, patients must pay the full cost of their care up to the deductible, and often a 10 percent or 20 percent co-insurance payment beyond that.
Those who are attracted to HSAs because of their lower premiums may not be able to afford the steep deductibles.
About 29 percent of HSA buyers have annual incomes of less than $50,000, according to a survey by Assurant Health, which sells the plans.
Decisions by lower-income workers to put off critical preventive care could come back to haunt them later and drive up costs to the entire system.
"For someone making $8 an hour who really can't afford the $2,000 deductible, she may not get the MRI she really needs. Or some other critical test. This is going to be the HMO story from a few years ago," said Edward Kaplan, senior vice president and director of the national health practice at Segal Co., a benefits consulting firm. Kaplan was not a member of Tuesday's panel.
"It's a mixed bag," Kaplan said. "It doesn't solve the critical problem of why health care costs are going up at triple the rate of inflation. And is it really making a dent in hospital costs? The jury's still out on that one."
Consumer-driven health plans could also fundamentally change the way risk is allocated among the insured. Because they make less sense for those with chronic medical conditions, policy analysts fear that only the healthy will choose the new plans.
That could further accelerate increases in the premiums for traditional coverage because the overall cost of care would be spread over a sicker population.
Although early research suggests that the plans do cause consumers to become more engaged in managing health care costs, they don't always have access to the critical information about costs and quality that they need to become savvy shoppers.
Yet decisions about health care coverage are exactly what millions of workers are making this month as they enter open enrollment season to choose next year's benefits.
About 20 percent of large employers offered high-deductible plans this year, according to the Kaiser Family Foundation, and that number is poised to grow.
"It's so complicated now. Employees really have to spend time looking at what employers are offering them to make a wise decision. Making a bad decision could cost a lot of money," Kaplan said.
Even Vermonters with insurance are worried
Published: Wednesday, October 26, 2005
By Nancy Remsen
Free Press Staff Writer
MONTPELIER -- While Vermonters enjoy one of the highest rates of health insurance coverage in the nation -- 88 percent -- a newly released poll suggests many people with insurance worry how they will pay for increasingly expensive coverage and medical care in the future.
That future is now for Hans and Susan Ohanian of Charlotte. The two freelance writers spend almost $4,000 a year for health insurance policies that require each of them to pay $10,000 out of pocket before their coverage begins.
"You have to think long and hard before going to the doctor," Susan Ohanian said. "My husband is supposed to have open heart surgery," she added. "We are holding off until he is 65, about a year from now." That's when his hospital care will be covered by the federal government's Medicare program.
Two-thirds of the 1,000 Vermonters surveyed in June for the Vermont chapter of the AARP said they strongly agreed everyone in the state should have access to the same basic medical coverage. The poll didn't define what that basic coverage would include.
Just more than half the respondents also strongly endorsed the concept that everyone -- employers, employees and the government -- should help pay for a system of basic coverage.
The poll suggests the public has high expectations for the Legislature, controlled by Democrats, and the Republican Douglas administration as they prepare health reform proposals for this winter's legislative session, said Greg Marchildon, state director of AARP Vermont. The poll showed a majority of voters would hold policy-makers accountable in the next election, he said.
Fifty-nine percent of respondents said they would favor future candidates who support a system that provides all Vermonters with basic health insurance.
"People are paying closer attention to this than they were a year ago," Marchildon said. "They are really interested in seeing the job get done."
National polls taken over the last 50 years show that the public strongly supports providing everyone with access to medical care, according to Robert Blendon, a professor of health policy at Harvard School of Public Health. "What you have is a deep commitment to the principle that people should be able to get the care they need."
Repeatedly, however, public support for universal access to health care eroded when people considered the personal trade-offs they would have to accept to change the current system, such as increased cost or waiting lists for care, Blendon said.
Marchildon admitted the AARP poll didn't answer the question of whether Vermonters could get by this long-standing stumbling block to health reform. "I think the survey indicates they are willing to be part of the financing," he said, "but they want to see what that means."
John Luehrs, AARP's national coordinator for health and long-term care, joined Marchildon on Tuesday to release the poll results. He suggested the health reform debate was shifting from being only about how to help the uninsured to how to fix the system to help everyone.
"People who are insured are scared," Luehrs said. "I think the drive for health-care reform will have its impetus from those who are insured but scared."
AARP Vermont has launched a campaign to help its members, age 50 and older, and the younger public, become involved in the debate. The first step was a mass mailing to 41,000 households to recruit "health care activists."
"Our role here is to serve as a catalyst and a reminder to the governor and the Legislature that working together is the only way to get this done," Marchildon said. "We are watching. We are watching closely."
Gov. Jim Douglas had yet to see the AARP poll data, but said he wasn't surprised it showed Vermonters with insurance worried about the cost of coverage. "Premiums have been rising so much." He noted his strategy has always been to try to lower costs for those without insurance and those with coverage.
Democratic House Speaker Gaye Symington of Jericho was briefed about the survey. She said the results confirmed some principles that should guide policy-makers this winter: that everyone should have access to basic health coverage and everyone should contribute.
The poll leaves open how to achieve these principles, Symington said. "I don't take away from this any recipe for change," she said of the poll, adding, "I wouldn't underestimate the amount of work left to policy-makers in order to make progress."
Contact Nancy Remsen at 229-9141 or nremsen@bfp.burlingtonfreepress.com
AARP poll AARP Vermont polled 1,000 Vermonters to determine their health care preferences. Among the responses were: Despite a low rate of uninsured, the poll showed many Vermonters with insurance have worries about the state of health care in Vermont:
8 percent see a crisis
40 percent see major problems
37 percent see minor problems
6 percent see no problems
8 percent didn't know
1 percent refused to answer Should all Vermonters have access to the same basic health care coverage?:
66 percent strongly agreed
20 percent somewhat agreed
3 percent neutral
5 percent somewhat disagreed
4 percent strongly disagreed
1 percent didn't know Should everyone -- employers, employees and the government -- contribute to basic health care coverage?:
52 percent strongly agreed
24 percent somewhat agreed
3 percent neutral
9 percent disagreed
7 percent strongly disagreed
3 percent didn't know
1 percent refused to answer
Regarding the likelihood of voting for a candidate who suppports a system giving basic coverage to all Vermonters:
59 percent more likely to favor such a candidate
26 percent said it wouldn't make a difference
8 percent less likely
6 percent didn't know
1 percent refused to answer To see the full report go to: http://www.aarp.org/research/health/privinsurance/vt_coverage.html
By Nancy Remsen
Free Press Staff Writer
MONTPELIER -- While Vermonters enjoy one of the highest rates of health insurance coverage in the nation -- 88 percent -- a newly released poll suggests many people with insurance worry how they will pay for increasingly expensive coverage and medical care in the future.
That future is now for Hans and Susan Ohanian of Charlotte. The two freelance writers spend almost $4,000 a year for health insurance policies that require each of them to pay $10,000 out of pocket before their coverage begins.
"You have to think long and hard before going to the doctor," Susan Ohanian said. "My husband is supposed to have open heart surgery," she added. "We are holding off until he is 65, about a year from now." That's when his hospital care will be covered by the federal government's Medicare program.
Two-thirds of the 1,000 Vermonters surveyed in June for the Vermont chapter of the AARP said they strongly agreed everyone in the state should have access to the same basic medical coverage. The poll didn't define what that basic coverage would include.
Just more than half the respondents also strongly endorsed the concept that everyone -- employers, employees and the government -- should help pay for a system of basic coverage.
The poll suggests the public has high expectations for the Legislature, controlled by Democrats, and the Republican Douglas administration as they prepare health reform proposals for this winter's legislative session, said Greg Marchildon, state director of AARP Vermont. The poll showed a majority of voters would hold policy-makers accountable in the next election, he said.
Fifty-nine percent of respondents said they would favor future candidates who support a system that provides all Vermonters with basic health insurance.
"People are paying closer attention to this than they were a year ago," Marchildon said. "They are really interested in seeing the job get done."
National polls taken over the last 50 years show that the public strongly supports providing everyone with access to medical care, according to Robert Blendon, a professor of health policy at Harvard School of Public Health. "What you have is a deep commitment to the principle that people should be able to get the care they need."
Repeatedly, however, public support for universal access to health care eroded when people considered the personal trade-offs they would have to accept to change the current system, such as increased cost or waiting lists for care, Blendon said.
Marchildon admitted the AARP poll didn't answer the question of whether Vermonters could get by this long-standing stumbling block to health reform. "I think the survey indicates they are willing to be part of the financing," he said, "but they want to see what that means."
John Luehrs, AARP's national coordinator for health and long-term care, joined Marchildon on Tuesday to release the poll results. He suggested the health reform debate was shifting from being only about how to help the uninsured to how to fix the system to help everyone.
"People who are insured are scared," Luehrs said. "I think the drive for health-care reform will have its impetus from those who are insured but scared."
AARP Vermont has launched a campaign to help its members, age 50 and older, and the younger public, become involved in the debate. The first step was a mass mailing to 41,000 households to recruit "health care activists."
"Our role here is to serve as a catalyst and a reminder to the governor and the Legislature that working together is the only way to get this done," Marchildon said. "We are watching. We are watching closely."
Gov. Jim Douglas had yet to see the AARP poll data, but said he wasn't surprised it showed Vermonters with insurance worried about the cost of coverage. "Premiums have been rising so much." He noted his strategy has always been to try to lower costs for those without insurance and those with coverage.
Democratic House Speaker Gaye Symington of Jericho was briefed about the survey. She said the results confirmed some principles that should guide policy-makers this winter: that everyone should have access to basic health coverage and everyone should contribute.
The poll leaves open how to achieve these principles, Symington said. "I don't take away from this any recipe for change," she said of the poll, adding, "I wouldn't underestimate the amount of work left to policy-makers in order to make progress."
Contact Nancy Remsen at 229-9141 or nremsen@bfp.burlingtonfreepress.com
AARP poll AARP Vermont polled 1,000 Vermonters to determine their health care preferences. Among the responses were: Despite a low rate of uninsured, the poll showed many Vermonters with insurance have worries about the state of health care in Vermont:
8 percent see a crisis
40 percent see major problems
37 percent see minor problems
6 percent see no problems
8 percent didn't know
1 percent refused to answer Should all Vermonters have access to the same basic health care coverage?:
66 percent strongly agreed
20 percent somewhat agreed
3 percent neutral
5 percent somewhat disagreed
4 percent strongly disagreed
1 percent didn't know Should everyone -- employers, employees and the government -- contribute to basic health care coverage?:
52 percent strongly agreed
24 percent somewhat agreed
3 percent neutral
9 percent disagreed
7 percent strongly disagreed
3 percent didn't know
1 percent refused to answer
Regarding the likelihood of voting for a candidate who suppports a system giving basic coverage to all Vermonters:
59 percent more likely to favor such a candidate
26 percent said it wouldn't make a difference
8 percent less likely
6 percent didn't know
1 percent refused to answer To see the full report go to: http://www.aarp.org/research/health/privinsurance/vt_coverage.html
Tuesday, October 25, 2005
Study: More North Carolina workers lack health insurance
From Triangle Business Journal
Fewer North Carolina workers have health insurance through their jobs, according to a new study released Tuesday.
The report, Prognosis Worsens for Workers' Health Care, published by the Washington, D.C.-based Economic Policy Institute, found that the proportion of North Carolinians with job-based health insurance fell by 6.7 percent between 2000 and 2004.
In raw numbers, it means 559,000 fewer North Carolinians get health insurance in 2004 through their employer or their spouse's employer than in 2000.
"This dramatic decline in job-based health insurance has contributed directly to the growth in the state's Medicaid caseload and the surge in the ranks of the uninsured," says Adam Searing, director of the North Carolina Health Access Coalition. "Clearly we have a health-care crisis, not a Medicaid crisis."
Nationally, the study found that 3.7 million fewer Americans had job-based health insurance in 2004 than in 2000. Middle class workers earning between $45,000 and $67,000 a year had the sharpest decline in job-based insurance, and fewer than six in 10 children were covered through employer-sponsored health plans in 2004.
The study also found that more North Carolinians per capita - 16.5 percent - lack health insurance compared to 15.7 percent of all Americans.
Fewer North Carolina workers have health insurance through their jobs, according to a new study released Tuesday.
The report, Prognosis Worsens for Workers' Health Care, published by the Washington, D.C.-based Economic Policy Institute, found that the proportion of North Carolinians with job-based health insurance fell by 6.7 percent between 2000 and 2004.
In raw numbers, it means 559,000 fewer North Carolinians get health insurance in 2004 through their employer or their spouse's employer than in 2000.
"This dramatic decline in job-based health insurance has contributed directly to the growth in the state's Medicaid caseload and the surge in the ranks of the uninsured," says Adam Searing, director of the North Carolina Health Access Coalition. "Clearly we have a health-care crisis, not a Medicaid crisis."
Nationally, the study found that 3.7 million fewer Americans had job-based health insurance in 2004 than in 2000. Middle class workers earning between $45,000 and $67,000 a year had the sharpest decline in job-based insurance, and fewer than six in 10 children were covered through employer-sponsored health plans in 2004.
The study also found that more North Carolinians per capita - 16.5 percent - lack health insurance compared to 15.7 percent of all Americans.
Consumer Guide to Auto Insurance
News from NYS Insurance Dept.
NEW YORK -- (10/24/2005; 1200)(EIS) -- Superintendent of Insurance Howard Mills today announced that the 2005 Consumer Guide to Automobile Insurance is now available online and in hard-copy form. With New Yorkers enjoying unprecedented auto rate decreases over the past year, the state Insurance Department's annual Consumer Guide is aimed at ensuring that drivers are getting the most for their premium dollar.
The Guide outlines mandatory coverages, such as bodily injury liability and personal injury protection, as well as optional coverages, like comprehensive (i.e., fire and theft), available in New York State and offers practical money-saving tips. Sample auto insurance rates from various New York territories as of July 1, 2005 are also included in the text so drivers can make meaningful comparisons.
"As auto rates continue to decline in New York State, it is important that New York's drivers read the Department's current Consumer Guide to Automobile Insurance," Superintendent Mills said. "The Guide offers an excellent overview of typical premium rates in different parts of the state."
The publication is available online through the Department's Web site: www.ins.state.ny.us. A hard-copy version of the Guide can be acquired free of charge by those without Internet access by calling 1-800-342-3736.
"With nearly 200 state-licensed auto insurers competing for your business, drivers owe it to themselves and their families to shop around for the best coverage at the best price," Superintendent Mills stated. "The overwhelming majority of New York drivers will be saving money on their auto insurance this year. Make sure you are one of them."
Besides listing sample auto premium rates and offering drivers valuable consumer advice, the Guide also features a list of state-licensed auto insurers and their telephone numbers, and information on the extent to which auto insurers can use an applicant driver's credit data.
NEW YORK -- (10/24/2005; 1200)(EIS) -- Superintendent of Insurance Howard Mills today announced that the 2005 Consumer Guide to Automobile Insurance is now available online and in hard-copy form. With New Yorkers enjoying unprecedented auto rate decreases over the past year, the state Insurance Department's annual Consumer Guide is aimed at ensuring that drivers are getting the most for their premium dollar.
The Guide outlines mandatory coverages, such as bodily injury liability and personal injury protection, as well as optional coverages, like comprehensive (i.e., fire and theft), available in New York State and offers practical money-saving tips. Sample auto insurance rates from various New York territories as of July 1, 2005 are also included in the text so drivers can make meaningful comparisons.
"As auto rates continue to decline in New York State, it is important that New York's drivers read the Department's current Consumer Guide to Automobile Insurance," Superintendent Mills said. "The Guide offers an excellent overview of typical premium rates in different parts of the state."
The publication is available online through the Department's Web site: www.ins.state.ny.us. A hard-copy version of the Guide can be acquired free of charge by those without Internet access by calling 1-800-342-3736.
"With nearly 200 state-licensed auto insurers competing for your business, drivers owe it to themselves and their families to shop around for the best coverage at the best price," Superintendent Mills stated. "The overwhelming majority of New York drivers will be saving money on their auto insurance this year. Make sure you are one of them."
Besides listing sample auto premium rates and offering drivers valuable consumer advice, the Guide also features a list of state-licensed auto insurers and their telephone numbers, and information on the extent to which auto insurers can use an applicant driver's credit data.
Health insurance for $25
Wal-Mart Stores Inc., the nation's largest employer, is making lower-cost health insurance more widely available to its workers, a move that could affect the market for workplace health coverage across the country.
On Monday, the Arkansas retail giant introduced its new Value Plan, which comes in several variations. The company, which says its move is a response to the needs of its workers, will make the plan available to workers for an average of $25 per month. In some regions, it will be as little as $11 for individuals.
Wal-Mart has long been slammed for what union leaders and others say are the scanty health benefits it provides its 1.2 million U.S. workers.
The new initiative might not quiet those voices. The company's critics say Wal-Mart's plan comes with high deductibles, provides inadequate coverage and could encourage other large employers to reduce the quality of insurance they offer.
Wal-Mart's new coverage is an example of a growing trend among employers to lower insurance costs by offering plans that have affordable premiums but put a substantial burden on employees for paying medical costs.
"Wal-Mart has a tremendous effect on the market. What they do is looked at very closely by Wall Street and very closely by other companies," said Ken Jacobs, deputy chairman of the UC Berkeley Center for Labor Research and Education. "I suspect we'll see other companies follow their lead."
The debate over Wal-Mart's health coverage highlights a growing problem that U.S. companies face in maintaining their competitive position in the global marketplace, said Christopher Ohman, president of the California Association of Health Plans.
"Larger businesses that are exposed to severe price competition are limited in what they can pay for health care by the prices they can get for their products," he said. "This creates a particularly challenging problem for companies that rely on low-wage workers."
Ohman said health care woes are not going to be solved by businesses alone, and need to be addressed by public policymakers.
Increases in health care costs in recent years have been particularly tough on lower-wage workers, who account for many of the country's 45 million uninsured. An increase in the number of companies that do not offer health insurance or offer inadequate coverage is blamed in part for growing ranks of workers and their dependents on government programs such as Medi-Cal and Healthy Families.
Wal-Mart's new insurance will begin Jan. 1 and will cost its workers between 40 and 60 percent less than current options, the company said.
The new plan offers workers three doctor visits without having to pay a deductible, a feature that is designed both to encourage preventive care and appeal to people who rarely see their doctor. A $20 copayment for each visit is required.
One version of the plan will for the first time offer Wal-Mart workers health savings accounts, new tax-deductible savings plans linked to high-deductible health insurance policies that the Bush administration is promoting as a key approach to rising insurance costs.
But Value Plan still comes with cost-sharing features that could be significant for Wal-Mart employees, who reportedly earn about $19,000 a year. Deductibles are $1,000 for individuals and $3,000 for families, with "secondary" deductibles for pharmacy and hospitalization costs that do not count toward the primary sum.
The plan has a $25,000 cap for the first year of coverage, which is lifted in the second year. And only some workers in the South and Southeast will see an $11 premium. Most workers will pay about $25 for individual health insurance and $65 to cover a family.
Wal-Mart spokesman Dan Fogelman said the new plan is just one of many options the company offers its employees and it may not be the best choice for someone with ongoing medical expenses.
"Certainly it is a plan people will want to evaluate closely against their medical needs and against their financial priorities," he said.
Wake-Up Wal-Mart, a group formed by the United Food and Commercial Workers International Union, called Value Plan a publicity stunt.
"They basically repackaged their old bad plan and had their PR firm put a nice new name on it," spokesman Paul Blank said.
Jacobs of UC Berkeley, co-author of a paper titled "Hidden Cost of Wal-Mart Jobs," said increased popularity of high-deductible plans such like Wal-Mart's could reduce the number of uninsured, but increase the number of "underinsured" -- people who have insurance, but with large cost-sharing or coverage gaps.
"A large number of people will still go back to public hospitals and other public services to gain care when they discover the plans they have don't cover them," Jacobs said.
Wal-Mart has not changed its health insurance eligibility requirements, which critics say is one of the reasons less than half of the company's workforce has its coverage. Employees have to work 180 days, or about six months, before becoming eligible. Most Americans have to wait about three months.
--------------------------------------------------------------------------------
Wal-Mart's new health plan
-- Lowers health insurance premiums to an average of $25 for an individual, $65 for a family and $37 for a single parent.
-- Imposes deductibles of $1,000 for an individual and $3,000 for a family.
-- Pays most benefits at 80 percent of covered charges.
-- Caps payouts at $25,000 per person during the first year of coverage.
On Monday, the Arkansas retail giant introduced its new Value Plan, which comes in several variations. The company, which says its move is a response to the needs of its workers, will make the plan available to workers for an average of $25 per month. In some regions, it will be as little as $11 for individuals.
Wal-Mart has long been slammed for what union leaders and others say are the scanty health benefits it provides its 1.2 million U.S. workers.
The new initiative might not quiet those voices. The company's critics say Wal-Mart's plan comes with high deductibles, provides inadequate coverage and could encourage other large employers to reduce the quality of insurance they offer.
Wal-Mart's new coverage is an example of a growing trend among employers to lower insurance costs by offering plans that have affordable premiums but put a substantial burden on employees for paying medical costs.
"Wal-Mart has a tremendous effect on the market. What they do is looked at very closely by Wall Street and very closely by other companies," said Ken Jacobs, deputy chairman of the UC Berkeley Center for Labor Research and Education. "I suspect we'll see other companies follow their lead."
The debate over Wal-Mart's health coverage highlights a growing problem that U.S. companies face in maintaining their competitive position in the global marketplace, said Christopher Ohman, president of the California Association of Health Plans.
"Larger businesses that are exposed to severe price competition are limited in what they can pay for health care by the prices they can get for their products," he said. "This creates a particularly challenging problem for companies that rely on low-wage workers."
Ohman said health care woes are not going to be solved by businesses alone, and need to be addressed by public policymakers.
Increases in health care costs in recent years have been particularly tough on lower-wage workers, who account for many of the country's 45 million uninsured. An increase in the number of companies that do not offer health insurance or offer inadequate coverage is blamed in part for growing ranks of workers and their dependents on government programs such as Medi-Cal and Healthy Families.
Wal-Mart's new insurance will begin Jan. 1 and will cost its workers between 40 and 60 percent less than current options, the company said.
The new plan offers workers three doctor visits without having to pay a deductible, a feature that is designed both to encourage preventive care and appeal to people who rarely see their doctor. A $20 copayment for each visit is required.
One version of the plan will for the first time offer Wal-Mart workers health savings accounts, new tax-deductible savings plans linked to high-deductible health insurance policies that the Bush administration is promoting as a key approach to rising insurance costs.
But Value Plan still comes with cost-sharing features that could be significant for Wal-Mart employees, who reportedly earn about $19,000 a year. Deductibles are $1,000 for individuals and $3,000 for families, with "secondary" deductibles for pharmacy and hospitalization costs that do not count toward the primary sum.
The plan has a $25,000 cap for the first year of coverage, which is lifted in the second year. And only some workers in the South and Southeast will see an $11 premium. Most workers will pay about $25 for individual health insurance and $65 to cover a family.
Wal-Mart spokesman Dan Fogelman said the new plan is just one of many options the company offers its employees and it may not be the best choice for someone with ongoing medical expenses.
"Certainly it is a plan people will want to evaluate closely against their medical needs and against their financial priorities," he said.
Wake-Up Wal-Mart, a group formed by the United Food and Commercial Workers International Union, called Value Plan a publicity stunt.
"They basically repackaged their old bad plan and had their PR firm put a nice new name on it," spokesman Paul Blank said.
Jacobs of UC Berkeley, co-author of a paper titled "Hidden Cost of Wal-Mart Jobs," said increased popularity of high-deductible plans such like Wal-Mart's could reduce the number of uninsured, but increase the number of "underinsured" -- people who have insurance, but with large cost-sharing or coverage gaps.
"A large number of people will still go back to public hospitals and other public services to gain care when they discover the plans they have don't cover them," Jacobs said.
Wal-Mart has not changed its health insurance eligibility requirements, which critics say is one of the reasons less than half of the company's workforce has its coverage. Employees have to work 180 days, or about six months, before becoming eligible. Most Americans have to wait about three months.
--------------------------------------------------------------------------------
Wal-Mart's new health plan
-- Lowers health insurance premiums to an average of $25 for an individual, $65 for a family and $37 for a single parent.
-- Imposes deductibles of $1,000 for an individual and $3,000 for a family.
-- Pays most benefits at 80 percent of covered charges.
-- Caps payouts at $25,000 per person during the first year of coverage.
Monday, October 24, 2005
eHealthInsurance Has America Asking 'Am I Covered?
MOUNTAIN VIEW, Calif., Oct. 24 /PRNewswire/ -- eHealthInsurance has teamed with award-winning Hollywood producers to create original web-based entertainment programming to increase consumer awareness of the important subject of health insurance. The innovative campaign will reach a broad online consumer market with humor and information. It was launched today from its new interactive and humor-rich Web site, www.amicovered.com.
The company has enlisted the talents of top artists and producers from shows such as The Simpsons, King of the Hill, Dilbert TV series and Ren and Stimpy. Working with TrueLight Entertainment, they are creating and developing an animated series that will appeal to Americans through offbeat, yet identifiable characters and humorous mishaps.
The "Am I Covered" animated series will showcase "the Wyndales," a lovable, yet klutzy family with whom all Americans can identify. Led by Percy Wyndale, family patriarch and certified klutz, the (mis)adventures of the Wyndale family will give new meaning to the old adage, "laughter is the best medicine."
"Many Americans simply are unaware of the availability and affordability of health insurance and ignore the fact that their good health today could quickly change tomorrow," said Gary Lauer, CEO of eHealthInsurance. "For those who are uninsured, that could be a very surprising, expensive, and even dangerous situation if they have to ask 'Am I Covered?' when an unexpected accident or illness befalls them."
The largest segment of the 45.8 million uninsured in the U.S. consists of people from 18 - 34 years of age. To reach them, eHealthInsurance will use an innovative marketing campaign that includes the distribution of a series of edgy, humorous webisodes using viral marketing and the new, email-based form of the traditional "you tell two people and they tell two people ... " word-of-mouth approach. The campaign also includes an interactive game and a contest that will enable individuals to design their own animated "mishap" online. All of these elements are hosted on www.amicovered.com.
"People are being bombarded from every side by a cacophony of messages," said Rusty Robertson, Partner of RSA, the marketing agency that created the 'Am I Covered' campaign. "To break through and reach people, and especially the uninsured that believe they can live without insurance, we are taking a fresh approach to grabbing their attention."
About eHealthInsurance
Since its founding in 1997, eHealth, Inc. (www.ehealthinsurance.com) has become the nation's leading source of health insurance for individuals, families and small businesses. The company sells health insurance in all 50 states, and offers more than 6,500 plans underwritten by more than 140 of the nation's leading health insurance companies. The company is headquartered in Mountain View, California.
The company has enlisted the talents of top artists and producers from shows such as The Simpsons, King of the Hill, Dilbert TV series and Ren and Stimpy. Working with TrueLight Entertainment, they are creating and developing an animated series that will appeal to Americans through offbeat, yet identifiable characters and humorous mishaps.
The "Am I Covered" animated series will showcase "the Wyndales," a lovable, yet klutzy family with whom all Americans can identify. Led by Percy Wyndale, family patriarch and certified klutz, the (mis)adventures of the Wyndale family will give new meaning to the old adage, "laughter is the best medicine."
"Many Americans simply are unaware of the availability and affordability of health insurance and ignore the fact that their good health today could quickly change tomorrow," said Gary Lauer, CEO of eHealthInsurance. "For those who are uninsured, that could be a very surprising, expensive, and even dangerous situation if they have to ask 'Am I Covered?' when an unexpected accident or illness befalls them."
The largest segment of the 45.8 million uninsured in the U.S. consists of people from 18 - 34 years of age. To reach them, eHealthInsurance will use an innovative marketing campaign that includes the distribution of a series of edgy, humorous webisodes using viral marketing and the new, email-based form of the traditional "you tell two people and they tell two people ... " word-of-mouth approach. The campaign also includes an interactive game and a contest that will enable individuals to design their own animated "mishap" online. All of these elements are hosted on www.amicovered.com.
"People are being bombarded from every side by a cacophony of messages," said Rusty Robertson, Partner of RSA, the marketing agency that created the 'Am I Covered' campaign. "To break through and reach people, and especially the uninsured that believe they can live without insurance, we are taking a fresh approach to grabbing their attention."
About eHealthInsurance
Since its founding in 1997, eHealth, Inc. (www.ehealthinsurance.com) has become the nation's leading source of health insurance for individuals, families and small businesses. The company sells health insurance in all 50 states, and offers more than 6,500 plans underwritten by more than 140 of the nation's leading health insurance companies. The company is headquartered in Mountain View, California.
When Health Insurance Is Not a Safeguard
CAMBY, Ind. - Until the fourth trip to the hospital in 1998, Zachery Dorsett's parents thought their son was an average child who was having trouble getting over a passing illness. He was 7 months old, and it was his second case of pneumonia.
The Dorsetts, Sharon and Arnold, were concerned about Zachery's health, but they were not worried about the financial consequences. They were a young, middle-income couple, with health insurance that covered 90 percent of doctors' bills and most of the costs of prescription drugs.
Then the bills started coming in. After a week in the hospital, the couple's share came to $1,100 - not catastrophic, but more than their small savings. They enrolled in a 90-day payment plan with the hospital and struggled to make the monthly installments of nearly $400, hoping that they did not hit any other expenses.
But Zachery, who was eventually found to have an immune system disorder, kept getting sick, and the expense of his treatment - fees for tests, hospitalizations, medicine - kept mounting, eventually costing the family $12,000 to $20,000 a year. Earlier this year, the Dorsetts stopped making mortgage payments on their ranch house, in a subdivision outside Indianapolis, because they could not afford them. In March, they filed for bankruptcy.
"Zach was really mad at us when we told him we were going to lose the house," Mrs. Dorsett said. "We told him we had to make a choice: whether to pay for medical bills or the house."
She added: "I didn't want the kids to hate their father for working all the time, but I also didn't want them to think we were irresponsible. I was worried about Zach feeling guilty or his sister blaming him that she has to leave her friends. But whatever we gave up is a small price to pay for his health."
Never have patients had so many medical options to extend, enrich or alter their lives. But these new options are expensive, and with them has come a change for which many Americans - even those with health insurance - are financially ill prepared.
After decades in which private and government insurance covered a progressively larger share of medical expenses, insurance companies are now shifting more costs to consumers, in the form of much higher deductibles, co-payments or premiums. At the same time, Americans are saving less and carrying higher levels of household debt, and even insured families are exposed to medical expenses that did not exist a decade ago. Many, like the Dorsetts, do not realize how vulnerable they are until the bills arrive.
Lawyers and accountants say that for the more than 1.5 million American families who filed for bankruptcy protection last year, the most common causes were job loss and medical expenses. New bankruptcy legislation, which went into effect Oct. 17, requires middle-income debtors to repay a greater share of their debt.
The Fight for Solvency
The Dorsetts' filing came after years of accumulating relatively modest bills, often just co-payments on doctor visits or prescriptions. Almost since Zachery's birth, they had finished each year with more credit card debt than they had the year before. Even when they took out a second mortgage to pay off their credit cards, by the end of the year they were in debt again, with higher mortgage payments. And each year, their projected expenses were greater.
On a late summer morning, Mrs. Dorsett, now 32, sat with her son in Room 4013 at St. Vincent Children's Hospital in Indianapolis as a colorless infusion of immune globulin, a treatment made from blood plasma, dripped slowly into his left arm, supplying the antibodies that his immune system does not produce.
The monthly infusion, which has become a regular part of his childhood along with soccer practice and family camping trips, costs $54,000 a year, of which the Dorsetts will pay more than $5,000.
"My friends don't understand it," Mrs. Dorsett said, looking back at the family's relentless, inevitable process of insolvency. "They think, How could it get so bad so quick? Unless you have a sick kid, you don't know what it's like."
For the Dorsetts, this is what the end looked like, according to the family's bankruptcy filing: They had $1,431 in their checking and savings accounts; they owed $29,146 on various credit cards; and after refinancing their house to pay down their credit cards, they could no longer afford the payments on their house or car.
Mr. Dorsett, who works on commercial heating and air conditioning systems, sometimes stitching together 90-hour weeks, earns $68,000 a year. It is more money than his father ever made, but not enough to cover the bills, especially with the monthly infusions starting.
Mrs. Dorsett recounts the impact their medical expenses have had on the family: They buy their clothing at yard sales, and skip vacations and restaurant meals. Mr. and Mrs. Dorsett argue, like many couples, mainly about money. Mr. Dorsett has had to work nights and weekends, with little contact with his wife and children; Mrs. Dorsett has tried to create a home for the children.
"We don't live a frivolous life, but I need to make my kids' life normal," she said. "They still need bikes. My husband says, 'Kids in the third world don't have those things.' I say, 'We don't live in a third world country.' "
As the bills mounted, it was Mrs. Dorsett who forced her husband to acknowledge that he could not simply work more hours. "I showed him, even if I went back to work, we'd still be in debt in 10 years," Mrs. Dorsett said. "Our kids could not go to college."
In a study of 1,771 people who filed for bankruptcy, reported this year by four researchers at Harvard and Ohio University, 28 percent said the cause was illness or injury. Most were middle class, educated and had health insurance at the start of the treatment. Many lost phone service, went without meals or skipped medications to save money. Although the study relied largely on people's own accounts of their finances, the figure suggests that as many as 400,000 American families file for bankruptcy each year because of medical expenses.
"Not only are the bills higher, but the way we pay for care has changed," said Elizabeth Warren, a professor at Harvard Law School and one of the study's authors. "My mother always carried a bill with the doctor, but every dollar she paid went to principal.
"Today, the doctor takes a credit card, and a family might be paying that off at extraordinary interest rates. So people may recover physically from major medical injury, but may not recover financially."
A Shift in Burden
Though health care costs have been rising for decades, changes in insurance starting around 2001 have put more pressure on consumers, especially those who need the most treatment, said Paul Ginsburg, president of the Center for Studying Health System Change, a nonpartisan research group financed primarily by the Robert Wood Johnson Foundation.
The families driven into bankruptcy by these costs include those dealing with both rare and common medical conditions, and others who simply saved too little or owed too much in the false confidence that there would not be unforeseen medical problems, or that their insurance would protect them.
In Pfafftown, N.C., Glenda and Robert Lee Gantt filed for bankruptcy protection after Mrs. Gantt's rheumatoid arthritis forced her to give up working as a security guard. In Houston, Roy and Patsy McKanna filed for bankruptcy after helping their adult daughter pay for breast cancer treatment.
"We were just trying to keep them from sinking until things got better," said Mrs. McKanna, 71. "They took bankruptcy a little more than a year before we did. We managed our budget for 52 years. You never know what life's going to throw at you."
In the 1990's, as medical expenses rose faster than inflation, insurance companies limited costs of coverage by limiting patients' treatment options through the system known as managed care. Even as hospitals and drug companies introduced expensive new treatments, out-of-pocket costs for patients actually fell during the decade.
But as consumers have objected to the limits imposed by managed care, insisting on more choice, the trade-off has been higher insurance premiums and higher out-of-pocket costs, said Arnold Milstein, medical director of the Pacific Business Group on Health.
Dr. Milstein said companies had two rationales for shifting expenses to consumers: to "share the pain" that came with higher overall costs and to encourage patients to seek care judiciously.
"But what if you're unlucky enough to get sick?" he said. "Now you pay a lot more out of pocket. One of the unintended consequences of cost-shifting is that sicker people - the ones who most need insurance - are the ones who end up paying more of their bills."
From 2000 to 2005, employees in the most common type of insurance plan, known as preferred provider organizations, saw their premiums for individual coverage rise 76 percent, to $603 from $342, while their deductibles - the amount they pay out of pocket before insurance kicks in - rose almost 85 percent, to $323 from $175, according to the Kaiser Family Foundation. By 2003, a survey by the Center for Studying Health System Change estimated, 20 million American families had trouble paying their medical bills. Two-thirds of these had health insurance.
Twists of Fate
Mr. and Mrs. Dorsett never expected to be part of this group. They met more than a decade ago at a gas station where she worked part time while studying to be a nurse.
Mr. Dorsett liked to talk on his way home from work. Both wanted to have a big family. They married with plans to have six children. Mrs. Dorsett hoped to finish her studies and work as a nurse; Mr. Dorsett thought she should stay at home with the children.
But shortly after Zachery was born, they knew something was not right. He got the same illnesses or infections as other children, but while others got better, he would get worse. A cold would turn into bronchitis; a sinus infection would require 45 days of antibiotics, and often turn into pneumonia. He needed follow-up doctor visits, refills on prescriptions, X-rays, CAT scans - each time ringing up co-payments of $10, $15, $30 or more.
On a blazing summer evening, the Dorsetts sat at their kitchen table. Their one extravagance, a large-screen television, occupied the children: Zachery, 8; Dakota, 5; and Jessica, 4. Mrs. Dorsett bought the television with her mother as a present for her husband, from money she had earned baby-sitting. Mr. Dorsett, she recalled, had complained about the expense.
At 40, Mr. Dorsett has a ruddy complexion, buzzed blond hair and a light beard. As he nursed a can of supermarket-brand cream soda, he seemed to wish he could turn back the calendar, find some alternative to bankruptcy court. It is a source of recurring friction between them: Mr. Dorsett never wanted to file; Mrs. Dorsett convinced him that there was no alternative.
"I make good money, and I work hard for it," Mr. Dorsett said. "When we filed for bankruptcy, I felt I failed."
He said one of his hardest moments was telling his father about the bankruptcy. His father had worked two or three jobs during hard times, but always managed to pay his debts. Arnold Dorsett made more money than his father ever had, he said, but what good did it do him?
"At work," he said, "the single guys say our insurance is good. Well, it's good for them, because they don't have kids, or don't get sick. When you have a kid who's chronically sick, it's totally different."
On his long days, Mr. Dorsett usually skips lunch rather than spend $6 or $7 at a fast food restaurant. He wishes he could take the family to the Grand Canyon, or afford a house where the girls could have their own bedrooms. But when asked about his sacrifices, he said the luxury he missed most was time, not money. "Zach and I had no relationship until two years ago," he said. "Dakota hardly ever talked to me. I was putting in 80, 90 hours a week, not having a relationship with my children."
While Mr. Dorsett works, Mrs. Dorsett juggles child care with the seemingly endless wrangling with insurance companies and, until the bankruptcy filing, with creditors.
Managing a Medical Mystery
On an August morning at home, Mrs. Dorsett prepared a lunch of corn dogs and macaroni and cheese while Zachery got ready for soccer camp. By all appearances, he is a healthy-looking boy with a somber disposition. Though he has missed as many as 42 days in a school year because of illness, he has friends and keeps up with his classes, his mother said. His worst problem at school, she said, is pushing himself too hard.
Until earlier this year, no one knew what was wrong with him. His immune disorder, known as common variable immune deficiency, can be detected through a simple blood test, but as Mrs. Dorsett took him from doctor to doctor, usually with small problems that would not go away, the doctors looked elsewhere. Some treated only the immediate symptoms; others made Mrs. Dorsett feel she was overtreating her child.
"I felt there was something wrong," she said. "But you can't walk into a doctor's office and say you think you know what it is because you saw it online. They're the ones with the prescription pads, and I didn't want to make them mad."
As the family went from one doctor to the next, without a diagnosis of the root problem, the insurance company often questioned the expenses. Why did Zachery need four doctor visits or five rounds of antibiotics for an ailment that most children shook off in a couple of days? Mrs. Dorsett spent days on the phone, often in voice-mail loops, and often long-distance, pleading her case.
"Like when they refused to pay for antibiotics when he had pneumonia" last year, she said. "The antibiotics cost $373, and we didn't have it. But we couldn't just not give it to him. I knew the review board would come around eventually, but he needed the medicine right away. Finally the doctor gave us samples."
She managed the expenses, like many people, by constantly applying for new credit cards, rolling the debt from the old cards into the new ones, which usually came with low introductory interest rates. In a good year, they would have the rolling charges on their credit cards down to $5,000 or $6,000, but the charges always went up again.
Gradually the debts started to catch up with her. When she fell behind on one of her heavily used cards, the company raised the 2.9 percent interest rate to 14 percent. Suddenly, she could not find a card with a low interest rate or a line of credit of more than $5,000, when the family balance exceeded $13,000. She tried playing dumb with the company, saying she was sure she had sent the check. "But they weren't buying it," she said.
With Mr. Dorsett's insurance, Zachery's bills were not astronomical, but they were just beyond what the Dorsetts could afford. Finally, Mrs. Dorsett asked one of the hospitals for assistance. "They said all I could do was go to churches," she said. "Which is worse, filing for bankruptcy or - I'm going to say it - begging at churches?"
Now, Uncertainty
Since the couple filed for bankruptcy protection in March, the creditors have stopped calling for money. The Dorsetts filed for, and were granted, protection under Chapter 7, which means that a trustee will liquidate their nonexempt assets to pay their creditors. But as in most Chapter 7 cases, there are no assets to liquidate.
In the meantime, since they are resigned to losing their house, they are putting aside the money that would have gone to the mortgage for the next round of big expenses. For the first time since Zachery's birth they are saving money.
Even now, credit card companies still offer them cards, which they have turned down. But because of the bankruptcy, they know they will not be able to secure a mortgage on their next home. Many of their friends, and especially the mothers in Mrs. Dorsett's preschool group, do not know about the bankruptcy.
Even with their debts cleared for the moment, there are no guarantees that the Dorsetts will be able to stay above water. The immune globulin may keep Zachery out of the emergency room this winter, but it may not. They have no credit to buffer unforeseen expenses - a sudden car repair, a slowdown at work, braces.
Mrs. Dorsett tried to put the best spin on the contingencies that loom over their lives: "If we get another house for under $800 a month, if nothing else happens, if the treatments work, we'll make it."
And if things do not work out, they will face that another day, and for many days after that.
The Dorsetts, Sharon and Arnold, were concerned about Zachery's health, but they were not worried about the financial consequences. They were a young, middle-income couple, with health insurance that covered 90 percent of doctors' bills and most of the costs of prescription drugs.
Then the bills started coming in. After a week in the hospital, the couple's share came to $1,100 - not catastrophic, but more than their small savings. They enrolled in a 90-day payment plan with the hospital and struggled to make the monthly installments of nearly $400, hoping that they did not hit any other expenses.
But Zachery, who was eventually found to have an immune system disorder, kept getting sick, and the expense of his treatment - fees for tests, hospitalizations, medicine - kept mounting, eventually costing the family $12,000 to $20,000 a year. Earlier this year, the Dorsetts stopped making mortgage payments on their ranch house, in a subdivision outside Indianapolis, because they could not afford them. In March, they filed for bankruptcy.
"Zach was really mad at us when we told him we were going to lose the house," Mrs. Dorsett said. "We told him we had to make a choice: whether to pay for medical bills or the house."
She added: "I didn't want the kids to hate their father for working all the time, but I also didn't want them to think we were irresponsible. I was worried about Zach feeling guilty or his sister blaming him that she has to leave her friends. But whatever we gave up is a small price to pay for his health."
Never have patients had so many medical options to extend, enrich or alter their lives. But these new options are expensive, and with them has come a change for which many Americans - even those with health insurance - are financially ill prepared.
After decades in which private and government insurance covered a progressively larger share of medical expenses, insurance companies are now shifting more costs to consumers, in the form of much higher deductibles, co-payments or premiums. At the same time, Americans are saving less and carrying higher levels of household debt, and even insured families are exposed to medical expenses that did not exist a decade ago. Many, like the Dorsetts, do not realize how vulnerable they are until the bills arrive.
Lawyers and accountants say that for the more than 1.5 million American families who filed for bankruptcy protection last year, the most common causes were job loss and medical expenses. New bankruptcy legislation, which went into effect Oct. 17, requires middle-income debtors to repay a greater share of their debt.
The Fight for Solvency
The Dorsetts' filing came after years of accumulating relatively modest bills, often just co-payments on doctor visits or prescriptions. Almost since Zachery's birth, they had finished each year with more credit card debt than they had the year before. Even when they took out a second mortgage to pay off their credit cards, by the end of the year they were in debt again, with higher mortgage payments. And each year, their projected expenses were greater.
On a late summer morning, Mrs. Dorsett, now 32, sat with her son in Room 4013 at St. Vincent Children's Hospital in Indianapolis as a colorless infusion of immune globulin, a treatment made from blood plasma, dripped slowly into his left arm, supplying the antibodies that his immune system does not produce.
The monthly infusion, which has become a regular part of his childhood along with soccer practice and family camping trips, costs $54,000 a year, of which the Dorsetts will pay more than $5,000.
"My friends don't understand it," Mrs. Dorsett said, looking back at the family's relentless, inevitable process of insolvency. "They think, How could it get so bad so quick? Unless you have a sick kid, you don't know what it's like."
For the Dorsetts, this is what the end looked like, according to the family's bankruptcy filing: They had $1,431 in their checking and savings accounts; they owed $29,146 on various credit cards; and after refinancing their house to pay down their credit cards, they could no longer afford the payments on their house or car.
Mr. Dorsett, who works on commercial heating and air conditioning systems, sometimes stitching together 90-hour weeks, earns $68,000 a year. It is more money than his father ever made, but not enough to cover the bills, especially with the monthly infusions starting.
Mrs. Dorsett recounts the impact their medical expenses have had on the family: They buy their clothing at yard sales, and skip vacations and restaurant meals. Mr. and Mrs. Dorsett argue, like many couples, mainly about money. Mr. Dorsett has had to work nights and weekends, with little contact with his wife and children; Mrs. Dorsett has tried to create a home for the children.
"We don't live a frivolous life, but I need to make my kids' life normal," she said. "They still need bikes. My husband says, 'Kids in the third world don't have those things.' I say, 'We don't live in a third world country.' "
As the bills mounted, it was Mrs. Dorsett who forced her husband to acknowledge that he could not simply work more hours. "I showed him, even if I went back to work, we'd still be in debt in 10 years," Mrs. Dorsett said. "Our kids could not go to college."
In a study of 1,771 people who filed for bankruptcy, reported this year by four researchers at Harvard and Ohio University, 28 percent said the cause was illness or injury. Most were middle class, educated and had health insurance at the start of the treatment. Many lost phone service, went without meals or skipped medications to save money. Although the study relied largely on people's own accounts of their finances, the figure suggests that as many as 400,000 American families file for bankruptcy each year because of medical expenses.
"Not only are the bills higher, but the way we pay for care has changed," said Elizabeth Warren, a professor at Harvard Law School and one of the study's authors. "My mother always carried a bill with the doctor, but every dollar she paid went to principal.
"Today, the doctor takes a credit card, and a family might be paying that off at extraordinary interest rates. So people may recover physically from major medical injury, but may not recover financially."
A Shift in Burden
Though health care costs have been rising for decades, changes in insurance starting around 2001 have put more pressure on consumers, especially those who need the most treatment, said Paul Ginsburg, president of the Center for Studying Health System Change, a nonpartisan research group financed primarily by the Robert Wood Johnson Foundation.
The families driven into bankruptcy by these costs include those dealing with both rare and common medical conditions, and others who simply saved too little or owed too much in the false confidence that there would not be unforeseen medical problems, or that their insurance would protect them.
In Pfafftown, N.C., Glenda and Robert Lee Gantt filed for bankruptcy protection after Mrs. Gantt's rheumatoid arthritis forced her to give up working as a security guard. In Houston, Roy and Patsy McKanna filed for bankruptcy after helping their adult daughter pay for breast cancer treatment.
"We were just trying to keep them from sinking until things got better," said Mrs. McKanna, 71. "They took bankruptcy a little more than a year before we did. We managed our budget for 52 years. You never know what life's going to throw at you."
In the 1990's, as medical expenses rose faster than inflation, insurance companies limited costs of coverage by limiting patients' treatment options through the system known as managed care. Even as hospitals and drug companies introduced expensive new treatments, out-of-pocket costs for patients actually fell during the decade.
But as consumers have objected to the limits imposed by managed care, insisting on more choice, the trade-off has been higher insurance premiums and higher out-of-pocket costs, said Arnold Milstein, medical director of the Pacific Business Group on Health.
Dr. Milstein said companies had two rationales for shifting expenses to consumers: to "share the pain" that came with higher overall costs and to encourage patients to seek care judiciously.
"But what if you're unlucky enough to get sick?" he said. "Now you pay a lot more out of pocket. One of the unintended consequences of cost-shifting is that sicker people - the ones who most need insurance - are the ones who end up paying more of their bills."
From 2000 to 2005, employees in the most common type of insurance plan, known as preferred provider organizations, saw their premiums for individual coverage rise 76 percent, to $603 from $342, while their deductibles - the amount they pay out of pocket before insurance kicks in - rose almost 85 percent, to $323 from $175, according to the Kaiser Family Foundation. By 2003, a survey by the Center for Studying Health System Change estimated, 20 million American families had trouble paying their medical bills. Two-thirds of these had health insurance.
Twists of Fate
Mr. and Mrs. Dorsett never expected to be part of this group. They met more than a decade ago at a gas station where she worked part time while studying to be a nurse.
Mr. Dorsett liked to talk on his way home from work. Both wanted to have a big family. They married with plans to have six children. Mrs. Dorsett hoped to finish her studies and work as a nurse; Mr. Dorsett thought she should stay at home with the children.
But shortly after Zachery was born, they knew something was not right. He got the same illnesses or infections as other children, but while others got better, he would get worse. A cold would turn into bronchitis; a sinus infection would require 45 days of antibiotics, and often turn into pneumonia. He needed follow-up doctor visits, refills on prescriptions, X-rays, CAT scans - each time ringing up co-payments of $10, $15, $30 or more.
On a blazing summer evening, the Dorsetts sat at their kitchen table. Their one extravagance, a large-screen television, occupied the children: Zachery, 8; Dakota, 5; and Jessica, 4. Mrs. Dorsett bought the television with her mother as a present for her husband, from money she had earned baby-sitting. Mr. Dorsett, she recalled, had complained about the expense.
At 40, Mr. Dorsett has a ruddy complexion, buzzed blond hair and a light beard. As he nursed a can of supermarket-brand cream soda, he seemed to wish he could turn back the calendar, find some alternative to bankruptcy court. It is a source of recurring friction between them: Mr. Dorsett never wanted to file; Mrs. Dorsett convinced him that there was no alternative.
"I make good money, and I work hard for it," Mr. Dorsett said. "When we filed for bankruptcy, I felt I failed."
He said one of his hardest moments was telling his father about the bankruptcy. His father had worked two or three jobs during hard times, but always managed to pay his debts. Arnold Dorsett made more money than his father ever had, he said, but what good did it do him?
"At work," he said, "the single guys say our insurance is good. Well, it's good for them, because they don't have kids, or don't get sick. When you have a kid who's chronically sick, it's totally different."
On his long days, Mr. Dorsett usually skips lunch rather than spend $6 or $7 at a fast food restaurant. He wishes he could take the family to the Grand Canyon, or afford a house where the girls could have their own bedrooms. But when asked about his sacrifices, he said the luxury he missed most was time, not money. "Zach and I had no relationship until two years ago," he said. "Dakota hardly ever talked to me. I was putting in 80, 90 hours a week, not having a relationship with my children."
While Mr. Dorsett works, Mrs. Dorsett juggles child care with the seemingly endless wrangling with insurance companies and, until the bankruptcy filing, with creditors.
Managing a Medical Mystery
On an August morning at home, Mrs. Dorsett prepared a lunch of corn dogs and macaroni and cheese while Zachery got ready for soccer camp. By all appearances, he is a healthy-looking boy with a somber disposition. Though he has missed as many as 42 days in a school year because of illness, he has friends and keeps up with his classes, his mother said. His worst problem at school, she said, is pushing himself too hard.
Until earlier this year, no one knew what was wrong with him. His immune disorder, known as common variable immune deficiency, can be detected through a simple blood test, but as Mrs. Dorsett took him from doctor to doctor, usually with small problems that would not go away, the doctors looked elsewhere. Some treated only the immediate symptoms; others made Mrs. Dorsett feel she was overtreating her child.
"I felt there was something wrong," she said. "But you can't walk into a doctor's office and say you think you know what it is because you saw it online. They're the ones with the prescription pads, and I didn't want to make them mad."
As the family went from one doctor to the next, without a diagnosis of the root problem, the insurance company often questioned the expenses. Why did Zachery need four doctor visits or five rounds of antibiotics for an ailment that most children shook off in a couple of days? Mrs. Dorsett spent days on the phone, often in voice-mail loops, and often long-distance, pleading her case.
"Like when they refused to pay for antibiotics when he had pneumonia" last year, she said. "The antibiotics cost $373, and we didn't have it. But we couldn't just not give it to him. I knew the review board would come around eventually, but he needed the medicine right away. Finally the doctor gave us samples."
She managed the expenses, like many people, by constantly applying for new credit cards, rolling the debt from the old cards into the new ones, which usually came with low introductory interest rates. In a good year, they would have the rolling charges on their credit cards down to $5,000 or $6,000, but the charges always went up again.
Gradually the debts started to catch up with her. When she fell behind on one of her heavily used cards, the company raised the 2.9 percent interest rate to 14 percent. Suddenly, she could not find a card with a low interest rate or a line of credit of more than $5,000, when the family balance exceeded $13,000. She tried playing dumb with the company, saying she was sure she had sent the check. "But they weren't buying it," she said.
With Mr. Dorsett's insurance, Zachery's bills were not astronomical, but they were just beyond what the Dorsetts could afford. Finally, Mrs. Dorsett asked one of the hospitals for assistance. "They said all I could do was go to churches," she said. "Which is worse, filing for bankruptcy or - I'm going to say it - begging at churches?"
Now, Uncertainty
Since the couple filed for bankruptcy protection in March, the creditors have stopped calling for money. The Dorsetts filed for, and were granted, protection under Chapter 7, which means that a trustee will liquidate their nonexempt assets to pay their creditors. But as in most Chapter 7 cases, there are no assets to liquidate.
In the meantime, since they are resigned to losing their house, they are putting aside the money that would have gone to the mortgage for the next round of big expenses. For the first time since Zachery's birth they are saving money.
Even now, credit card companies still offer them cards, which they have turned down. But because of the bankruptcy, they know they will not be able to secure a mortgage on their next home. Many of their friends, and especially the mothers in Mrs. Dorsett's preschool group, do not know about the bankruptcy.
Even with their debts cleared for the moment, there are no guarantees that the Dorsetts will be able to stay above water. The immune globulin may keep Zachery out of the emergency room this winter, but it may not. They have no credit to buffer unforeseen expenses - a sudden car repair, a slowdown at work, braces.
Mrs. Dorsett tried to put the best spin on the contingencies that loom over their lives: "If we get another house for under $800 a month, if nothing else happens, if the treatments work, we'll make it."
And if things do not work out, they will face that another day, and for many days after that.
More employees sharing health-insurance costs
By Annemarie Franczyk
Business First of Buffalo
Updated: 8:00 p.m. ET Oct. 23, 2005
Greater numbers of area employees are boning up on their insurance terms.
Cost sharing, for example, means the boss is passing a portion of health-insurance expenses on to them. And out of pocket is where they're digging to pay for it.
According to an Internet survey of subscribers to Business First's daily e-mail edition, far more workers chip in a percentage of the cost of their health insurance today compared to five years ago.
The survey, conducted from Oct. 14 to Oct. 17, showed that about 80 percent of employers who offered health-insurance benefits required employees to pay for at least a portion of the coverage. During a similar Business First survey in 2000, the figure was closer to 50 percent.
MidCity Office Furniture Inc.'s 11 employees are among them.
"Up to four years ago, we paid 100 percent for it," said Kurt Amico, president. "We had to make employees at least pay the increases. They're now paying 40 percent of the total cost."
The Buffalo company's employees are among the 88 percent of American workers who contribute to their health-care premiums, according to a national survey by Benefits USA. The survey results indicate that during the last several years, the number of organizations that offer health care at no cost has decreased to 12 percent.
The study predicted that more large and small employers will ask employees to shoulder more of the burden. Fully 43 percent of employers reported increasing the employee portion of their health-care premiums in the last year, and 33 percent increased deductible levels.
MidCity did something similar. In addition to shifting the cost, the company took a plan with increased copayments to lower the overall cost of the benefits.
"But there's only so much you can do with that until you go with a lesser plan," Amico said.
Those employers that do offer any kind of assistance with health insurance most often will do so only for full-time workers, and often not extend the benefit to coverage for their families. The BISON Scholarship Fund Inc. is one such employer, but workers there have the option to have pre-tax deductions taken from their paychecks to cover family benefits, up to $5,000 annually.
"We are a small not-for-profit organization, and although the company covers the employees' health insurance, we are unable to assist with employees' family benefits," executive director Kathleen Christy wrote in her survey response. "Although difficult, we cannot justify taking donors' contributions and using them anywhere but for our program expenses. This is just a fact of life and employees know and understand that - in order to keep their places of employment viable and healthy."
Appliance Associates of Buffalo, too, provides health benefits for its 20 employees, but additional coverage is paid for by the workers. Some big employers have made headlines by switching to a single carrier, but Appliance Associates continues to offer the area's three major insurers: BlueCross BlueShield of Western New York, Independent Health and Univera Healthcare.
"We feel it's the cost of having employees here. It's the cost of doing business," said Kevin Telaak, vice president.
A handful of businesses are coupling slightly scaled-back managed-care plans with reimbursement accounts - a combination that some in the industry are calling "consumer-driven lite" plans. Two years ago, Aurora Consulting Group Inc. overhauled its health benefits by shifting to a single carrier and asking employees to pay any premium increases. The money saved helped the company fund $1,900 health-reimbursement arrangements for each of the 54 full-time employees. Workers can use the accounts to cover any out-of-pocket expenses such as copayments, over-the-counter drugs and dental and vision care. The combination is a retention tool, said President and CEO Jeff McCaskey.
"We're always looking at how we can retain people. The focus is on quality of life," McCaskey said.
Business First of Buffalo
Updated: 8:00 p.m. ET Oct. 23, 2005
Greater numbers of area employees are boning up on their insurance terms.
Cost sharing, for example, means the boss is passing a portion of health-insurance expenses on to them. And out of pocket is where they're digging to pay for it.
According to an Internet survey of subscribers to Business First's daily e-mail edition, far more workers chip in a percentage of the cost of their health insurance today compared to five years ago.
The survey, conducted from Oct. 14 to Oct. 17, showed that about 80 percent of employers who offered health-insurance benefits required employees to pay for at least a portion of the coverage. During a similar Business First survey in 2000, the figure was closer to 50 percent.
MidCity Office Furniture Inc.'s 11 employees are among them.
"Up to four years ago, we paid 100 percent for it," said Kurt Amico, president. "We had to make employees at least pay the increases. They're now paying 40 percent of the total cost."
The Buffalo company's employees are among the 88 percent of American workers who contribute to their health-care premiums, according to a national survey by Benefits USA. The survey results indicate that during the last several years, the number of organizations that offer health care at no cost has decreased to 12 percent.
The study predicted that more large and small employers will ask employees to shoulder more of the burden. Fully 43 percent of employers reported increasing the employee portion of their health-care premiums in the last year, and 33 percent increased deductible levels.
MidCity did something similar. In addition to shifting the cost, the company took a plan with increased copayments to lower the overall cost of the benefits.
"But there's only so much you can do with that until you go with a lesser plan," Amico said.
Those employers that do offer any kind of assistance with health insurance most often will do so only for full-time workers, and often not extend the benefit to coverage for their families. The BISON Scholarship Fund Inc. is one such employer, but workers there have the option to have pre-tax deductions taken from their paychecks to cover family benefits, up to $5,000 annually.
"We are a small not-for-profit organization, and although the company covers the employees' health insurance, we are unable to assist with employees' family benefits," executive director Kathleen Christy wrote in her survey response. "Although difficult, we cannot justify taking donors' contributions and using them anywhere but for our program expenses. This is just a fact of life and employees know and understand that - in order to keep their places of employment viable and healthy."
Appliance Associates of Buffalo, too, provides health benefits for its 20 employees, but additional coverage is paid for by the workers. Some big employers have made headlines by switching to a single carrier, but Appliance Associates continues to offer the area's three major insurers: BlueCross BlueShield of Western New York, Independent Health and Univera Healthcare.
"We feel it's the cost of having employees here. It's the cost of doing business," said Kevin Telaak, vice president.
A handful of businesses are coupling slightly scaled-back managed-care plans with reimbursement accounts - a combination that some in the industry are calling "consumer-driven lite" plans. Two years ago, Aurora Consulting Group Inc. overhauled its health benefits by shifting to a single carrier and asking employees to pay any premium increases. The money saved helped the company fund $1,900 health-reimbursement arrangements for each of the 54 full-time employees. Workers can use the accounts to cover any out-of-pocket expenses such as copayments, over-the-counter drugs and dental and vision care. The combination is a retention tool, said President and CEO Jeff McCaskey.
"We're always looking at how we can retain people. The focus is on quality of life," McCaskey said.
Sunday, October 23, 2005
AIG Insurance Options At A Glance
From Bella Online
Written By Bonnie Sayers
As I mentioned in the Insurance Companies At A Glance article I am going to be researching the Insurance Industry to present an overview of what each Company has to offer families and consumers.
This will enable individuals to make decisions and have easy access to information online and handy for all Insurance Companies. This will be an A-Z guide with another article devoted to the websites where you can obtain quotes from many of these companies and compare coverage options.
AIG- American International Group, Inc. Profile:
1. Ratings - A.M. Best – A+, Moody’s – Aa1, S&P – AA+
2. States doing business - AIG Life does not solicit business in New York. Insure Tuition is not available in FL, MD, NY, NC, TX, OR.
3. Coverages - For individuals – auto, accidental, health, life, renters, homeowners, condo owners. Group life
4. Website - http://www.aig.com/gateway/home
5. Toll-free number - 1 – 877-638-4244
6. Discounts for multiple policyholders - A discount may be applied to homeowners policies if you have a current automobile policy
7. Company slogan - Cannot find one
8. Other services offered - For individuals there is retirement services, banking and loans, mutual funds, annuities, long term investment programs, military services, insure tuition.
9. Payment options - online bill payment for Hawaii residents for auto, homeowners, motorcycle and business auto - Payroll deduction for auto, life and home.
10. Quote Options - available online.
11. Claims Offices - To report a claim call 1-888-760-9195. There is an online form to report a claim. There is a separate office in Hawaii.
12. Company History - AIG is the world's leading U.S.-based international insurance and financial services organization, the largest underwriter of commercial and industrial insurance in the United States and the second-largest U.S. life insurer.
13. In the News/Media Information - October 2005 – AIG Risk Management begins a new insurance program for the temporary staffing industry
14. Charity Efforts - Homers for Kids in association with the New York Mets for the 2005 season. For every home run the New York Mets hit at Shea Stadium in 2005 AIG will donate $250 to a designated charity. If a Mets player hits a grand slam, the donation will be $1000. A new charity will be "at bat" for each of the 26 Mets home series. Feed the Children’s Hurricane Katrina relief is receiving money through Homers for Kids also.
15. Subsidiaries - AIG Risk Management (AIGRM), AIG Aviation, Inc., AIG Global Investment Group, AIG Life Insurance Company of Canada, National Union Fire Insurance Company of Pittsburgh, Pa, New York, NY
Written By Bonnie Sayers
As I mentioned in the Insurance Companies At A Glance article I am going to be researching the Insurance Industry to present an overview of what each Company has to offer families and consumers.
This will enable individuals to make decisions and have easy access to information online and handy for all Insurance Companies. This will be an A-Z guide with another article devoted to the websites where you can obtain quotes from many of these companies and compare coverage options.
AIG- American International Group, Inc. Profile:
1. Ratings - A.M. Best – A+, Moody’s – Aa1, S&P – AA+
2. States doing business - AIG Life does not solicit business in New York. Insure Tuition is not available in FL, MD, NY, NC, TX, OR.
3. Coverages - For individuals – auto, accidental, health, life, renters, homeowners, condo owners. Group life
4. Website - http://www.aig.com/gateway/home
5. Toll-free number - 1 – 877-638-4244
6. Discounts for multiple policyholders - A discount may be applied to homeowners policies if you have a current automobile policy
7. Company slogan - Cannot find one
8. Other services offered - For individuals there is retirement services, banking and loans, mutual funds, annuities, long term investment programs, military services, insure tuition.
9. Payment options - online bill payment for Hawaii residents for auto, homeowners, motorcycle and business auto - Payroll deduction for auto, life and home.
10. Quote Options - available online.
11. Claims Offices - To report a claim call 1-888-760-9195. There is an online form to report a claim. There is a separate office in Hawaii.
12. Company History - AIG is the world's leading U.S.-based international insurance and financial services organization, the largest underwriter of commercial and industrial insurance in the United States and the second-largest U.S. life insurer.
13. In the News/Media Information - October 2005 – AIG Risk Management begins a new insurance program for the temporary staffing industry
14. Charity Efforts - Homers for Kids in association with the New York Mets for the 2005 season. For every home run the New York Mets hit at Shea Stadium in 2005 AIG will donate $250 to a designated charity. If a Mets player hits a grand slam, the donation will be $1000. A new charity will be "at bat" for each of the 26 Mets home series. Feed the Children’s Hurricane Katrina relief is receiving money through Homers for Kids also.
15. Subsidiaries - AIG Risk Management (AIGRM), AIG Aviation, Inc., AIG Global Investment Group, AIG Life Insurance Company of Canada, National Union Fire Insurance Company of Pittsburgh, Pa, New York, NY
Navigating the Individual Health Insurance Market
By Karen Pallarito
HealthDay Reporter
SUNDAY, Oct. 23 (HealthDay News) — If you're unemployed or self-employed or if you work for a small business that doesn't offer health insurance benefits, buying a health plan on your own may seem prohibitively expensive.
But it's worth investigating the options in your state, insurance brokers say.
"It's always better to be covered for something than nothing," said Thomas H. Harte, president of Landmark Benefits in Hampstead, N.H.
The cost may depend on what a person is looking for, he said. There are a number of variables to consider, including the monthly premium you'll pay, co-payments you'll incur on services and drugs, and the types of benefits a plan will cover.
Premiums vary from state to state and may hinge on the type of insurance market reforms a state has implemented, explained Harte, who serves on the National Association of Health Underwriters' legislative council. In New Hampshire, for example, a healthy person will pay less than a comparable individual in Massachusetts. The difference is that New Hampshire allows insurers to adjust premiums based on an individual's health status and use of health services, while Massachusetts does not, he said.
Premiums are generally higher in the New England and Mid-Atlantic regions of the country, according to a report by the Henry J. Kaiser Family Foundation and eHealthInsurance.com, an online health insurance referral site.
Nationally, the report said, older purchasers generally pay higher premiums than younger purchasers, reflecting the higher health-care costs that people typically incur as they get older.
In addition to premiums, individual health insurer buyers should consider their out-of-pocket exposure. Deductibles for single and family policies vary widely, from less than $500 to more than $3,000, the Kaiser/eHealthInsurance report showed. Co-payments for physician office visits differ, too. About one half of single purchasers choose plans with co-payments of less than $20, the report said.
Consumers also need to learn about any exclusions and limitations that may affect their out-of-pocket costs, Harte advised. A health plan with a generic drugs-only policy, for example, may be a poor fit for a person who takes a brand-name medication with no generic equivalent. He or she may qualify to receive the insurer's negotiated discount at the pharmacy counter, but the money to pay for that medicine would come from the health plan member's own pocket.
Individuals who are willing to assume risk for routine medical expenses in order to lower their health insurance premium might want to consider a "high-deductible health plan." With the exception of some preventive care services, these plans don't begin paying for medical care until the policyholder has met a higher-than-usual deductible.
"You have to talk to your insurance broker or agent to determine if it will be a cost-effective decision for you," Harte noted.
Then comes the application process. Whether you are seeking insurance for yourself or your family, you'll need to complete the insurer's health questionnaire, which will ask about your use of medical services say, over the past year, as well as your medical history.
It's in your best interest to answer truthfully, Harte advised. If you don't, your insurer may terminate your policy retroactively or boost your premium.
As a safeguard, more than half of all states have high-risk pools to insure individuals who are denied private coverage, according to the National Conference of State Legislatures. These pools typically offer coverage similar to what's available through private insurers, but it's always more expensive.
HealthDay Reporter
SUNDAY, Oct. 23 (HealthDay News) — If you're unemployed or self-employed or if you work for a small business that doesn't offer health insurance benefits, buying a health plan on your own may seem prohibitively expensive.
But it's worth investigating the options in your state, insurance brokers say.
"It's always better to be covered for something than nothing," said Thomas H. Harte, president of Landmark Benefits in Hampstead, N.H.
The cost may depend on what a person is looking for, he said. There are a number of variables to consider, including the monthly premium you'll pay, co-payments you'll incur on services and drugs, and the types of benefits a plan will cover.
Premiums vary from state to state and may hinge on the type of insurance market reforms a state has implemented, explained Harte, who serves on the National Association of Health Underwriters' legislative council. In New Hampshire, for example, a healthy person will pay less than a comparable individual in Massachusetts. The difference is that New Hampshire allows insurers to adjust premiums based on an individual's health status and use of health services, while Massachusetts does not, he said.
Premiums are generally higher in the New England and Mid-Atlantic regions of the country, according to a report by the Henry J. Kaiser Family Foundation and eHealthInsurance.com, an online health insurance referral site.
Nationally, the report said, older purchasers generally pay higher premiums than younger purchasers, reflecting the higher health-care costs that people typically incur as they get older.
In addition to premiums, individual health insurer buyers should consider their out-of-pocket exposure. Deductibles for single and family policies vary widely, from less than $500 to more than $3,000, the Kaiser/eHealthInsurance report showed. Co-payments for physician office visits differ, too. About one half of single purchasers choose plans with co-payments of less than $20, the report said.
Consumers also need to learn about any exclusions and limitations that may affect their out-of-pocket costs, Harte advised. A health plan with a generic drugs-only policy, for example, may be a poor fit for a person who takes a brand-name medication with no generic equivalent. He or she may qualify to receive the insurer's negotiated discount at the pharmacy counter, but the money to pay for that medicine would come from the health plan member's own pocket.
Individuals who are willing to assume risk for routine medical expenses in order to lower their health insurance premium might want to consider a "high-deductible health plan." With the exception of some preventive care services, these plans don't begin paying for medical care until the policyholder has met a higher-than-usual deductible.
"You have to talk to your insurance broker or agent to determine if it will be a cost-effective decision for you," Harte noted.
Then comes the application process. Whether you are seeking insurance for yourself or your family, you'll need to complete the insurer's health questionnaire, which will ask about your use of medical services say, over the past year, as well as your medical history.
It's in your best interest to answer truthfully, Harte advised. If you don't, your insurer may terminate your policy retroactively or boost your premium.
As a safeguard, more than half of all states have high-risk pools to insure individuals who are denied private coverage, according to the National Conference of State Legislatures. These pools typically offer coverage similar to what's available through private insurers, but it's always more expensive.
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