By Daniel C. Vock -
A proposal before the U.S. Senate designed to help small businesses buy cheaper health insurance has many state officials up in arms because it could strip states of their power to regulate carriers and dictate what insurers must cover.
At least 39 state attorneys general, three governors and 16 state insurance regulators object to the legislation.
"This bill contains provisions that will erode state oversight of health insurance plans and eliminate consumer protections in the areas of mandated benefits and internal grievance procedures," 39 members of the National Association of Attorneys General said in a letter to U.S. senators..
The controversial measure would let trade associations buy coverage from insurance companies and offer it to members and their employees nationwide, even if the plans didn't comply with individual state laws.
The legislation would let existing small business plans avoid state regulations too, in order to make sure new plans don't have an unfair advantage.
Business leaders argue that insurance companies are loathe to offer nationwide products today, because products they offer must comply with at least 50 different sets of laws.
They point to the experience of the Associated Builders and Contractors, which shut down its 43-year-old health insurance plan after its insurance company quit and more than 50 others declined to take its place.
Carriers said they were unwilling to assume the business because state laws they would have to obey dictated how they could set rates, who must be eligible and what services they must provide.
"We were legislated out of business, effectively, by the states," Joseph E. Rossman, ABC's vice-president of fringe benefits, said
The so-called Enzi Bill, named after U.S. Sen. Mike Enzi, a Wyoming Republican, grows out of an effort to help small-business groups such as ABC offer members the chance to buy health benefits.
Similar ideas have been floated for a decade, and the U.S. House has passed legislation clearing the way for the association health plans eight times. But Enzi's version is the first to pick up speed in the Senate, where it's expected to come up for a vote in early May.
Buying employee insurance is harder for smaller business than large companies because smaller shops don't bring in enough customers to be able to negotiate favorable deals.
Secondly, smaller businesses contend with state regulations that many large companies don't have to deal with. Many large companies bypass state insurance laws by insuring themselves rather than buying insurance from an outside carrier. Self-insured companies are regulated by a 1974 federal law, the Employee Retirement Income Security Act.
The average employee might not notice the difference between a self-insured plan and a "fully insured" plan purchased through an outside carrier, because companies that insure themselves usually hire an insurance company to manage the program.
The Enzi Bill would lower barriers small businesses face in buying insurance by giving them some of the same advantages that large companies have.
That's provoked outcries from consumer advocates and interest groups who lobbied hard to put protections into state laws.
States themselves are mainly worried about how the legislation would affect their ability to require insurance companies to cover certain treatments, restrict the factors they can consider in setting rates and enforce consumer protection laws.
All 50 states require insurers to provide certain benefits. All mandate that policies of a new mother provide coverage for her child for the first 30 days of the child's life. Forty-six require insurance to cover diabetes treatment.
Beyond that, mandates vary greatly. Many New England states dictate that treatment for Lyme Disease be included. Other states require coverage for mammograms and prostate exams, birth control and mental health treatment. And types of treatments that must be covered vary from state to state.
Enzi's legislation would let carriers offer plans that skirt state requirements. An insurance company that wanted to offer one of the stripped-down plans also would have to offer an alternative with all the benefits given to state employees in one of the five largest states (California, New York, Florida, Texas and Illinois).
Critics say only sick people will opt for the more expensive full benefit packages. That, in turn, would make the higher-cost options even more expensive.
There is a check, though, that would prevent premiums from the high-end plans from spiraling out of control. Any spike in the cost of the robust plans would be spread across all of the insurers' policyholders, not just the ones in the expensive plans.
Still, the move is troubling for many state officials.
"Health care is delivered locally by local doctors and local health care providers... (Insurance companies) need to be held accountable to local entities, specifically the states," said Rhode Island state Rep. Brian Kennedy (D), secretary of the National Conference of Insurance Legislators.
Another controversial aspect would let national insurers consider gender, health, participation in wellness programs, group size and industry when setting prices, which is already allowed in 36 states.
Currently, 11 states prohibit insurance companies from using a person's health status when setting rates, according the National Association of Health Underwriters. The "community rating" approach generally limits the factors insurers can consider to age, geography and family size, but states use different versions of that model.
The approach spreads the risk more evenly throughout the state, meaning insurance is more affordable for sick people but more expensive for healthy people.
(Hawaii, Pennsylvania and Virginia impose neither approach).
Under Enzi's proposal, a customer with the most expensive in premiums could face prices 26 times greater than the person with the cheapest premiums. In states that use the more restrictive rating rules, the highest prices can be as little as two times the lowest prices.
"States are in the best position to determine whether what rating policies are best for their consumers - both healthy and sick - and we believe in its current form (the bill) will have a negative effect in many states," the National Association of Insurance Commissioners said in a letter to Enzi.
New Hampshire Gov. John Lynch (D) urged his congressional delegation to consider the Granite State's recent experience. It adopted standards in 2003 similar to the ones outlined in the Enzi Bill. According to Lynch's letter, that sent insurance rates "skyrocketing."
Lynch said small companies couldn't grow and many considered dropping coverage altogether, so the state reversed course. It dictated that the highest premiums could only be 3.5 times greater than the lowest premiums for the same plan. Now, he said, the insurance market has improved.
Two other governors - Mike Rounds (R) of South Dakota and Ted Kulongowski (D) of Oregon - also expressed concerns about states' ability to enforce their consumer protection laws if the Enzi Bill passes, echoing concerns from the attorneys general.
They're concerned that insurers could haul states into federal court if the states don't allow them to sell the newly authorized products, while states would lose many of their enforcement powers.
Friday, April 28, 2006
Thursday, April 27, 2006
More middle-income Americans have no health insurance
By Kristen Gerencher, MarketWatch
Last Update: 8:24 PM ET Apr 26, 2006
SAN FRANCISCO (MarketWatch) -- The problem of getting and keeping affordable health insurance affected substantially more middle-income workers in 2005 as more went without coverage, according to a new report.
Among working adults with annual incomes of $20,000 to $40,000, 41% were uninsured for at least part of the past year, up from 28% who were at least temporarily without coverage in 2001, according to a survey of 4,350 people from The Commonwealth Fund, a research group in New York.
Low-income Americans typically face the biggest challenge with health insurance, and the trend of more moderate-income people losing it is "worrisome," said Sara Collins, senior program officer for the Commonwealth Fund.
"Forty-thousand dollars a year is by no means a low-wage job," she said.
The numbers also show that in the U.S. population as a whole there were 32 million who were uninsured at the time of the survey, and 82% of those had been uninsured for a year or longer. Among the 16 million who had insurance at the time of the poll but had spent some time without coverage in the past year, about one-fourth had at some point been uninsured for a year or longer, Collins said.
Several factors in the last few years have combined to make it tougher for moderate-income families to hold onto their health plans. Wage growth has been stagnant and the percentage of employers -- especially small firms -- offering coverage has been falling, said Gary Claxton, vice president of the nonpartisan Kaiser Family Foundation in Washington.
"Health-insurance costs have been going up so much faster than income, it's not surprising that difficulty in getting access to health benefits and keeping them would be going up the income scale," he said.
Of the estimated 48 million uninsured adults age 19 to 64 in the country, 67% were in families where at least one person was working full time, according to the report.
Increased cost-sharing where workers are on the hook for more out-of-pocket spending on deductibles, copays and premiums has put health care out of reach for more people, Collins said. And those on their own without job-based plans often find the individual market unaffordable or inaccessible, especially if they have preexisting conditions, she said.
"Premiums might be quite high or they might not be covered at all," she said. "Because of the underwriting issue, it makes that market problematic for people looking for alternatives."
About 6% of those surveyed had individual insurance.
Medical debt burdens
Household financial problems associated with health care are on the rise as well. One in five adults, including insured and uninsured, currently has medical debt being paid off over time, the survey said. About 44% of those with medical debt reported it was $2,000 or more.
The majority of Americans don't use enough health care to get them in such a bind, Claxton said. "In any given year, 20% of people account for 80% of the costs."
But for those who do end up needing hospital and other expensive care, the bills can be a hardship, especially if they have a bare-bones health plan or no insurance at all, he said.
"When you look at some of the policies now where the out-of-pocket limit might be in the $6,000 to $8,000 range for a family, it's not that hard to get there."
Collins agreed. "One really interesting finding is this affected both uninsured people in lower-income and higher-income households. Rates of debt were actually highest among those with higher incomes," she said, adding that 60% of adults with income of at least $40,000 have problems with medical bills or accrued debt.
More than half of uninsured adults said they had medical-bill problems. Of those, 49% used their entire savings to pay it off, according to the survey. The need to pay medical bills prevented two of five from shelling out for basic necessities such as food, heat or rent.
Care of teeth and oral health often take a hit when insurance disappears. The portion of uninsured adults who had a dental exam in the past year was 35%, half the rate of those with coverage.
The consequences of going without health insurance often lead to a downward spiral of poorer health and costly care, Collins said.
Almost six in 10 adults with chronic illnesses who spent time uninsured in the past year didn't fill or skipped their medications because they couldn't afford them, the study said.
They also were more than twice as likely to go to an emergency room or hospital for care of those chronic conditions than people with health coverage, with 35% of uninsured people with conditions such as asthma or diabetes visiting an emergency room or staying in the hospital overnight compared with 16% of those insured all year who had a chronic condition.
People with gaps in coverage also tended to go without recommended cancer, cholesterol and blood-pressure screenings more often, according to the report.
Last Update: 8:24 PM ET Apr 26, 2006
SAN FRANCISCO (MarketWatch) -- The problem of getting and keeping affordable health insurance affected substantially more middle-income workers in 2005 as more went without coverage, according to a new report.
Among working adults with annual incomes of $20,000 to $40,000, 41% were uninsured for at least part of the past year, up from 28% who were at least temporarily without coverage in 2001, according to a survey of 4,350 people from The Commonwealth Fund, a research group in New York.
Low-income Americans typically face the biggest challenge with health insurance, and the trend of more moderate-income people losing it is "worrisome," said Sara Collins, senior program officer for the Commonwealth Fund.
"Forty-thousand dollars a year is by no means a low-wage job," she said.
The numbers also show that in the U.S. population as a whole there were 32 million who were uninsured at the time of the survey, and 82% of those had been uninsured for a year or longer. Among the 16 million who had insurance at the time of the poll but had spent some time without coverage in the past year, about one-fourth had at some point been uninsured for a year or longer, Collins said.
Several factors in the last few years have combined to make it tougher for moderate-income families to hold onto their health plans. Wage growth has been stagnant and the percentage of employers -- especially small firms -- offering coverage has been falling, said Gary Claxton, vice president of the nonpartisan Kaiser Family Foundation in Washington.
"Health-insurance costs have been going up so much faster than income, it's not surprising that difficulty in getting access to health benefits and keeping them would be going up the income scale," he said.
Of the estimated 48 million uninsured adults age 19 to 64 in the country, 67% were in families where at least one person was working full time, according to the report.
Increased cost-sharing where workers are on the hook for more out-of-pocket spending on deductibles, copays and premiums has put health care out of reach for more people, Collins said. And those on their own without job-based plans often find the individual market unaffordable or inaccessible, especially if they have preexisting conditions, she said.
"Premiums might be quite high or they might not be covered at all," she said. "Because of the underwriting issue, it makes that market problematic for people looking for alternatives."
About 6% of those surveyed had individual insurance.
Medical debt burdens
Household financial problems associated with health care are on the rise as well. One in five adults, including insured and uninsured, currently has medical debt being paid off over time, the survey said. About 44% of those with medical debt reported it was $2,000 or more.
The majority of Americans don't use enough health care to get them in such a bind, Claxton said. "In any given year, 20% of people account for 80% of the costs."
But for those who do end up needing hospital and other expensive care, the bills can be a hardship, especially if they have a bare-bones health plan or no insurance at all, he said.
"When you look at some of the policies now where the out-of-pocket limit might be in the $6,000 to $8,000 range for a family, it's not that hard to get there."
Collins agreed. "One really interesting finding is this affected both uninsured people in lower-income and higher-income households. Rates of debt were actually highest among those with higher incomes," she said, adding that 60% of adults with income of at least $40,000 have problems with medical bills or accrued debt.
More than half of uninsured adults said they had medical-bill problems. Of those, 49% used their entire savings to pay it off, according to the survey. The need to pay medical bills prevented two of five from shelling out for basic necessities such as food, heat or rent.
Care of teeth and oral health often take a hit when insurance disappears. The portion of uninsured adults who had a dental exam in the past year was 35%, half the rate of those with coverage.
The consequences of going without health insurance often lead to a downward spiral of poorer health and costly care, Collins said.
Almost six in 10 adults with chronic illnesses who spent time uninsured in the past year didn't fill or skipped their medications because they couldn't afford them, the study said.
They also were more than twice as likely to go to an emergency room or hospital for care of those chronic conditions than people with health coverage, with 35% of uninsured people with conditions such as asthma or diabetes visiting an emergency room or staying in the hospital overnight compared with 16% of those insured all year who had a chronic condition.
People with gaps in coverage also tended to go without recommended cancer, cholesterol and blood-pressure screenings more often, according to the report.
Aetna
April 27 (Bloomberg) -- Aetna Inc. said first-quarter profit increased 3.2 percent, benefiting from new services gained through acquisitions that helped draw customers.
First-quarter profit for the third-biggest U.S. health insurer rose to $402 million, or 68 cents a share, from $389 million, or 64 cents a share, in the year-earlier period, the Hartford, Connecticut-based company said in a statement on BusinessWire. Revenue rose 15 percent to $6.2 billion.
Aetna bought four companies since 2004, adding services including psychiatric care, disability insurance and tools to organize health costs. The latest acquisition came this month, signaling that newly named Chief Executive Officer Ronald Williams is following his predecessor's plan to raise profitability by selling new, tightly managed products that help employers trim health costs.
``What drives this business now is pricing its products correctly and making the right assumptions on costs,'' said David Heupel, a Minneapolis-based portfolio manager for the Thrivent Large Cap Growth fund, which owns Aetna shares, in an April 25 telephone interview. ``They also are entering into areas that will be more growth driven in the future.''
Aetna shares rose 36 cents to $46.43 yesterday in New York Stock Exchange composite trading. They have risen 34 percent in the past 12 months, beating the 1.4 percent return of the Standard & Poor's 500 Health Care Index.
Membership
Aetna, which said today that membership in its health insurance plans rose 663,000 in the quarter to 15.4 million people, is the third insurer with rising profit for the quarter. Last week, No. 2 UnitedHealth reported a 21 percent gain in first-quarter profit to $899 million. WellPoint, the largest U.S. insurer, yesterday said earnings rose 20 percent to $731.8 million.
Williams in March said integrated health and disability programs for employers was a one of the ``future growth areas'' for the company.
``Our research shows that if we can integrate your health benefits and the disability coverage, we have an ability to help identify the disability sooner and actually -- the employee gets back to work sooner and therefore is more productive for the employee,'' Williams said in an interview.
Williams had said that for 2006 the company expects to have about 400,000 members enrolled in Aetna's drug benefit plans under Medicare, the U.S. government insurance program for people 65 and older. While growth from the new Medicare plan has been cited as a plus for the insurance industry, Heupel said the benefit probably won't add to Aetna's first-quarter profit.
``It may be more of a drag because there is more upfront spending to get everything set up,'' including new marketing efforts and administration.
Forecast
Aetna today raised its forecast for 2006 operating earnings to $2.74 a share to $2.76 a share, from a prior number of $2.71 a share to $2.74 a share.
Williams announced on Feb. 27, during his first month as CEO, that Aetna would buy closely held Broadspire's disability business for $160 million. The purchase ``fits well with Aetna's stated strategy of making acquisitions designed to enhance the company's capabilities,'' he said in a statement.
Under William's predecessor John Rowe, Aetna pushed products beyond traditional health insurance such as dental plans. Rowe also pushed the company to decreasing the portion of revenue needed to operate the business.
During 2005, Aetna acquired Strategic Resource Co., ActiveHealth Management Inc., HMS Healthcare Inc. and certain operations of Magellan Health Services Inc. and Priority Healthcare Corp. The Strategic Resource transaction alone added about 140,000 members, according to Aetna.
(To hear Aetna's conference call at 8:30 a.m. New York time, dial 800-810-0924 from the U.S. or 913-981-4900 from other countries.)
First-quarter profit for the third-biggest U.S. health insurer rose to $402 million, or 68 cents a share, from $389 million, or 64 cents a share, in the year-earlier period, the Hartford, Connecticut-based company said in a statement on BusinessWire. Revenue rose 15 percent to $6.2 billion.
Aetna bought four companies since 2004, adding services including psychiatric care, disability insurance and tools to organize health costs. The latest acquisition came this month, signaling that newly named Chief Executive Officer Ronald Williams is following his predecessor's plan to raise profitability by selling new, tightly managed products that help employers trim health costs.
``What drives this business now is pricing its products correctly and making the right assumptions on costs,'' said David Heupel, a Minneapolis-based portfolio manager for the Thrivent Large Cap Growth fund, which owns Aetna shares, in an April 25 telephone interview. ``They also are entering into areas that will be more growth driven in the future.''
Aetna shares rose 36 cents to $46.43 yesterday in New York Stock Exchange composite trading. They have risen 34 percent in the past 12 months, beating the 1.4 percent return of the Standard & Poor's 500 Health Care Index.
Membership
Aetna, which said today that membership in its health insurance plans rose 663,000 in the quarter to 15.4 million people, is the third insurer with rising profit for the quarter. Last week, No. 2 UnitedHealth reported a 21 percent gain in first-quarter profit to $899 million. WellPoint, the largest U.S. insurer, yesterday said earnings rose 20 percent to $731.8 million.
Williams in March said integrated health and disability programs for employers was a one of the ``future growth areas'' for the company.
``Our research shows that if we can integrate your health benefits and the disability coverage, we have an ability to help identify the disability sooner and actually -- the employee gets back to work sooner and therefore is more productive for the employee,'' Williams said in an interview.
Williams had said that for 2006 the company expects to have about 400,000 members enrolled in Aetna's drug benefit plans under Medicare, the U.S. government insurance program for people 65 and older. While growth from the new Medicare plan has been cited as a plus for the insurance industry, Heupel said the benefit probably won't add to Aetna's first-quarter profit.
``It may be more of a drag because there is more upfront spending to get everything set up,'' including new marketing efforts and administration.
Forecast
Aetna today raised its forecast for 2006 operating earnings to $2.74 a share to $2.76 a share, from a prior number of $2.71 a share to $2.74 a share.
Williams announced on Feb. 27, during his first month as CEO, that Aetna would buy closely held Broadspire's disability business for $160 million. The purchase ``fits well with Aetna's stated strategy of making acquisitions designed to enhance the company's capabilities,'' he said in a statement.
Under William's predecessor John Rowe, Aetna pushed products beyond traditional health insurance such as dental plans. Rowe also pushed the company to decreasing the portion of revenue needed to operate the business.
During 2005, Aetna acquired Strategic Resource Co., ActiveHealth Management Inc., HMS Healthcare Inc. and certain operations of Magellan Health Services Inc. and Priority Healthcare Corp. The Strategic Resource transaction alone added about 140,000 members, according to Aetna.
(To hear Aetna's conference call at 8:30 a.m. New York time, dial 800-810-0924 from the U.S. or 913-981-4900 from other countries.)
California Auto Bill Passes Assembly Insurance Committee
From Insurance Journal
April 27, 2006
California Assembly Bill 2840, co-authored by a bipartisan group of lawmakers including Assemblymembers John J. Benoit, R-Palm Desert; Joe Canciamilla, D-Pittsburg; Nicole Parra, D-Hanford; Doug LaMalfa, R-Richvale; and Lois Wolk, D-Davis, passed through its first committee, the Assembly Insurance Committee on a 7-to-2 bipartisan vote. The bill next goes to Assembly Appropriations. The bill, which requires a statewide study before any changes can be made to the way auto rates are calculated, will safeguard consumers from potential unfair and arbitrary rate increases and will ensure that auto rates continue to be based on the actual cost to insure each driver.
Voting in favor were: Assemblymembers Benoit, Russ Bogh, R-Beaumont, Betty Karnette, D-Long Beach, Sally Lieber, D-Mountain View, Dennis Mountjoy, R-Monrovia, Pedro Nava, D-Santa Barbara, and Juan Vargas, D-San Diego.
AB 2840 is supported by the Regional Council of Rural Counties, California Farm Bureau Federation, local elected officials, local chambers of commerce, taxpayer groups and the three insurance trade associations. The bill is in response to regulations proposed by Insurance Commissioner John Garamendi in December 2005 to change how insurers calculate auto premium rates.
"We are pleased to see members of the legislature recognize the need to protect drivers from arbitrary and unfair rate increases," said Inyo County Supervisor Linda Arcularius who testified at yesterday's hearing. "Hundreds of local elected officials throughout the state have repeatedly expressed concerns to Commissioner Garamendi regarding his misguided proposal, but he has chosen to ignore our concerns."
AB 2840 would require that before any insurance commissioner can make changes to current rating factors there must first be a study to confirm that proposed changes will not lead to unfair or arbitrary rate increases for drivers.
Under Commissioner Garamendi's proposal, certain drivers would receive arbitrary discounts based solely on where they live and insurance companies would be forced to charge rates that are no longer substantially related to the risk of loss (as required by current law). The Insurance Commissioner has repeatedly failed to articulate how it is possible to provide artificial rate decreases for some drivers without shifting cost to other drivers.
A study commissioned by the Department of Insurance demonstrated that implementing the current regulations could result in rate increases as high as 30 percent for some drivers, mostly in the rural and suburban areas. These rate increases will not come about because drivers in these areas are at greater risk but rather to subsidize arbitrary rate decreases for drivers in large, metropolitan areas.
Other AB 2840 backers were supportive of the bill's progress:
"The Regional Council of Rural Counties applauds the passage of AB 2840 through the Assembly Insurance Committee because it will prevent unfair auto insurance rates for all California drivers. The bill will guarantee that automobile insurance rates remain based on the actual costs to insure each driver and prevent drivers in rural areas, many of whom are low income, from paying higher rates so that drivers in heavily congested, major cities can experience rate decreases." said Brent Harrington, President and CEO, Regional Council of Rural Counties. "We continue to oppose Commissioner Garamendi's proposal and believe its ill effects demonstrate the need for AB 2840 and the protections it will provide to drivers throughout California."
"We strongly support AB 2840 and are pleased legislators see the need for this bill. Drivers in rural areas experience fewer accidents and therefore fewer claims, it only makes sense that their risk of getting into an accident should be the determining factor in how much they pay for auto insurance." said California Farm Bureau Federation President Doug Mosebar. CFBF General Counsel Nancy McDonough agrees. "Under Insurance Commissioner Garamendi's plan, this is not the case and drivers in rural areas will end up subsidizing a rate decrease for drivers in large, metropolitan areas. AB 2840 is simple - it will ensure that auto rates remain fair, non-discriminatory and related to the risk of loss," she said.
"AB 2840 is so important because my constituents, and the majority of California drivers for that matter, need proof that their auto insurance rates will not increase under Commissioner Garamendi's plan. A study by his own department found that rates will increase for drivers in my county by 36 percent and drivers in 51 other counties will experience rate increases as well," stated Imperial County Supervisor Gary Wyatt. "Auto insurance rates now are based on actual costs and risks associated with providing insurance to each and every driver and that's how it should be. AB 2840 will prevent any sort of unfair rate increases now and in years to come."
Below is the text of AB 2840:
"The commissioner shall adopt no regulation that would change the weight given to any factor in determining automobile rates and premiums unless the department finds, based upon a study conducted by the California State Library, California Research Bureau, that the proposed change (1) will not result in rates and premiums which are arbitrary or unfairly discriminatory and (2) will result in rates and premiums which are substantially related to the risk of loss."
April 27, 2006
California Assembly Bill 2840, co-authored by a bipartisan group of lawmakers including Assemblymembers John J. Benoit, R-Palm Desert; Joe Canciamilla, D-Pittsburg; Nicole Parra, D-Hanford; Doug LaMalfa, R-Richvale; and Lois Wolk, D-Davis, passed through its first committee, the Assembly Insurance Committee on a 7-to-2 bipartisan vote. The bill next goes to Assembly Appropriations. The bill, which requires a statewide study before any changes can be made to the way auto rates are calculated, will safeguard consumers from potential unfair and arbitrary rate increases and will ensure that auto rates continue to be based on the actual cost to insure each driver.
Voting in favor were: Assemblymembers Benoit, Russ Bogh, R-Beaumont, Betty Karnette, D-Long Beach, Sally Lieber, D-Mountain View, Dennis Mountjoy, R-Monrovia, Pedro Nava, D-Santa Barbara, and Juan Vargas, D-San Diego.
AB 2840 is supported by the Regional Council of Rural Counties, California Farm Bureau Federation, local elected officials, local chambers of commerce, taxpayer groups and the three insurance trade associations. The bill is in response to regulations proposed by Insurance Commissioner John Garamendi in December 2005 to change how insurers calculate auto premium rates.
"We are pleased to see members of the legislature recognize the need to protect drivers from arbitrary and unfair rate increases," said Inyo County Supervisor Linda Arcularius who testified at yesterday's hearing. "Hundreds of local elected officials throughout the state have repeatedly expressed concerns to Commissioner Garamendi regarding his misguided proposal, but he has chosen to ignore our concerns."
AB 2840 would require that before any insurance commissioner can make changes to current rating factors there must first be a study to confirm that proposed changes will not lead to unfair or arbitrary rate increases for drivers.
Under Commissioner Garamendi's proposal, certain drivers would receive arbitrary discounts based solely on where they live and insurance companies would be forced to charge rates that are no longer substantially related to the risk of loss (as required by current law). The Insurance Commissioner has repeatedly failed to articulate how it is possible to provide artificial rate decreases for some drivers without shifting cost to other drivers.
A study commissioned by the Department of Insurance demonstrated that implementing the current regulations could result in rate increases as high as 30 percent for some drivers, mostly in the rural and suburban areas. These rate increases will not come about because drivers in these areas are at greater risk but rather to subsidize arbitrary rate decreases for drivers in large, metropolitan areas.
Other AB 2840 backers were supportive of the bill's progress:
"The Regional Council of Rural Counties applauds the passage of AB 2840 through the Assembly Insurance Committee because it will prevent unfair auto insurance rates for all California drivers. The bill will guarantee that automobile insurance rates remain based on the actual costs to insure each driver and prevent drivers in rural areas, many of whom are low income, from paying higher rates so that drivers in heavily congested, major cities can experience rate decreases." said Brent Harrington, President and CEO, Regional Council of Rural Counties. "We continue to oppose Commissioner Garamendi's proposal and believe its ill effects demonstrate the need for AB 2840 and the protections it will provide to drivers throughout California."
"We strongly support AB 2840 and are pleased legislators see the need for this bill. Drivers in rural areas experience fewer accidents and therefore fewer claims, it only makes sense that their risk of getting into an accident should be the determining factor in how much they pay for auto insurance." said California Farm Bureau Federation President Doug Mosebar. CFBF General Counsel Nancy McDonough agrees. "Under Insurance Commissioner Garamendi's plan, this is not the case and drivers in rural areas will end up subsidizing a rate decrease for drivers in large, metropolitan areas. AB 2840 is simple - it will ensure that auto rates remain fair, non-discriminatory and related to the risk of loss," she said.
"AB 2840 is so important because my constituents, and the majority of California drivers for that matter, need proof that their auto insurance rates will not increase under Commissioner Garamendi's plan. A study by his own department found that rates will increase for drivers in my county by 36 percent and drivers in 51 other counties will experience rate increases as well," stated Imperial County Supervisor Gary Wyatt. "Auto insurance rates now are based on actual costs and risks associated with providing insurance to each and every driver and that's how it should be. AB 2840 will prevent any sort of unfair rate increases now and in years to come."
Below is the text of AB 2840:
"The commissioner shall adopt no regulation that would change the weight given to any factor in determining automobile rates and premiums unless the department finds, based upon a study conducted by the California State Library, California Research Bureau, that the proposed change (1) will not result in rates and premiums which are arbitrary or unfairly discriminatory and (2) will result in rates and premiums which are substantially related to the risk of loss."
Wednesday, April 26, 2006
Variety of variables complicate car insurance picture
By Sara Malik
Read This! writer
Face it, if you have a car, you have to have insurance. And it can cost you some serious cash.
Shopping for insurance can be confusing because a lot of factors determine your rate: age and gender, driving experience, where you live, your car model and make. And prices vary from company to company, so be prepared to shop around and do some research.
One way to control costs is to consider insurance rates for the kind of car you would like to buy. Daphne Lau, an agent for Farmers Insurance in Fremont, said she advises teens to go for older cars because new cars are more expensive to insure.
``A one-year difference can make a day-or-night change in the price,'' she said.
You can also save money with discounts offered by some insurance companies:
Good-student discounts. A high grade-point average, high class ranking, or a place on the dean's list or honor roll can qualify full-time students for lower rates.
Group discounts. Think about being listed as a secondary driver on your parents' policy, Lau said. Being listed as the primary driver of a car is a more expensive option.
Good-driver discounts. Traffic tickets and accidents lead to higher insurance rates.
To illustrate how many factors go into figuring out prices, Lau offered these unofficial rate quotes as examples: A 17-year-old girl who qualifies for the good-student discount, drives a 2004 Honda Civic LX, lives in Fremont and has full coverage with a $1,000 deductible pays $130.33 a month.
Teen boys pay more than teen girls. If the 17-year-old driving the Honda were a boy, the monthly rate for the same policy would jump to $211.47.
Daniel Goulart, a senior at Mission San Jose High School in Fremont, knows he could pay a lot for insurance, so he has done things to keep his rates down.
``For one thing, I've only gotten one ticket,'' he said. ``I've never had any points against me. I've never had a fender bender.''
He said one reason he bought a 1966 Volkswagen Beetle was cheaper insurance.
And thanks to a handful of rate discounts -- good-student discount, good-driver discount and classic-car discount -- Goulart pays $78 a month.
``For a male driver, I don't pay much,'' he said.
Read This! writer
Face it, if you have a car, you have to have insurance. And it can cost you some serious cash.
Shopping for insurance can be confusing because a lot of factors determine your rate: age and gender, driving experience, where you live, your car model and make. And prices vary from company to company, so be prepared to shop around and do some research.
One way to control costs is to consider insurance rates for the kind of car you would like to buy. Daphne Lau, an agent for Farmers Insurance in Fremont, said she advises teens to go for older cars because new cars are more expensive to insure.
``A one-year difference can make a day-or-night change in the price,'' she said.
You can also save money with discounts offered by some insurance companies:
Good-student discounts. A high grade-point average, high class ranking, or a place on the dean's list or honor roll can qualify full-time students for lower rates.
Group discounts. Think about being listed as a secondary driver on your parents' policy, Lau said. Being listed as the primary driver of a car is a more expensive option.
Good-driver discounts. Traffic tickets and accidents lead to higher insurance rates.
To illustrate how many factors go into figuring out prices, Lau offered these unofficial rate quotes as examples: A 17-year-old girl who qualifies for the good-student discount, drives a 2004 Honda Civic LX, lives in Fremont and has full coverage with a $1,000 deductible pays $130.33 a month.
Teen boys pay more than teen girls. If the 17-year-old driving the Honda were a boy, the monthly rate for the same policy would jump to $211.47.
Daniel Goulart, a senior at Mission San Jose High School in Fremont, knows he could pay a lot for insurance, so he has done things to keep his rates down.
``For one thing, I've only gotten one ticket,'' he said. ``I've never had any points against me. I've never had a fender bender.''
He said one reason he bought a 1966 Volkswagen Beetle was cheaper insurance.
And thanks to a handful of rate discounts -- good-student discount, good-driver discount and classic-car discount -- Goulart pays $78 a month.
``For a male driver, I don't pay much,'' he said.
'Healthy NY' Spurs Wisconsin Proposal
Written By: J. P. Wieske
Published In: Health Care News
Publication Date: May 1, 2006
Publisher: The Heartland Institute
In his annual State of the State Address in January, Wisconsin Gov. Jim Doyle (D) proposed a new measure, Healthy Wisconsin, to "help lower health care costs and pass along the savings to middle-class families."
Doyle was proposing to replicate New York's program for the uninsured, known as Healthy New York. The New York program combines a private "mandate-lite" benefit plan with a state reinsurance subsidy. It is available to lower-income workers only. Advocates across the nation are touting the purported success of Healthy New York, and "State Coverage Initiatives"--a Robert Wood Johnson Foundation project--published a profile of the program in January 2005.
But critics argue the program doesn't really address the problem of the uninsured. They say New York policymakers are merely tinkering with a dysfunctional health insurance system of their own making.
High Insurance Costs
New Yorkers currently pay the country's second-highest health insurance premiums. According to a 2004 eHealthInsurance report, only Boston tops New York City's individual health insurance rates. On the state level, another eHealthInsurance report, published in October 2004, found New York state's individual health insurance policy costs are second only to those of New Jersey.
In the group market, New York doesn't fare any better. According to the book Destroying Insurance Markets, co-published by The Heartland Institute and Council for Affordable Health Insurance (CAHI) in 2005, New York is the second most expensive state for group family coverage.
That's important because the more insurance costs, the more people choose to join the ranks of the uninsured. The U.S. Census Bureau reported that 14.7 percent of New Yorkers are uninsured--more than in neighboring states, including Pennsylvania (11.5 percent), New Hampshire and Connecticut (11 percent apiece), and Vermont (10.3 percent). New Jersey, where insurance usually costs a little more than New York, has about the same percentage of uninsured (14.6 percent).
Self-Made Problem
New York's health insurance affordability problem is largely self-made. In 1993, legislators responded to an Empire Blue Cross/Blue Shield financial crisis by imposing guaranteed issue and community rating on the small group and individual markets. By requiring insurers to accept any applicant regardless of health status (guaranteed issue) and forcing them to charge everyone the same premium (community rating), lawmakers hoped to make health insurance policies more affordable for people with pre-existing medical conditions.
They achieved that goal, but at the same time younger and healthier people were forced to pay much more than they would have if insurers had been allowed to underwrite the policies as before. As a result, younger and healthier people began canceling their policies. Those who remained in the pool saw their premiums rise significantly, making coverage unaffordable for most.
Thus the high cost of health insurance in New York and the inevitable growth of the uninsured--both products of previous government reform efforts--forced New York lawmakers to create yet another reform: the Health Care Reform Act of 2000, which established Healthy New York.
Healthy NY Program
Healthy New York limits enrollment to lower-income individuals (sliding scale up to $25,125) who have been uninsured for at least 12 months, or implementation by companies employing 50 or fewer persons. The program is heavily promoted through paid radio, television, and newspaper ads and other methods.
The program lowers premium costs in two ways. First, it limits costs by allowing insurers to offer "mandate-lite" plans not otherwise available in the private market. Second, it subsidizes the coverage by covering 90 percent of insurer claims between $5,000 and $75,000.
The reduction of mandates is an important aspect of the program. Mandated benefits, which require insurers to cover specified providers and treatments, can significantly increase health insurance costs. According to the CAHI report, Health Insurance Mandates in the States 2006, New York has 49 benefit mandates.
Unlike the private market, which is highly regulated in the state, Healthy New York (which uses private firms but is run by the government) is able to offer mandate-lite benefit plans that exclude mandated coverage for mental health services, alcohol and substance abuse treatments, chiropractic care, hospice care, and more. CAHI and many other health insurance groups, think tanks, and health policy experts have supported reducing or eliminating state mandates for years, and more than 10 other states offer some form of mandate-lite programs. What makes Healthy New York unique is that it limits access to mandate-lite policies to uninsured individuals and small businesses that meet the income criteria.
Money Saved?
Despite the lower premium costs and heavy promotion, Healthy New York attracted fewer than 107,000 people by December 2005. The program's 2005 budget of $58 million is expected to grow to about $125 million by 2007.
Does the program make health insurance premiums affordable? The savings for enrollees can be considerable. In Albany County, Healthy New York's monthly plan rates range between $158 (Empire HealthChoice, Inc.) and $222 (Capital District Physicians' Health Plan). The only plan available through eHealthInsurance's Web site for a 25-year-old male would cost more than $335 a month.
Clearly, Healthy New York provides savings for its beneficiaries, but the high prices in the individual market exist primarily because New York's 1993 health insurance reforms destroyed the state's market for individual health insurance. The same person applying for coverage in Lacrosse, Wisconsin--named the most costly health care region in the country by the U.S. Government Accountability Office in September 2005--would receive quotes as low as $41 a month for a policy with a $5,000 deductible. A policy comparable to those from Healthy New York would cost $160 a month without any state subsidy necessary to induce firms to provide it. (See table.)
Mixed Bag
"Giving people access to less-expensive, mandate-lite policies is a good idea," CAHI Director Merrill Matthews said. "But why restrict those policies to low-income uninsured people? Many New Yorkers who currently have insurance coverage have lower or moderate incomes. If mandate-lite policies increase access to affordable coverage, why not let every New Yorker have that opportunity?"
The attempt to subsidize coverage for lower-income, uninsured workers might be one way of doing that, Matthews said, but he questioned the tactic of doing it through the state government.
"A direct subsidy, perhaps with a tax credit applied toward an individual's state income tax, would be more efficient and transparent," Matthews explained.
Matthews says Healthy New York is a poor way to fix the state's dysfunctional health insurance market. What the state should do, he suggests, is repeal its guaranteed issue and community rating laws, relax some of its mandates and regulations, and allow more choice and innovation in the health insurance market. Insurers would return to the state, premiums would drop, and the state wouldn't need Healthy New York, he points out. Plus, New York would finally have a health care reform model worth imitating.
Published In: Health Care News
Publication Date: May 1, 2006
Publisher: The Heartland Institute
In his annual State of the State Address in January, Wisconsin Gov. Jim Doyle (D) proposed a new measure, Healthy Wisconsin, to "help lower health care costs and pass along the savings to middle-class families."
Doyle was proposing to replicate New York's program for the uninsured, known as Healthy New York. The New York program combines a private "mandate-lite" benefit plan with a state reinsurance subsidy. It is available to lower-income workers only. Advocates across the nation are touting the purported success of Healthy New York, and "State Coverage Initiatives"--a Robert Wood Johnson Foundation project--published a profile of the program in January 2005.
But critics argue the program doesn't really address the problem of the uninsured. They say New York policymakers are merely tinkering with a dysfunctional health insurance system of their own making.
High Insurance Costs
New Yorkers currently pay the country's second-highest health insurance premiums. According to a 2004 eHealthInsurance report, only Boston tops New York City's individual health insurance rates. On the state level, another eHealthInsurance report, published in October 2004, found New York state's individual health insurance policy costs are second only to those of New Jersey.
In the group market, New York doesn't fare any better. According to the book Destroying Insurance Markets, co-published by The Heartland Institute and Council for Affordable Health Insurance (CAHI) in 2005, New York is the second most expensive state for group family coverage.
That's important because the more insurance costs, the more people choose to join the ranks of the uninsured. The U.S. Census Bureau reported that 14.7 percent of New Yorkers are uninsured--more than in neighboring states, including Pennsylvania (11.5 percent), New Hampshire and Connecticut (11 percent apiece), and Vermont (10.3 percent). New Jersey, where insurance usually costs a little more than New York, has about the same percentage of uninsured (14.6 percent).
Self-Made Problem
New York's health insurance affordability problem is largely self-made. In 1993, legislators responded to an Empire Blue Cross/Blue Shield financial crisis by imposing guaranteed issue and community rating on the small group and individual markets. By requiring insurers to accept any applicant regardless of health status (guaranteed issue) and forcing them to charge everyone the same premium (community rating), lawmakers hoped to make health insurance policies more affordable for people with pre-existing medical conditions.
They achieved that goal, but at the same time younger and healthier people were forced to pay much more than they would have if insurers had been allowed to underwrite the policies as before. As a result, younger and healthier people began canceling their policies. Those who remained in the pool saw their premiums rise significantly, making coverage unaffordable for most.
Thus the high cost of health insurance in New York and the inevitable growth of the uninsured--both products of previous government reform efforts--forced New York lawmakers to create yet another reform: the Health Care Reform Act of 2000, which established Healthy New York.
Healthy NY Program
Healthy New York limits enrollment to lower-income individuals (sliding scale up to $25,125) who have been uninsured for at least 12 months, or implementation by companies employing 50 or fewer persons. The program is heavily promoted through paid radio, television, and newspaper ads and other methods.
The program lowers premium costs in two ways. First, it limits costs by allowing insurers to offer "mandate-lite" plans not otherwise available in the private market. Second, it subsidizes the coverage by covering 90 percent of insurer claims between $5,000 and $75,000.
The reduction of mandates is an important aspect of the program. Mandated benefits, which require insurers to cover specified providers and treatments, can significantly increase health insurance costs. According to the CAHI report, Health Insurance Mandates in the States 2006, New York has 49 benefit mandates.
Unlike the private market, which is highly regulated in the state, Healthy New York (which uses private firms but is run by the government) is able to offer mandate-lite benefit plans that exclude mandated coverage for mental health services, alcohol and substance abuse treatments, chiropractic care, hospice care, and more. CAHI and many other health insurance groups, think tanks, and health policy experts have supported reducing or eliminating state mandates for years, and more than 10 other states offer some form of mandate-lite programs. What makes Healthy New York unique is that it limits access to mandate-lite policies to uninsured individuals and small businesses that meet the income criteria.
Money Saved?
Despite the lower premium costs and heavy promotion, Healthy New York attracted fewer than 107,000 people by December 2005. The program's 2005 budget of $58 million is expected to grow to about $125 million by 2007.
Does the program make health insurance premiums affordable? The savings for enrollees can be considerable. In Albany County, Healthy New York's monthly plan rates range between $158 (Empire HealthChoice, Inc.) and $222 (Capital District Physicians' Health Plan). The only plan available through eHealthInsurance's Web site for a 25-year-old male would cost more than $335 a month.
Clearly, Healthy New York provides savings for its beneficiaries, but the high prices in the individual market exist primarily because New York's 1993 health insurance reforms destroyed the state's market for individual health insurance. The same person applying for coverage in Lacrosse, Wisconsin--named the most costly health care region in the country by the U.S. Government Accountability Office in September 2005--would receive quotes as low as $41 a month for a policy with a $5,000 deductible. A policy comparable to those from Healthy New York would cost $160 a month without any state subsidy necessary to induce firms to provide it. (See table.)
Mixed Bag
"Giving people access to less-expensive, mandate-lite policies is a good idea," CAHI Director Merrill Matthews said. "But why restrict those policies to low-income uninsured people? Many New Yorkers who currently have insurance coverage have lower or moderate incomes. If mandate-lite policies increase access to affordable coverage, why not let every New Yorker have that opportunity?"
The attempt to subsidize coverage for lower-income, uninsured workers might be one way of doing that, Matthews said, but he questioned the tactic of doing it through the state government.
"A direct subsidy, perhaps with a tax credit applied toward an individual's state income tax, would be more efficient and transparent," Matthews explained.
Matthews says Healthy New York is a poor way to fix the state's dysfunctional health insurance market. What the state should do, he suggests, is repeal its guaranteed issue and community rating laws, relax some of its mandates and regulations, and allow more choice and innovation in the health insurance market. Insurers would return to the state, premiums would drop, and the state wouldn't need Healthy New York, he points out. Plus, New York would finally have a health care reform model worth imitating.
Tuesday, April 25, 2006
Louisiana Small Business Health Insurance
Free Seminar Scheduled on Health Insurance Options for Small Business
With last year´s hurricanes causing so much hardship for Louisiana small businesses, the state insurance commissioner and health providers are looking for new ways to help inform businees owners about their insurance options.
Here is a press release from the insurance commissioner regarding a free seminar in Baton Rouge next week:
Small business owners who want to provide their employees with health insurance coverage will have the chance to hear about a range of affordable options at a free seminar on Tuesday, May 2, from 8:30 to 11:45 a.m. at the Associated Grocers conference center on Anselmo Lane in Baton Rouge.
The seminar is one of several activities planned for the fourth Cover the Uninsured Week, a nonpartisan, nationwide effort to spotlight the fact that too many Americans are uninsured. From May 1-7, events will take place throughout the country, including press conferences, health and enrollment fairs, business events and campus and interfaith activities.
In the Baton Rouge area, events will include an interfaith prayer breakfast on Thursday, May 4, and a health fair on Saturday, May 6. Nearly 20 percent of adult Louisianians live without health insurance, many of them employed full-time.
“All Louisiana citizens — regardless of their insurance status — need to get involved and make their opinions count,” said James J. Donelon, Commissioner of the Louisiana Department of Insurance — one of the local organizers of Cover the Uninsured Week. “Most of us are concerned about the rising costs of health care, empathize with the 945,000 Louisianians who have no coverage, and recognize that we too could one day find ourselves without health insurance. We all need to add our voices to share our concern about this urgent issue.”
The May 2 seminar will feature panel discussions on insurance basics, consumer-directed health care, health savings accounts, how to work with a broker and other topics. Attendees will receive several useful handouts on insurance options and will also be able to visit tabletop exhibits by several major group health insurance carriers in our area, including Blue Cross and Blue Shield of Louisiana, Coventry and United Healthcare. Continental breakfast also will be provided.
Any small business owner in the greater Baton Rouge area is encouraged to attend, but attendance is limited by space; those interested should e-mail Karen Krumholt immediately at kkrumholt@ldi.state.la.us or call (225) 219-9343 to register.
In addition to the Louisiana Department of Insurance, members of the local coalition organizing Cover the Uninsured Week activities include the Louisiana Department of Health and Hospitals, Blue Cross and Blue Shield of Louisiana, Louisiana Business Group on Health, Louisiana Small Business Development Center Network and the Greater Baton Rouge Federation of Churches.
Organizations sponsoring Cover the Uninsured Week nationwide include the U.S. Chamber of Commerce, AFL-CIO, Healthcare Leadership Council, AARP, United Way of America, American Medical Association, National Medical Association, American Nurses Association, Families USA, Blue Cross and Blue Shield Association, America’s Health Insurance Plans, American Hospital Association, Federation of American Hospitals, Catholic Health Association of the United States, Service Employees International Union, The California Endowment, W.K. Kellogg Foundation, and the Robert Wood Johnson Foundation.
According to the most recent figures available from the U.S. Census Bureau, nearly 46 million Americans — including more than 8 million children — have no health coverage. The Institute of Medicine estimates that nearly 50 people die each day because they are uninsured and cannot get the medical care they need.
Organizers of Cover the Uninsured Week — the largest campaign in history to focus attention on the need to secure health coverage for Americans — will encourage people from all walks of life to talk with their friends and neighbors and get involved. An interactive website will help people express their concern by instantly sending an e-mail to their member of Congress.
With last year´s hurricanes causing so much hardship for Louisiana small businesses, the state insurance commissioner and health providers are looking for new ways to help inform businees owners about their insurance options.
Here is a press release from the insurance commissioner regarding a free seminar in Baton Rouge next week:
Small business owners who want to provide their employees with health insurance coverage will have the chance to hear about a range of affordable options at a free seminar on Tuesday, May 2, from 8:30 to 11:45 a.m. at the Associated Grocers conference center on Anselmo Lane in Baton Rouge.
The seminar is one of several activities planned for the fourth Cover the Uninsured Week, a nonpartisan, nationwide effort to spotlight the fact that too many Americans are uninsured. From May 1-7, events will take place throughout the country, including press conferences, health and enrollment fairs, business events and campus and interfaith activities.
In the Baton Rouge area, events will include an interfaith prayer breakfast on Thursday, May 4, and a health fair on Saturday, May 6. Nearly 20 percent of adult Louisianians live without health insurance, many of them employed full-time.
“All Louisiana citizens — regardless of their insurance status — need to get involved and make their opinions count,” said James J. Donelon, Commissioner of the Louisiana Department of Insurance — one of the local organizers of Cover the Uninsured Week. “Most of us are concerned about the rising costs of health care, empathize with the 945,000 Louisianians who have no coverage, and recognize that we too could one day find ourselves without health insurance. We all need to add our voices to share our concern about this urgent issue.”
The May 2 seminar will feature panel discussions on insurance basics, consumer-directed health care, health savings accounts, how to work with a broker and other topics. Attendees will receive several useful handouts on insurance options and will also be able to visit tabletop exhibits by several major group health insurance carriers in our area, including Blue Cross and Blue Shield of Louisiana, Coventry and United Healthcare. Continental breakfast also will be provided.
Any small business owner in the greater Baton Rouge area is encouraged to attend, but attendance is limited by space; those interested should e-mail Karen Krumholt immediately at kkrumholt@ldi.state.la.us or call (225) 219-9343 to register.
In addition to the Louisiana Department of Insurance, members of the local coalition organizing Cover the Uninsured Week activities include the Louisiana Department of Health and Hospitals, Blue Cross and Blue Shield of Louisiana, Louisiana Business Group on Health, Louisiana Small Business Development Center Network and the Greater Baton Rouge Federation of Churches.
Organizations sponsoring Cover the Uninsured Week nationwide include the U.S. Chamber of Commerce, AFL-CIO, Healthcare Leadership Council, AARP, United Way of America, American Medical Association, National Medical Association, American Nurses Association, Families USA, Blue Cross and Blue Shield Association, America’s Health Insurance Plans, American Hospital Association, Federation of American Hospitals, Catholic Health Association of the United States, Service Employees International Union, The California Endowment, W.K. Kellogg Foundation, and the Robert Wood Johnson Foundation.
According to the most recent figures available from the U.S. Census Bureau, nearly 46 million Americans — including more than 8 million children — have no health coverage. The Institute of Medicine estimates that nearly 50 people die each day because they are uninsured and cannot get the medical care they need.
Organizers of Cover the Uninsured Week — the largest campaign in history to focus attention on the need to secure health coverage for Americans — will encourage people from all walks of life to talk with their friends and neighbors and get involved. An interactive website will help people express their concern by instantly sending an e-mail to their member of Congress.
5 Tips: Cut your car insurance costs
By Gerri Willis, CNNMoney.com contributing columnist
April 24, 2006: 2:23 PM EDT
NEW YORK (CNNMoney.com) - Owning a car these days is becoming more expensive. Driving a car costs about $7,834 a year according to the Automobile Association of America.
We're not just talking about higher gas prices. Insurance alone costs drivers an average of $939 a year. In today's Five Tips we're going to tell you what you can do to cut these costs.
1. Get credit for driving less
High gas prices are encouraging more people to cut down on their driving. If you're one of those people, make sure your auto insurance company knows it. Bob Hunter of the Consumer Federation of America says you could save 10 to 15 percent if you stop driving to work, or join a carpool.
Find out from your insurer what the low mileage discount is. Generally if you drive less than 7,500 miles a year you'll qualify for a 5 percent discount. Driving less than 5,000 miles a year will give you 10 percent off your insurance.
2. Check your credit report
Your credit history may be influencing your auto insurance premiums. More than 90 percent of auto insurance companies use your credit information to determine how likely you are to file a claim on an insurance policy. If you don't pay your bills on time, you're going to pay higher premiums.
But make sure you're on the lookout. A 2004 survey found that 79 percent of credit histories contained some type of error. Your best bet is to get your free credit report at www.annualcreditreport.com or call 1-877-322-8228. Then report any errors to the Federal Trade Commission. There is an online form letter at www.ftc.gov where you can dispute information on your credit report.
3. Get a professional discount
In some states large insurers like Allstate give discounts for people in certain low-risk professions. So if you're a mail carrier, a biologist, a vet, a speech therapist or an economist in Alabama, South Carolina or Idaho, you'll be able to get 10 percent off your insurance, according to Allstate. But if you're locksmith, an artist, a clergy member, an accountant or a teacher, you'll qualify for a 5 percent discount.
Why the discrepancy? Mike Siemienas of Allstate says some professions just have fewer losses. Horace Mann Insurance (which sells auto insurance in every state except Hawaii, New Jersey and New York) offers discounts to teachers who belong to state education associations or the National Education Association (NEA). Horace Mann's discounts start at 8 percent. For more information, go to www.horacemann.com.
4. Join the club
You may get discounts, not only on what you do, but how you spend your time. Some insurance companies offer discounts to young people who volunteer or join civic or community organizations, like the Eagle Scouts, says David Champion of Consumer Reports.
Other organizations, like the Automobile Association of America, will lower your rates. You should also check with your employer to see if there are any group insurance rates. If you're thinking about switching your insurance company, make sure you ask about these kinds of discounts.
5. Drop coverage on your old jalopy
If you have an old car, you may want to consider dropping collision and comprehensive coverage. That's because you'll probably pay as much in premiums over a few years as you'd pay to replace or repair the car. To gauge its current market value, look up used-car prices for your model at Kelley Blue Book at www.kbb.com. A good rule of thumb: if it's less than $2,000, forget the coverage.
April 24, 2006: 2:23 PM EDT
NEW YORK (CNNMoney.com) - Owning a car these days is becoming more expensive. Driving a car costs about $7,834 a year according to the Automobile Association of America.
We're not just talking about higher gas prices. Insurance alone costs drivers an average of $939 a year. In today's Five Tips we're going to tell you what you can do to cut these costs.
1. Get credit for driving less
High gas prices are encouraging more people to cut down on their driving. If you're one of those people, make sure your auto insurance company knows it. Bob Hunter of the Consumer Federation of America says you could save 10 to 15 percent if you stop driving to work, or join a carpool.
Find out from your insurer what the low mileage discount is. Generally if you drive less than 7,500 miles a year you'll qualify for a 5 percent discount. Driving less than 5,000 miles a year will give you 10 percent off your insurance.
2. Check your credit report
Your credit history may be influencing your auto insurance premiums. More than 90 percent of auto insurance companies use your credit information to determine how likely you are to file a claim on an insurance policy. If you don't pay your bills on time, you're going to pay higher premiums.
But make sure you're on the lookout. A 2004 survey found that 79 percent of credit histories contained some type of error. Your best bet is to get your free credit report at www.annualcreditreport.com or call 1-877-322-8228. Then report any errors to the Federal Trade Commission. There is an online form letter at www.ftc.gov where you can dispute information on your credit report.
3. Get a professional discount
In some states large insurers like Allstate give discounts for people in certain low-risk professions. So if you're a mail carrier, a biologist, a vet, a speech therapist or an economist in Alabama, South Carolina or Idaho, you'll be able to get 10 percent off your insurance, according to Allstate. But if you're locksmith, an artist, a clergy member, an accountant or a teacher, you'll qualify for a 5 percent discount.
Why the discrepancy? Mike Siemienas of Allstate says some professions just have fewer losses. Horace Mann Insurance (which sells auto insurance in every state except Hawaii, New Jersey and New York) offers discounts to teachers who belong to state education associations or the National Education Association (NEA). Horace Mann's discounts start at 8 percent. For more information, go to www.horacemann.com.
4. Join the club
You may get discounts, not only on what you do, but how you spend your time. Some insurance companies offer discounts to young people who volunteer or join civic or community organizations, like the Eagle Scouts, says David Champion of Consumer Reports.
Other organizations, like the Automobile Association of America, will lower your rates. You should also check with your employer to see if there are any group insurance rates. If you're thinking about switching your insurance company, make sure you ask about these kinds of discounts.
5. Drop coverage on your old jalopy
If you have an old car, you may want to consider dropping collision and comprehensive coverage. That's because you'll probably pay as much in premiums over a few years as you'd pay to replace or repair the car. To gauge its current market value, look up used-car prices for your model at Kelley Blue Book at www.kbb.com. A good rule of thumb: if it's less than $2,000, forget the coverage.
Monday, April 24, 2006
The health insurance gamble
By Jennifer Gordon
Dallas Business Journal
Updated: 8:00 p.m. ET April 23, 2006
When Alvin Wirthlin started his patent-application business in Lucas a few years ago, the decision about purchasing health insurance came down to a risk vs. cost analysis.
Wirthlin, who decided to take the risk instead of pay the cost of insurance, is not alone.
A growing number of small business owners and full-time workers make up about 80% of the America's 46 million people without health insurance. The number of people without such insurance increased 11.2% from 2001 to 2004.
Though California beats Texas in absolute numbers, Texas ranks No. 1 for the highest percentage of its population lacking health insurance, with 25%, or one out of every four people, living without coverage. That translates into 5 million people without insurance in the Lone Star State, and an estimated 700,000 in Dallas County alone.
"That's not the kind of rate you want," said Joel Allison, president and CEO of Baylor Health Care System. "The uninsured is a major issue impacting health care."
Nationwide, 16% of the population is uninsured, according to an October 2005 report from the Employee Benefits Research Institute.
Like those people, Wirthlin decided to risk it and forego health insurance coverage for him, his wife and their five children. Paying $180 for two doctor's office visits a year made much more sense to him than paying $400 to $500 a month in premiums.
That logic worked until Wirthlin suffered a recent back injury. So far, he's paid $90 for an office visit and $600 for an MRI, which was about a 50% discount by the MRI provider when it learned Wirthlin was uninsured.
The bills to date have been low because of a close friend who is an orthopedic surgeon, but if surgery is needed Wirthlin is looking at a bill in the tens of thousands of dollars. Right now he's waiting to see whether he'll have the surgery, which doctors have told him he needs.
"I wish I could have known that there would have been a catastrophic event so I could plan for it," Wirthlin said. "It's just one of those risks you take. In our case the risk didn't work out, but we were lucky for four years."
Sobering statistics
Rolling the dice and foregoing insurance is something a growing number of middle-class people with incomes of $50,000 a year or greater are trying. That segment is the fastest-growing group among the nation's 46 million people without health insurance, health care officials said.
In 2003, 17% of the uninsured were families with incomes of more than $75,000. Another 16% of the uninsured had family incomes of $50,000 to $74,999, while 34% of the uninsured had incomes of less than $25,000, according to a recent Texas Hospital Association report.
Immigrants also make up a portion of the uninsured, though possibly not as much as many would think, based on anecdotal evidence from area health care providers. Individual hospitals can't ask patients whether they're in the country illegally, so it's tough to track. But a 2005 Kaiser Family Foundation report found that, between 2000 and 2003, the number of uninsured native citizens increased by 3.6 million, while the number of noncitizens increased by 1.2 million.
"All the hospitals are seeing that spill into their system," said David Cecero, president and CEO of JPS Health Network in Fort Worth.
Overall, the uninsured just don't have the ability to use the entire health care system -- meaning they can use the emergency rooms but often can't be seen by specialists, said Don Spies, director of health initiatives for District One of the Dallas County Commissioners Court and a former health care consultant. "They're hard-working people. They're salt-of-the-earth people."
The uninsured face a host of challenges including poorer health and high medical bills. Employers with uninsured workers typically have less-productive employees and more sick days, because they're distracted by undiagnosed medical conditions and don't recieve appropriate care, health care officials said.
Hidden tax
Also, employers who sponsor insurance coverage face a higher cost -- a hidden tax, if you will -- built into their premiums because of the cost of caring for the uninsured. That's because health care providers pass along the cost to insurance companies when rates are renegotiated, and that additional cost is in turn passed on to policyholders.
And those premiums haven't just been slowly creeping up in recent years, as any business owner who has received a rate quote can tell you.
Premiums increased an average of 9.2% in 2005, which is four times the increase in earnings of 2.7% and more than two times the rate of inflation, 3.5%, according to the 2005 Annual Employer Health Benefits Survey from the Kaiser Family Foundation and Health Research and Educational Trust. Premiums have increased 73% since 2000.
In addition, hospitals and other health care providers are increasingly saddled with more bad debt and uncompensated care, a trend that hospitals say can't continue indefinitely without destroying the system. Bad debt is any portion of the bill that can't be collected.
"As we've watched the evolution of the cost of health care, I think we've created for ourselves a very vicious cycle which,bottom line, in my view, will take the system down if not corrected," said Doug Hawthorne, a 36-year Texas Health Resources veteran and CEO of the Arlington-based system. "Today it is the coverage issue. And those who can pay are ultimately paying for those that can't."
For public hospitals like Parkland Memorial Hospital in Dallas, patients with traditional insurance make up such a small portion of their overall business that it's virtually impossible to charge insurers more to cover some of the cost of the uninsured patients, said Dr. Ron Anderson, president and CEO of Parkland Health & Hospital Sytem. "I have no place to shift it to, except the taxpayer."
Parkland previously saw 57% of annual hospital admissions for charity patients, but that percentage has decreased in recent years, he added.
"We now see more than we've ever seen before and increased in absolute numbers, but percentage-wise we're down to 47%, which means the work at Baylor has grown, the work at other hospitals has grown and at some point they're going to find it very, very difficult to continue to provide charity care at those levels," Anderson said.
'More critical'
Pretty much all Texas hospitals, not just the public hospitals, feel squeezed financially, said John Hawkins, vice president of government relations for the Texas Hospital Association. "It's becoming more critical now."
In 2004, Texas hospitals provided $9.2 billion worth of uncompensated care, which includes bad debt expenses, according to information from the Texas Hospital Association. That's compared with $3 billion in uncompensated care in 1993. On a national level, uncompensated care increased to $60 billion from $25 billion during the same time frame.
For 2006, JPS Health Network is approaching the $300 million mark for uncompensated care, up from $275 million in 2005 and $175 million in 2001, Cecero said.
For Methodist Health System, the cost of bad debt and charity care makes up 33% of the system's nongovernmental business, said Michael Schaefer, Methodist's executive vice president and chief financial officer. "That ought to give you a sense for how much more we have to charge people who have insurance to pay for those that don't have any insurance or have very poor insurance."
Overall, Methodist has seen a 10% increase in this type of care year-over-year since 2004, said Howard Chase, Methodist's president and CEO. "Not only is it continuing to go up in dollars, but the rate doesn't seem to be diminishing. It's already a major issue for us and if that trend continues, it becomes a bigger issue every year."
Mary Grealy, president of the Washington, D.C.-based Health Leadership Council, says everyone is paying.
"Everyone is affected by this, whether you're a provider of health care services or if you're an employer that offers health insurance to your employees," Grealy said. "We're all paying for it."
Medical City doesn't get many uninsured patients because of its location in a mostly affluent area. Last year, for-profit Medical City spent $50 million on uncompensated care, which is a double-digit increase over the past three years.
"The dot-com bubble burst had a huge and dramatic impact on us," explained Medical City CEO Britt Berrett, who said the layoffs and tougher financial situation hurt the hospital's bottom line as previously insured patients then had no coverage.
When it comes to charity cases, aside from caring for individuals who come to the emergency room, Medical City picks and chooses the patients who receive free care. Other hospitals also do this, but typically on the back end where bills are forgiven for some.
Ultimately, Berrett says he's not concerned about the uninsured who aren't offered health insurance or even those who are eligible for coverage but truly can't afford it. "I'm concerned about individuals who buy BMWs, but elect not to buy health insurance for themselves and their families," he said.
Individuals who make those choices also concern Parkland's Anderson. "In a fashion they create a free-rider system," he said.
In a way, he and others believe, hospital attitudes toward treating those who need care also contribute to the problem, ironically enough.
Says Anderson: "They know that our culture is such that we value human life so much so that we're going to take care of them. That's a problem in this country, and I think we're going to have to deal with this free-rider issue."
Unless everyone starts carrying insurance or more public funding becomes available, the system is set up for failure, Anderson said. "It's magical thinking to think we're going to be there if we have a third of the population uninsured and can't pay. No other industry could do that."
Hawthorne agreed, adding that he's concerned about the long-term viability of health care providers under the current system.
"When we add it all up and look at the economics, it's a crisis in the making and will in some way, at some point, begin to necessitate some stricter rationing of care and maybe even some levels of care, which this country certainly has not been in favor of," Hawthorne said. "It could be the straw that breaks the camel's back for delivery of health services in this country."
Dallas Business Journal
Updated: 8:00 p.m. ET April 23, 2006
When Alvin Wirthlin started his patent-application business in Lucas a few years ago, the decision about purchasing health insurance came down to a risk vs. cost analysis.
Wirthlin, who decided to take the risk instead of pay the cost of insurance, is not alone.
A growing number of small business owners and full-time workers make up about 80% of the America's 46 million people without health insurance. The number of people without such insurance increased 11.2% from 2001 to 2004.
Though California beats Texas in absolute numbers, Texas ranks No. 1 for the highest percentage of its population lacking health insurance, with 25%, or one out of every four people, living without coverage. That translates into 5 million people without insurance in the Lone Star State, and an estimated 700,000 in Dallas County alone.
"That's not the kind of rate you want," said Joel Allison, president and CEO of Baylor Health Care System. "The uninsured is a major issue impacting health care."
Nationwide, 16% of the population is uninsured, according to an October 2005 report from the Employee Benefits Research Institute.
Like those people, Wirthlin decided to risk it and forego health insurance coverage for him, his wife and their five children. Paying $180 for two doctor's office visits a year made much more sense to him than paying $400 to $500 a month in premiums.
That logic worked until Wirthlin suffered a recent back injury. So far, he's paid $90 for an office visit and $600 for an MRI, which was about a 50% discount by the MRI provider when it learned Wirthlin was uninsured.
The bills to date have been low because of a close friend who is an orthopedic surgeon, but if surgery is needed Wirthlin is looking at a bill in the tens of thousands of dollars. Right now he's waiting to see whether he'll have the surgery, which doctors have told him he needs.
"I wish I could have known that there would have been a catastrophic event so I could plan for it," Wirthlin said. "It's just one of those risks you take. In our case the risk didn't work out, but we were lucky for four years."
Sobering statistics
Rolling the dice and foregoing insurance is something a growing number of middle-class people with incomes of $50,000 a year or greater are trying. That segment is the fastest-growing group among the nation's 46 million people without health insurance, health care officials said.
In 2003, 17% of the uninsured were families with incomes of more than $75,000. Another 16% of the uninsured had family incomes of $50,000 to $74,999, while 34% of the uninsured had incomes of less than $25,000, according to a recent Texas Hospital Association report.
Immigrants also make up a portion of the uninsured, though possibly not as much as many would think, based on anecdotal evidence from area health care providers. Individual hospitals can't ask patients whether they're in the country illegally, so it's tough to track. But a 2005 Kaiser Family Foundation report found that, between 2000 and 2003, the number of uninsured native citizens increased by 3.6 million, while the number of noncitizens increased by 1.2 million.
"All the hospitals are seeing that spill into their system," said David Cecero, president and CEO of JPS Health Network in Fort Worth.
Overall, the uninsured just don't have the ability to use the entire health care system -- meaning they can use the emergency rooms but often can't be seen by specialists, said Don Spies, director of health initiatives for District One of the Dallas County Commissioners Court and a former health care consultant. "They're hard-working people. They're salt-of-the-earth people."
The uninsured face a host of challenges including poorer health and high medical bills. Employers with uninsured workers typically have less-productive employees and more sick days, because they're distracted by undiagnosed medical conditions and don't recieve appropriate care, health care officials said.
Hidden tax
Also, employers who sponsor insurance coverage face a higher cost -- a hidden tax, if you will -- built into their premiums because of the cost of caring for the uninsured. That's because health care providers pass along the cost to insurance companies when rates are renegotiated, and that additional cost is in turn passed on to policyholders.
And those premiums haven't just been slowly creeping up in recent years, as any business owner who has received a rate quote can tell you.
Premiums increased an average of 9.2% in 2005, which is four times the increase in earnings of 2.7% and more than two times the rate of inflation, 3.5%, according to the 2005 Annual Employer Health Benefits Survey from the Kaiser Family Foundation and Health Research and Educational Trust. Premiums have increased 73% since 2000.
In addition, hospitals and other health care providers are increasingly saddled with more bad debt and uncompensated care, a trend that hospitals say can't continue indefinitely without destroying the system. Bad debt is any portion of the bill that can't be collected.
"As we've watched the evolution of the cost of health care, I think we've created for ourselves a very vicious cycle which,bottom line, in my view, will take the system down if not corrected," said Doug Hawthorne, a 36-year Texas Health Resources veteran and CEO of the Arlington-based system. "Today it is the coverage issue. And those who can pay are ultimately paying for those that can't."
For public hospitals like Parkland Memorial Hospital in Dallas, patients with traditional insurance make up such a small portion of their overall business that it's virtually impossible to charge insurers more to cover some of the cost of the uninsured patients, said Dr. Ron Anderson, president and CEO of Parkland Health & Hospital Sytem. "I have no place to shift it to, except the taxpayer."
Parkland previously saw 57% of annual hospital admissions for charity patients, but that percentage has decreased in recent years, he added.
"We now see more than we've ever seen before and increased in absolute numbers, but percentage-wise we're down to 47%, which means the work at Baylor has grown, the work at other hospitals has grown and at some point they're going to find it very, very difficult to continue to provide charity care at those levels," Anderson said.
'More critical'
Pretty much all Texas hospitals, not just the public hospitals, feel squeezed financially, said John Hawkins, vice president of government relations for the Texas Hospital Association. "It's becoming more critical now."
In 2004, Texas hospitals provided $9.2 billion worth of uncompensated care, which includes bad debt expenses, according to information from the Texas Hospital Association. That's compared with $3 billion in uncompensated care in 1993. On a national level, uncompensated care increased to $60 billion from $25 billion during the same time frame.
For 2006, JPS Health Network is approaching the $300 million mark for uncompensated care, up from $275 million in 2005 and $175 million in 2001, Cecero said.
For Methodist Health System, the cost of bad debt and charity care makes up 33% of the system's nongovernmental business, said Michael Schaefer, Methodist's executive vice president and chief financial officer. "That ought to give you a sense for how much more we have to charge people who have insurance to pay for those that don't have any insurance or have very poor insurance."
Overall, Methodist has seen a 10% increase in this type of care year-over-year since 2004, said Howard Chase, Methodist's president and CEO. "Not only is it continuing to go up in dollars, but the rate doesn't seem to be diminishing. It's already a major issue for us and if that trend continues, it becomes a bigger issue every year."
Mary Grealy, president of the Washington, D.C.-based Health Leadership Council, says everyone is paying.
"Everyone is affected by this, whether you're a provider of health care services or if you're an employer that offers health insurance to your employees," Grealy said. "We're all paying for it."
Medical City doesn't get many uninsured patients because of its location in a mostly affluent area. Last year, for-profit Medical City spent $50 million on uncompensated care, which is a double-digit increase over the past three years.
"The dot-com bubble burst had a huge and dramatic impact on us," explained Medical City CEO Britt Berrett, who said the layoffs and tougher financial situation hurt the hospital's bottom line as previously insured patients then had no coverage.
When it comes to charity cases, aside from caring for individuals who come to the emergency room, Medical City picks and chooses the patients who receive free care. Other hospitals also do this, but typically on the back end where bills are forgiven for some.
Ultimately, Berrett says he's not concerned about the uninsured who aren't offered health insurance or even those who are eligible for coverage but truly can't afford it. "I'm concerned about individuals who buy BMWs, but elect not to buy health insurance for themselves and their families," he said.
Individuals who make those choices also concern Parkland's Anderson. "In a fashion they create a free-rider system," he said.
In a way, he and others believe, hospital attitudes toward treating those who need care also contribute to the problem, ironically enough.
Says Anderson: "They know that our culture is such that we value human life so much so that we're going to take care of them. That's a problem in this country, and I think we're going to have to deal with this free-rider issue."
Unless everyone starts carrying insurance or more public funding becomes available, the system is set up for failure, Anderson said. "It's magical thinking to think we're going to be there if we have a third of the population uninsured and can't pay. No other industry could do that."
Hawthorne agreed, adding that he's concerned about the long-term viability of health care providers under the current system.
"When we add it all up and look at the economics, it's a crisis in the making and will in some way, at some point, begin to necessitate some stricter rationing of care and maybe even some levels of care, which this country certainly has not been in favor of," Hawthorne said. "It could be the straw that breaks the camel's back for delivery of health services in this country."
Universal Health Care?
Massachusetts Governor Mitt Romney signed a bill recently that's being praised as a model for how to achieve "universal" health care. But while the governor claims his plan is market based, it does little to reform the regulations that have made coverage in his state among the most expensive in the country.
How bad are Massachusetts' insurance regulations? One good indicator is that it's one of few states in which eHealthinsurance doesn't sell policies ...
How bad are Massachusetts' insurance regulations? One good indicator is that it's one of few states in which eHealthinsurance doesn't sell policies ...
The health insurance gamble
By Jennifer Gordon
Dallas Business Journal
Updated: 8:00 p.m. ET April 23, 2006
When Alvin Wirthlin started his patent-application business in Lucas a few years ago, the decision about purchasing health insurance came down to a risk vs. cost analysis.
Wirthlin, who decided to take the risk instead of pay the cost of insurance, is not alone.
A growing number of small business owners and full-time workers make up about 80% of the America's 46 million people without health insurance. The number of people without such insurance increased 11.2% from 2001 to 2004.
Though California beats Texas in absolute numbers, Texas ranks No. 1 for the highest percentage of its population lacking health insurance, with 25%, or one out of every four people, living without coverage. That translates into 5 million people without insurance in the Lone Star State, and an estimated 700,000 in Dallas County alone.
"That's not the kind of rate you want," said Joel Allison, president and CEO of Baylor Health Care System. "The uninsured is a major issue impacting health care."
Nationwide, 16% of the population is uninsured, according to an October 2005 report from the Employee Benefits Research Institute.
Like those people, Wirthlin decided to risk it and forego health insurance coverage for him, his wife and their five children. Paying $180 for two doctor's office visits a year made much more sense to him than paying $400 to $500 a month in premiums.
That logic worked until Wirthlin suffered a recent back injury. So far, he's paid $90 for an office visit and $600 for an MRI, which was about a 50% discount by the MRI provider when it learned Wirthlin was uninsured.
The bills to date have been low because of a close friend who is an orthopedic surgeon, but if surgery is needed Wirthlin is looking at a bill in the tens of thousands of dollars. Right now he's waiting to see whether he'll have the surgery, which doctors have told him he needs.
"I wish I could have known that there would have been a catastrophic event so I could plan for it," Wirthlin said. "It's just one of those risks you take. In our case the risk didn't work out, but we were lucky for four years."
Sobering statistics
Rolling the dice and foregoing insurance is something a growing number of middle-class people with incomes of $50,000 a year or greater are trying. That segment is the fastest-growing group among the nation's 46 million people without health insurance, health care officials said.
In 2003, 17% of the uninsured were families with incomes of more than $75,000. Another 16% of the uninsured had family incomes of $50,000 to $74,999, while 34% of the uninsured had incomes of less than $25,000, according to a recent Texas Hospital Association report.
Immigrants also make up a portion of the uninsured, though possibly not as much as many would think, based on anecdotal evidence from area health care providers. Individual hospitals can't ask patients whether they're in the country illegally, so it's tough to track. But a 2005 Kaiser Family Foundation report found that, between 2000 and 2003, the number of uninsured native citizens increased by 3.6 million, while the number of noncitizens increased by 1.2 million.
"All the hospitals are seeing that spill into their system," said David Cecero, president and CEO of JPS Health Network in Fort Worth.
Overall, the uninsured just don't have the ability to use the entire health care system -- meaning they can use the emergency rooms but often can't be seen by specialists, said Don Spies, director of health initiatives for District One of the Dallas County Commissioners Court and a former health care consultant. "They're hard-working people. They're salt-of-the-earth people."
The uninsured face a host of challenges including poorer health and high medical bills. Employers with uninsured workers typically have less-productive employees and more sick days, because they're distracted by undiagnosed medical conditions and don't recieve appropriate care, health care officials said.
Hidden tax
Also, employers who sponsor insurance coverage face a higher cost -- a hidden tax, if you will -- built into their premiums because of the cost of caring for the uninsured. That's because health care providers pass along the cost to insurance companies when rates are renegotiated, and that additional cost is in turn passed on to policyholders.
And those premiums haven't just been slowly creeping up in recent years, as any business owner who has received a rate quote can tell you.
Premiums increased an average of 9.2% in 2005, which is four times the increase in earnings of 2.7% and more than two times the rate of inflation, 3.5%, according to the 2005 Annual Employer Health Benefits Survey from the Kaiser Family Foundation and Health Research and Educational Trust. Premiums have increased 73% since 2000.
In addition, hospitals and other health care providers are increasingly saddled with more bad debt and uncompensated care, a trend that hospitals say can't continue indefinitely without destroying the system. Bad debt is any portion of the bill that can't be collected.
"As we've watched the evolution of the cost of health care, I think we've created for ourselves a very vicious cycle which,bottom line, in my view, will take the system down if not corrected," said Doug Hawthorne, a 36-year Texas Health Resources veteran and CEO of the Arlington-based system. "Today it is the coverage issue. And those who can pay are ultimately paying for those that can't."
For public hospitals like Parkland Memorial Hospital in Dallas, patients with traditional insurance make up such a small portion of their overall business that it's virtually impossible to charge insurers more to cover some of the cost of the uninsured patients, said Dr. Ron Anderson, president and CEO of Parkland Health & Hospital Sytem. "I have no place to shift it to, except the taxpayer."
Parkland previously saw 57% of annual hospital admissions for charity patients, but that percentage has decreased in recent years, he added.
"We now see more than we've ever seen before and increased in absolute numbers, but percentage-wise we're down to 47%, which means the work at Baylor has grown, the work at other hospitals has grown and at some point they're going to find it very, very difficult to continue to provide charity care at those levels," Anderson said.
'More critical'
Pretty much all Texas hospitals, not just the public hospitals, feel squeezed financially, said John Hawkins, vice president of government relations for the Texas Hospital Association. "It's becoming more critical now."
In 2004, Texas hospitals provided $9.2 billion worth of uncompensated care, which includes bad debt expenses, according to information from the Texas Hospital Association. That's compared with $3 billion in uncompensated care in 1993. On a national level, uncompensated care increased to $60 billion from $25 billion during the same time frame.
For 2006, JPS Health Network is approaching the $300 million mark for uncompensated care, up from $275 million in 2005 and $175 million in 2001, Cecero said.
For Methodist Health System, the cost of bad debt and charity care makes up 33% of the system's nongovernmental business, said Michael Schaefer, Methodist's executive vice president and chief financial officer. "That ought to give you a sense for how much more we have to charge people who have insurance to pay for those that don't have any insurance or have very poor insurance."
Overall, Methodist has seen a 10% increase in this type of care year-over-year since 2004, said Howard Chase, Methodist's president and CEO. "Not only is it continuing to go up in dollars, but the rate doesn't seem to be diminishing. It's already a major issue for us and if that trend continues, it becomes a bigger issue every year."
Mary Grealy, president of the Washington, D.C.-based Health Leadership Council, says everyone is paying.
"Everyone is affected by this, whether you're a provider of health care services or if you're an employer that offers health insurance to your employees," Grealy said. "We're all paying for it."
Medical City doesn't get many uninsured patients because of its location in a mostly affluent area. Last year, for-profit Medical City spent $50 million on uncompensated care, which is a double-digit increase over the past three years.
"The dot-com bubble burst had a huge and dramatic impact on us," explained Medical City CEO Britt Berrett, who said the layoffs and tougher financial situation hurt the hospital's bottom line as previously insured patients then had no coverage.
When it comes to charity cases, aside from caring for individuals who come to the emergency room, Medical City picks and chooses the patients who receive free care. Other hospitals also do this, but typically on the back end where bills are forgiven for some.
Ultimately, Berrett says he's not concerned about the uninsured who aren't offered health insurance or even those who are eligible for coverage but truly can't afford it. "I'm concerned about individuals who buy BMWs, but elect not to buy health insurance for themselves and their families," he said.
Individuals who make those choices also concern Parkland's Anderson. "In a fashion they create a free-rider system," he said.
In a way, he and others believe, hospital attitudes toward treating those who need care also contribute to the problem, ironically enough.
Says Anderson: "They know that our culture is such that we value human life so much so that we're going to take care of them. That's a problem in this country, and I think we're going to have to deal with this free-rider issue."
Unless everyone starts carrying insurance or more public funding becomes available, the system is set up for failure, Anderson said. "It's magical thinking to think we're going to be there if we have a third of the population uninsured and can't pay. No other industry could do that."
Hawthorne agreed, adding that he's concerned about the long-term viability of health care providers under the current system.
"When we add it all up and look at the economics, it's a crisis in the making and will in some way, at some point, begin to necessitate some stricter rationing of care and maybe even some levels of care, which this country certainly has not been in favor of," Hawthorne said. "It could be the straw that breaks the camel's back for delivery of health services in this country."
Dallas Business Journal
Updated: 8:00 p.m. ET April 23, 2006
When Alvin Wirthlin started his patent-application business in Lucas a few years ago, the decision about purchasing health insurance came down to a risk vs. cost analysis.
Wirthlin, who decided to take the risk instead of pay the cost of insurance, is not alone.
A growing number of small business owners and full-time workers make up about 80% of the America's 46 million people without health insurance. The number of people without such insurance increased 11.2% from 2001 to 2004.
Though California beats Texas in absolute numbers, Texas ranks No. 1 for the highest percentage of its population lacking health insurance, with 25%, or one out of every four people, living without coverage. That translates into 5 million people without insurance in the Lone Star State, and an estimated 700,000 in Dallas County alone.
"That's not the kind of rate you want," said Joel Allison, president and CEO of Baylor Health Care System. "The uninsured is a major issue impacting health care."
Nationwide, 16% of the population is uninsured, according to an October 2005 report from the Employee Benefits Research Institute.
Like those people, Wirthlin decided to risk it and forego health insurance coverage for him, his wife and their five children. Paying $180 for two doctor's office visits a year made much more sense to him than paying $400 to $500 a month in premiums.
That logic worked until Wirthlin suffered a recent back injury. So far, he's paid $90 for an office visit and $600 for an MRI, which was about a 50% discount by the MRI provider when it learned Wirthlin was uninsured.
The bills to date have been low because of a close friend who is an orthopedic surgeon, but if surgery is needed Wirthlin is looking at a bill in the tens of thousands of dollars. Right now he's waiting to see whether he'll have the surgery, which doctors have told him he needs.
"I wish I could have known that there would have been a catastrophic event so I could plan for it," Wirthlin said. "It's just one of those risks you take. In our case the risk didn't work out, but we were lucky for four years."
Sobering statistics
Rolling the dice and foregoing insurance is something a growing number of middle-class people with incomes of $50,000 a year or greater are trying. That segment is the fastest-growing group among the nation's 46 million people without health insurance, health care officials said.
In 2003, 17% of the uninsured were families with incomes of more than $75,000. Another 16% of the uninsured had family incomes of $50,000 to $74,999, while 34% of the uninsured had incomes of less than $25,000, according to a recent Texas Hospital Association report.
Immigrants also make up a portion of the uninsured, though possibly not as much as many would think, based on anecdotal evidence from area health care providers. Individual hospitals can't ask patients whether they're in the country illegally, so it's tough to track. But a 2005 Kaiser Family Foundation report found that, between 2000 and 2003, the number of uninsured native citizens increased by 3.6 million, while the number of noncitizens increased by 1.2 million.
"All the hospitals are seeing that spill into their system," said David Cecero, president and CEO of JPS Health Network in Fort Worth.
Overall, the uninsured just don't have the ability to use the entire health care system -- meaning they can use the emergency rooms but often can't be seen by specialists, said Don Spies, director of health initiatives for District One of the Dallas County Commissioners Court and a former health care consultant. "They're hard-working people. They're salt-of-the-earth people."
The uninsured face a host of challenges including poorer health and high medical bills. Employers with uninsured workers typically have less-productive employees and more sick days, because they're distracted by undiagnosed medical conditions and don't recieve appropriate care, health care officials said.
Hidden tax
Also, employers who sponsor insurance coverage face a higher cost -- a hidden tax, if you will -- built into their premiums because of the cost of caring for the uninsured. That's because health care providers pass along the cost to insurance companies when rates are renegotiated, and that additional cost is in turn passed on to policyholders.
And those premiums haven't just been slowly creeping up in recent years, as any business owner who has received a rate quote can tell you.
Premiums increased an average of 9.2% in 2005, which is four times the increase in earnings of 2.7% and more than two times the rate of inflation, 3.5%, according to the 2005 Annual Employer Health Benefits Survey from the Kaiser Family Foundation and Health Research and Educational Trust. Premiums have increased 73% since 2000.
In addition, hospitals and other health care providers are increasingly saddled with more bad debt and uncompensated care, a trend that hospitals say can't continue indefinitely without destroying the system. Bad debt is any portion of the bill that can't be collected.
"As we've watched the evolution of the cost of health care, I think we've created for ourselves a very vicious cycle which,bottom line, in my view, will take the system down if not corrected," said Doug Hawthorne, a 36-year Texas Health Resources veteran and CEO of the Arlington-based system. "Today it is the coverage issue. And those who can pay are ultimately paying for those that can't."
For public hospitals like Parkland Memorial Hospital in Dallas, patients with traditional insurance make up such a small portion of their overall business that it's virtually impossible to charge insurers more to cover some of the cost of the uninsured patients, said Dr. Ron Anderson, president and CEO of Parkland Health & Hospital Sytem. "I have no place to shift it to, except the taxpayer."
Parkland previously saw 57% of annual hospital admissions for charity patients, but that percentage has decreased in recent years, he added.
"We now see more than we've ever seen before and increased in absolute numbers, but percentage-wise we're down to 47%, which means the work at Baylor has grown, the work at other hospitals has grown and at some point they're going to find it very, very difficult to continue to provide charity care at those levels," Anderson said.
'More critical'
Pretty much all Texas hospitals, not just the public hospitals, feel squeezed financially, said John Hawkins, vice president of government relations for the Texas Hospital Association. "It's becoming more critical now."
In 2004, Texas hospitals provided $9.2 billion worth of uncompensated care, which includes bad debt expenses, according to information from the Texas Hospital Association. That's compared with $3 billion in uncompensated care in 1993. On a national level, uncompensated care increased to $60 billion from $25 billion during the same time frame.
For 2006, JPS Health Network is approaching the $300 million mark for uncompensated care, up from $275 million in 2005 and $175 million in 2001, Cecero said.
For Methodist Health System, the cost of bad debt and charity care makes up 33% of the system's nongovernmental business, said Michael Schaefer, Methodist's executive vice president and chief financial officer. "That ought to give you a sense for how much more we have to charge people who have insurance to pay for those that don't have any insurance or have very poor insurance."
Overall, Methodist has seen a 10% increase in this type of care year-over-year since 2004, said Howard Chase, Methodist's president and CEO. "Not only is it continuing to go up in dollars, but the rate doesn't seem to be diminishing. It's already a major issue for us and if that trend continues, it becomes a bigger issue every year."
Mary Grealy, president of the Washington, D.C.-based Health Leadership Council, says everyone is paying.
"Everyone is affected by this, whether you're a provider of health care services or if you're an employer that offers health insurance to your employees," Grealy said. "We're all paying for it."
Medical City doesn't get many uninsured patients because of its location in a mostly affluent area. Last year, for-profit Medical City spent $50 million on uncompensated care, which is a double-digit increase over the past three years.
"The dot-com bubble burst had a huge and dramatic impact on us," explained Medical City CEO Britt Berrett, who said the layoffs and tougher financial situation hurt the hospital's bottom line as previously insured patients then had no coverage.
When it comes to charity cases, aside from caring for individuals who come to the emergency room, Medical City picks and chooses the patients who receive free care. Other hospitals also do this, but typically on the back end where bills are forgiven for some.
Ultimately, Berrett says he's not concerned about the uninsured who aren't offered health insurance or even those who are eligible for coverage but truly can't afford it. "I'm concerned about individuals who buy BMWs, but elect not to buy health insurance for themselves and their families," he said.
Individuals who make those choices also concern Parkland's Anderson. "In a fashion they create a free-rider system," he said.
In a way, he and others believe, hospital attitudes toward treating those who need care also contribute to the problem, ironically enough.
Says Anderson: "They know that our culture is such that we value human life so much so that we're going to take care of them. That's a problem in this country, and I think we're going to have to deal with this free-rider issue."
Unless everyone starts carrying insurance or more public funding becomes available, the system is set up for failure, Anderson said. "It's magical thinking to think we're going to be there if we have a third of the population uninsured and can't pay. No other industry could do that."
Hawthorne agreed, adding that he's concerned about the long-term viability of health care providers under the current system.
"When we add it all up and look at the economics, it's a crisis in the making and will in some way, at some point, begin to necessitate some stricter rationing of care and maybe even some levels of care, which this country certainly has not been in favor of," Hawthorne said. "It could be the straw that breaks the camel's back for delivery of health services in this country."
The health insurance gamble
By Jennifer Gordon
Dallas Business Journal
Updated: 8:00 p.m. ET April 23, 2006
When Alvin Wirthlin started his patent-application business in Lucas a few years ago, the decision about purchasing health insurance came down to a risk vs. cost analysis.
Wirthlin, who decided to take the risk instead of pay the cost of insurance, is not alone.
A growing number of small business owners and full-time workers make up about 80% of the America's 46 million people without health insurance. The number of people without such insurance increased 11.2% from 2001 to 2004.
Though California beats Texas in absolute numbers, Texas ranks No. 1 for the highest percentage of its population lacking health insurance, with 25%, or one out of every four people, living without coverage. That translates into 5 million people without insurance in the Lone Star State, and an estimated 700,000 in Dallas County alone.
"That's not the kind of rate you want," said Joel Allison, president and CEO of Baylor Health Care System. "The uninsured is a major issue impacting health care."
Nationwide, 16% of the population is uninsured, according to an October 2005 report from the Employee Benefits Research Institute.
Like those people, Wirthlin decided to risk it and forego health insurance coverage for him, his wife and their five children. Paying $180 for two doctor's office visits a year made much more sense to him than paying $400 to $500 a month in premiums.
That logic worked until Wirthlin suffered a recent back injury. So far, he's paid $90 for an office visit and $600 for an MRI, which was about a 50% discount by the MRI provider when it learned Wirthlin was uninsured.
The bills to date have been low because of a close friend who is an orthopedic surgeon, but if surgery is needed Wirthlin is looking at a bill in the tens of thousands of dollars. Right now he's waiting to see whether he'll have the surgery, which doctors have told him he needs.
"I wish I could have known that there would have been a catastrophic event so I could plan for it," Wirthlin said. "It's just one of those risks you take. In our case the risk didn't work out, but we were lucky for four years."
Sobering statistics
Rolling the dice and foregoing insurance is something a growing number of middle-class people with incomes of $50,000 a year or greater are trying. That segment is the fastest-growing group among the nation's 46 million people without health insurance, health care officials said.
In 2003, 17% of the uninsured were families with incomes of more than $75,000. Another 16% of the uninsured had family incomes of $50,000 to $74,999, while 34% of the uninsured had incomes of less than $25,000, according to a recent Texas Hospital Association report.
Immigrants also make up a portion of the uninsured, though possibly not as much as many would think, based on anecdotal evidence from area health care providers. Individual hospitals can't ask patients whether they're in the country illegally, so it's tough to track. But a 2005 Kaiser Family Foundation report found that, between 2000 and 2003, the number of uninsured native citizens increased by 3.6 million, while the number of noncitizens increased by 1.2 million.
"All the hospitals are seeing that spill into their system," said David Cecero, president and CEO of JPS Health Network in Fort Worth.
Overall, the uninsured just don't have the ability to use the entire health care system -- meaning they can use the emergency rooms but often can't be seen by specialists, said Don Spies, director of health initiatives for District One of the Dallas County Commissioners Court and a former health care consultant. "They're hard-working people. They're salt-of-the-earth people."
The uninsured face a host of challenges including poorer health and high medical bills. Employers with uninsured workers typically have less-productive employees and more sick days, because they're distracted by undiagnosed medical conditions and don't recieve appropriate care, health care officials said.
Hidden tax
Also, employers who sponsor insurance coverage face a higher cost -- a hidden tax, if you will -- built into their premiums because of the cost of caring for the uninsured. That's because health care providers pass along the cost to insurance companies when rates are renegotiated, and that additional cost is in turn passed on to policyholders.
And those premiums haven't just been slowly creeping up in recent years, as any business owner who has received a rate quote can tell you.
Premiums increased an average of 9.2% in 2005, which is four times the increase in earnings of 2.7% and more than two times the rate of inflation, 3.5%, according to the 2005 Annual Employer Health Benefits Survey from the Kaiser Family Foundation and Health Research and Educational Trust. Premiums have increased 73% since 2000.
In addition, hospitals and other health care providers are increasingly saddled with more bad debt and uncompensated care, a trend that hospitals say can't continue indefinitely without destroying the system. Bad debt is any portion of the bill that can't be collected.
"As we've watched the evolution of the cost of health care, I think we've created for ourselves a very vicious cycle which,bottom line, in my view, will take the system down if not corrected," said Doug Hawthorne, a 36-year Texas Health Resources veteran and CEO of the Arlington-based system. "Today it is the coverage issue. And those who can pay are ultimately paying for those that can't."
For public hospitals like Parkland Memorial Hospital in Dallas, patients with traditional insurance make up such a small portion of their overall business that it's virtually impossible to charge insurers more to cover some of the cost of the uninsured patients, said Dr. Ron Anderson, president and CEO of Parkland Health & Hospital Sytem. "I have no place to shift it to, except the taxpayer."
Parkland previously saw 57% of annual hospital admissions for charity patients, but that percentage has decreased in recent years, he added.
"We now see more than we've ever seen before and increased in absolute numbers, but percentage-wise we're down to 47%, which means the work at Baylor has grown, the work at other hospitals has grown and at some point they're going to find it very, very difficult to continue to provide charity care at those levels," Anderson said.
'More critical'
Pretty much all Texas hospitals, not just the public hospitals, feel squeezed financially, said John Hawkins, vice president of government relations for the Texas Hospital Association. "It's becoming more critical now."
In 2004, Texas hospitals provided $9.2 billion worth of uncompensated care, which includes bad debt expenses, according to information from the Texas Hospital Association. That's compared with $3 billion in uncompensated care in 1993. On a national level, uncompensated care increased to $60 billion from $25 billion during the same time frame.
For 2006, JPS Health Network is approaching the $300 million mark for uncompensated care, up from $275 million in 2005 and $175 million in 2001, Cecero said.
For Methodist Health System, the cost of bad debt and charity care makes up 33% of the system's nongovernmental business, said Michael Schaefer, Methodist's executive vice president and chief financial officer. "That ought to give you a sense for how much more we have to charge people who have insurance to pay for those that don't have any insurance or have very poor insurance."
Overall, Methodist has seen a 10% increase in this type of care year-over-year since 2004, said Howard Chase, Methodist's president and CEO. "Not only is it continuing to go up in dollars, but the rate doesn't seem to be diminishing. It's already a major issue for us and if that trend continues, it becomes a bigger issue every year."
Mary Grealy, president of the Washington, D.C.-based Health Leadership Council, says everyone is paying.
"Everyone is affected by this, whether you're a provider of health care services or if you're an employer that offers health insurance to your employees," Grealy said. "We're all paying for it."
Medical City doesn't get many uninsured patients because of its location in a mostly affluent area. Last year, for-profit Medical City spent $50 million on uncompensated care, which is a double-digit increase over the past three years.
"The dot-com bubble burst had a huge and dramatic impact on us," explained Medical City CEO Britt Berrett, who said the layoffs and tougher financial situation hurt the hospital's bottom line as previously insured patients then had no coverage.
When it comes to charity cases, aside from caring for individuals who come to the emergency room, Medical City picks and chooses the patients who receive free care. Other hospitals also do this, but typically on the back end where bills are forgiven for some.
Ultimately, Berrett says he's not concerned about the uninsured who aren't offered health insurance or even those who are eligible for coverage but truly can't afford it. "I'm concerned about individuals who buy BMWs, but elect not to buy health insurance for themselves and their families," he said.
Individuals who make those choices also concern Parkland's Anderson. "In a fashion they create a free-rider system," he said.
In a way, he and others believe, hospital attitudes toward treating those who need care also contribute to the problem, ironically enough.
Says Anderson: "They know that our culture is such that we value human life so much so that we're going to take care of them. That's a problem in this country, and I think we're going to have to deal with this free-rider issue."
Unless everyone starts carrying insurance or more public funding becomes available, the system is set up for failure, Anderson said. "It's magical thinking to think we're going to be there if we have a third of the population uninsured and can't pay. No other industry could do that."
Hawthorne agreed, adding that he's concerned about the long-term viability of health care providers under the current system.
"When we add it all up and look at the economics, it's a crisis in the making and will in some way, at some point, begin to necessitate some stricter rationing of care and maybe even some levels of care, which this country certainly has not been in favor of," Hawthorne said. "It could be the straw that breaks the camel's back for delivery of health services in this country."
Dallas Business Journal
Updated: 8:00 p.m. ET April 23, 2006
When Alvin Wirthlin started his patent-application business in Lucas a few years ago, the decision about purchasing health insurance came down to a risk vs. cost analysis.
Wirthlin, who decided to take the risk instead of pay the cost of insurance, is not alone.
A growing number of small business owners and full-time workers make up about 80% of the America's 46 million people without health insurance. The number of people without such insurance increased 11.2% from 2001 to 2004.
Though California beats Texas in absolute numbers, Texas ranks No. 1 for the highest percentage of its population lacking health insurance, with 25%, or one out of every four people, living without coverage. That translates into 5 million people without insurance in the Lone Star State, and an estimated 700,000 in Dallas County alone.
"That's not the kind of rate you want," said Joel Allison, president and CEO of Baylor Health Care System. "The uninsured is a major issue impacting health care."
Nationwide, 16% of the population is uninsured, according to an October 2005 report from the Employee Benefits Research Institute.
Like those people, Wirthlin decided to risk it and forego health insurance coverage for him, his wife and their five children. Paying $180 for two doctor's office visits a year made much more sense to him than paying $400 to $500 a month in premiums.
That logic worked until Wirthlin suffered a recent back injury. So far, he's paid $90 for an office visit and $600 for an MRI, which was about a 50% discount by the MRI provider when it learned Wirthlin was uninsured.
The bills to date have been low because of a close friend who is an orthopedic surgeon, but if surgery is needed Wirthlin is looking at a bill in the tens of thousands of dollars. Right now he's waiting to see whether he'll have the surgery, which doctors have told him he needs.
"I wish I could have known that there would have been a catastrophic event so I could plan for it," Wirthlin said. "It's just one of those risks you take. In our case the risk didn't work out, but we were lucky for four years."
Sobering statistics
Rolling the dice and foregoing insurance is something a growing number of middle-class people with incomes of $50,000 a year or greater are trying. That segment is the fastest-growing group among the nation's 46 million people without health insurance, health care officials said.
In 2003, 17% of the uninsured were families with incomes of more than $75,000. Another 16% of the uninsured had family incomes of $50,000 to $74,999, while 34% of the uninsured had incomes of less than $25,000, according to a recent Texas Hospital Association report.
Immigrants also make up a portion of the uninsured, though possibly not as much as many would think, based on anecdotal evidence from area health care providers. Individual hospitals can't ask patients whether they're in the country illegally, so it's tough to track. But a 2005 Kaiser Family Foundation report found that, between 2000 and 2003, the number of uninsured native citizens increased by 3.6 million, while the number of noncitizens increased by 1.2 million.
"All the hospitals are seeing that spill into their system," said David Cecero, president and CEO of JPS Health Network in Fort Worth.
Overall, the uninsured just don't have the ability to use the entire health care system -- meaning they can use the emergency rooms but often can't be seen by specialists, said Don Spies, director of health initiatives for District One of the Dallas County Commissioners Court and a former health care consultant. "They're hard-working people. They're salt-of-the-earth people."
The uninsured face a host of challenges including poorer health and high medical bills. Employers with uninsured workers typically have less-productive employees and more sick days, because they're distracted by undiagnosed medical conditions and don't recieve appropriate care, health care officials said.
Hidden tax
Also, employers who sponsor insurance coverage face a higher cost -- a hidden tax, if you will -- built into their premiums because of the cost of caring for the uninsured. That's because health care providers pass along the cost to insurance companies when rates are renegotiated, and that additional cost is in turn passed on to policyholders.
And those premiums haven't just been slowly creeping up in recent years, as any business owner who has received a rate quote can tell you.
Premiums increased an average of 9.2% in 2005, which is four times the increase in earnings of 2.7% and more than two times the rate of inflation, 3.5%, according to the 2005 Annual Employer Health Benefits Survey from the Kaiser Family Foundation and Health Research and Educational Trust. Premiums have increased 73% since 2000.
In addition, hospitals and other health care providers are increasingly saddled with more bad debt and uncompensated care, a trend that hospitals say can't continue indefinitely without destroying the system. Bad debt is any portion of the bill that can't be collected.
"As we've watched the evolution of the cost of health care, I think we've created for ourselves a very vicious cycle which,bottom line, in my view, will take the system down if not corrected," said Doug Hawthorne, a 36-year Texas Health Resources veteran and CEO of the Arlington-based system. "Today it is the coverage issue. And those who can pay are ultimately paying for those that can't."
For public hospitals like Parkland Memorial Hospital in Dallas, patients with traditional insurance make up such a small portion of their overall business that it's virtually impossible to charge insurers more to cover some of the cost of the uninsured patients, said Dr. Ron Anderson, president and CEO of Parkland Health & Hospital Sytem. "I have no place to shift it to, except the taxpayer."
Parkland previously saw 57% of annual hospital admissions for charity patients, but that percentage has decreased in recent years, he added.
"We now see more than we've ever seen before and increased in absolute numbers, but percentage-wise we're down to 47%, which means the work at Baylor has grown, the work at other hospitals has grown and at some point they're going to find it very, very difficult to continue to provide charity care at those levels," Anderson said.
'More critical'
Pretty much all Texas hospitals, not just the public hospitals, feel squeezed financially, said John Hawkins, vice president of government relations for the Texas Hospital Association. "It's becoming more critical now."
In 2004, Texas hospitals provided $9.2 billion worth of uncompensated care, which includes bad debt expenses, according to information from the Texas Hospital Association. That's compared with $3 billion in uncompensated care in 1993. On a national level, uncompensated care increased to $60 billion from $25 billion during the same time frame.
For 2006, JPS Health Network is approaching the $300 million mark for uncompensated care, up from $275 million in 2005 and $175 million in 2001, Cecero said.
For Methodist Health System, the cost of bad debt and charity care makes up 33% of the system's nongovernmental business, said Michael Schaefer, Methodist's executive vice president and chief financial officer. "That ought to give you a sense for how much more we have to charge people who have insurance to pay for those that don't have any insurance or have very poor insurance."
Overall, Methodist has seen a 10% increase in this type of care year-over-year since 2004, said Howard Chase, Methodist's president and CEO. "Not only is it continuing to go up in dollars, but the rate doesn't seem to be diminishing. It's already a major issue for us and if that trend continues, it becomes a bigger issue every year."
Mary Grealy, president of the Washington, D.C.-based Health Leadership Council, says everyone is paying.
"Everyone is affected by this, whether you're a provider of health care services or if you're an employer that offers health insurance to your employees," Grealy said. "We're all paying for it."
Medical City doesn't get many uninsured patients because of its location in a mostly affluent area. Last year, for-profit Medical City spent $50 million on uncompensated care, which is a double-digit increase over the past three years.
"The dot-com bubble burst had a huge and dramatic impact on us," explained Medical City CEO Britt Berrett, who said the layoffs and tougher financial situation hurt the hospital's bottom line as previously insured patients then had no coverage.
When it comes to charity cases, aside from caring for individuals who come to the emergency room, Medical City picks and chooses the patients who receive free care. Other hospitals also do this, but typically on the back end where bills are forgiven for some.
Ultimately, Berrett says he's not concerned about the uninsured who aren't offered health insurance or even those who are eligible for coverage but truly can't afford it. "I'm concerned about individuals who buy BMWs, but elect not to buy health insurance for themselves and their families," he said.
Individuals who make those choices also concern Parkland's Anderson. "In a fashion they create a free-rider system," he said.
In a way, he and others believe, hospital attitudes toward treating those who need care also contribute to the problem, ironically enough.
Says Anderson: "They know that our culture is such that we value human life so much so that we're going to take care of them. That's a problem in this country, and I think we're going to have to deal with this free-rider issue."
Unless everyone starts carrying insurance or more public funding becomes available, the system is set up for failure, Anderson said. "It's magical thinking to think we're going to be there if we have a third of the population uninsured and can't pay. No other industry could do that."
Hawthorne agreed, adding that he's concerned about the long-term viability of health care providers under the current system.
"When we add it all up and look at the economics, it's a crisis in the making and will in some way, at some point, begin to necessitate some stricter rationing of care and maybe even some levels of care, which this country certainly has not been in favor of," Hawthorne said. "It could be the straw that breaks the camel's back for delivery of health services in this country."
Friday, April 21, 2006
States move to guarantee kids health insurance
By Michelle Diament
Gannett News Service
WASHINGTON — When Bianca Sanchez moved from the reception desk to handling insurance claims at a Chicago health-care center three years ago, it seemed like a good thing all around.
But her salary increase — from $15,000 to $35,000 annually — also had a downside: It disqualified Sanchez's 8-year-old daughter, Soledad, from receiving state-sponsored health coverage.
Sanchez could add Soledad to her employer's health plan, but that would cost $400 a month in premiums plus $480 for her daughter's asthma prescriptions, which the plan doesn't cover. Sanchez couldn't afford that option, so Soledad has been uninsured for three years. Every time she gets the sniffles, Sanchez worries. She's still paying off an emergency room visit from an asthma attack in September.
But starting in July, Sanchez won't have to worry about the cost of a doctor if Soledad gets a cold or skins her knee.
Illinois is poised to become the first state to guarantee access to affordable health care coverage for all children. Sanchez already has enrolled Soledad in the program, which will cost $40 a month.
"It's really going to change things a lot," Sanchez said, fighting back tears. Currently, she has trouble paying her bills due to the cost of her daughter's medication. "If I don't have to worry about her going out and playing, I'll finally be able to sleep easily."
Kids in other states soon may have access to similar coverage. From Tennessee to Hawaii, state leaders are touting plans that would make routine visits to the dentist or pediatrician a reality for all children, regardless of their family income.
Driving the trend is a push by state governments to do something about the 46 million people across the country who lack health insurance. While most states don't have the money to insure everyone at once, covering children is a logical first step.
"There's a political consensus that children deserve to have health care," said Genevieve Kenney, a health economist at the Urban Institute. Kids also are cheaper to cover than adults and society has an interest in caring for them.
Illinois is the only state to enact legislation so far to cover all children. And New Mexico is not far behind; that state will cover all kids under age 6 starting in July. Meanwhile, officials in at least eight other states are talking about programs to guarantee affordable coverage to kids.
Critics say such plans are unrealistic. For one, states must maintain balanced budgets and can't always live up to hefty commitments in lean times.
"I would be concerned that (with) the kind of track record Medicaid has had in growth ... how long will this be a viable option for Illinois?" said Laura Trueman, executive director of the Coalition for Affordable Health Coverage in Washington.
The Illinois program, called All Kids, will offer medical, dental, vision and prescription coverage to anyone 18 or younger. Parents will pay a premium based on a sliding scale pegged to their income.
States have traditionally offered medical coverage to low-income residents through Medicaid. And since 1997, the State Children's Health Insurance Program has covered people who don't qualify for Medicaid but can't afford private insurance. Many families, however, earn too much to qualify for that program but too little to afford private coverage.
The new state initiatives would make everyone eligible for coverage, regardless of income level.
That's essential, said Illinois' Gov. Rod Blagojevich, noting that uninsured kids aren't the children of the wealthy or even the poor but "are the children of working families."
Research shows such children are less likely than their insured peers to see a doctor when they're sick and are more likely to be hospitalized for avoidable conditions. Parents of uninsured children also are more likely to keep their kids from playing sports to avoid injuries that might generate unaffordable medical bills.
Ruth Snyder, a widow in Rockford, Ill., said she declined to call an ambulance recently when her autistic son, Cody, fell off a horse.
"If I knew we could get it covered, I would have taken him to the doctor right away," said Snyder, who lives on about $40,000 a year in disability payments and Social Security. "It's hard when you know they need treatment sometimes and you can't take them because you can't afford it."
Gannett News Service
WASHINGTON — When Bianca Sanchez moved from the reception desk to handling insurance claims at a Chicago health-care center three years ago, it seemed like a good thing all around.
But her salary increase — from $15,000 to $35,000 annually — also had a downside: It disqualified Sanchez's 8-year-old daughter, Soledad, from receiving state-sponsored health coverage.
Sanchez could add Soledad to her employer's health plan, but that would cost $400 a month in premiums plus $480 for her daughter's asthma prescriptions, which the plan doesn't cover. Sanchez couldn't afford that option, so Soledad has been uninsured for three years. Every time she gets the sniffles, Sanchez worries. She's still paying off an emergency room visit from an asthma attack in September.
But starting in July, Sanchez won't have to worry about the cost of a doctor if Soledad gets a cold or skins her knee.
Illinois is poised to become the first state to guarantee access to affordable health care coverage for all children. Sanchez already has enrolled Soledad in the program, which will cost $40 a month.
"It's really going to change things a lot," Sanchez said, fighting back tears. Currently, she has trouble paying her bills due to the cost of her daughter's medication. "If I don't have to worry about her going out and playing, I'll finally be able to sleep easily."
Kids in other states soon may have access to similar coverage. From Tennessee to Hawaii, state leaders are touting plans that would make routine visits to the dentist or pediatrician a reality for all children, regardless of their family income.
Driving the trend is a push by state governments to do something about the 46 million people across the country who lack health insurance. While most states don't have the money to insure everyone at once, covering children is a logical first step.
"There's a political consensus that children deserve to have health care," said Genevieve Kenney, a health economist at the Urban Institute. Kids also are cheaper to cover than adults and society has an interest in caring for them.
Illinois is the only state to enact legislation so far to cover all children. And New Mexico is not far behind; that state will cover all kids under age 6 starting in July. Meanwhile, officials in at least eight other states are talking about programs to guarantee affordable coverage to kids.
Critics say such plans are unrealistic. For one, states must maintain balanced budgets and can't always live up to hefty commitments in lean times.
"I would be concerned that (with) the kind of track record Medicaid has had in growth ... how long will this be a viable option for Illinois?" said Laura Trueman, executive director of the Coalition for Affordable Health Coverage in Washington.
The Illinois program, called All Kids, will offer medical, dental, vision and prescription coverage to anyone 18 or younger. Parents will pay a premium based on a sliding scale pegged to their income.
States have traditionally offered medical coverage to low-income residents through Medicaid. And since 1997, the State Children's Health Insurance Program has covered people who don't qualify for Medicaid but can't afford private insurance. Many families, however, earn too much to qualify for that program but too little to afford private coverage.
The new state initiatives would make everyone eligible for coverage, regardless of income level.
That's essential, said Illinois' Gov. Rod Blagojevich, noting that uninsured kids aren't the children of the wealthy or even the poor but "are the children of working families."
Research shows such children are less likely than their insured peers to see a doctor when they're sick and are more likely to be hospitalized for avoidable conditions. Parents of uninsured children also are more likely to keep their kids from playing sports to avoid injuries that might generate unaffordable medical bills.
Ruth Snyder, a widow in Rockford, Ill., said she declined to call an ambulance recently when her autistic son, Cody, fell off a horse.
"If I knew we could get it covered, I would have taken him to the doctor right away," said Snyder, who lives on about $40,000 a year in disability payments and Social Security. "It's hard when you know they need treatment sometimes and you can't take them because you can't afford it."
Auto Insurance Rankings Include Little-Known Firms
OMAHA, Neb. -- Are you getting the best value from your auto insurance? J.D. Power and Associates ranks insurance companies based on overall satisfaction, and this year, the winner for the sixth in a row is Amica Mutual.
Amica is not widely advertised, but it is available to Nebraska and Iowa drivers.
Drivers told ConsumerWatch that price is their prime consideration when they are shopping for car insurance. Yet, only two of the 23 companies in the latest J.D. Power and Associates satisfaction rankings received the highest possible score for price. Amica Mutual and Mercury are top in overall satisfaction.
Omaha driver Zack Jones was surprised.
"Usually, I figure if it's a bigger name -- State Farm, Farmers -- you're going to be safe. I don't know if that's true or not," Jones said.
The bigger names are closer to the average on price, according to the study. Allstate, Progressive and State Farm scored about average on price. Geico scored better than most on price, and Farmers scored below average on price.
For overall satisfaction, Geico and State Farm scored better than most. Allstate and Farmers were about average, and Progressive scored below average.
Amica Mutual scored among the best in every category: policy offerings, pricing, contacting the insurer and claims handling.
The lowest rated companies in the survey were AIG, Encompass and St. Paul Travelers.
Some vehicles are cheaper to insure than others. Insure.com lists those: Most Expensive Least Expensive
Amica is not widely advertised, but it is available to Nebraska and Iowa drivers.
Drivers told ConsumerWatch that price is their prime consideration when they are shopping for car insurance. Yet, only two of the 23 companies in the latest J.D. Power and Associates satisfaction rankings received the highest possible score for price. Amica Mutual and Mercury are top in overall satisfaction.
Omaha driver Zack Jones was surprised.
"Usually, I figure if it's a bigger name -- State Farm, Farmers -- you're going to be safe. I don't know if that's true or not," Jones said.
The bigger names are closer to the average on price, according to the study. Allstate, Progressive and State Farm scored about average on price. Geico scored better than most on price, and Farmers scored below average on price.
For overall satisfaction, Geico and State Farm scored better than most. Allstate and Farmers were about average, and Progressive scored below average.
Amica Mutual scored among the best in every category: policy offerings, pricing, contacting the insurer and claims handling.
The lowest rated companies in the survey were AIG, Encompass and St. Paul Travelers.
Some vehicles are cheaper to insure than others. Insure.com lists those: Most Expensive Least Expensive
Wednesday, April 19, 2006
New Jersey exploring health insurance
BY BETH FITZGERALD
Star-Ledger Staff
New Jersey officials say they will explore ways to follow the lead of Massachusetts, which last week adopted the nation's first universal health insurance law.
Assemblyman Neil Cohen (D- Union) said yesterday he and Sen. Joseph Vitale (D-Middlesex) will spend the next six months meeting with employers, consumer groups, health insurance firms, hospitals, physicians, drug firms and other stakeholders to determine whether some version of the Massachusetts plan could work in New Jersey.
The law, signed last week by Gov. Mitt Romney, requires people who don't have health insurance to buy it by July 1, 2007. Employers with 11 or more employees would pay $295 a year, per employee, if the company doesn't provide insurance.
But Massachusetts has fewer than 600,000 uninsured -- well below Cohen's estimate of 1.3 million for New Jersey's -- and it's be lieved that Massachusetts has funds in place to cover the cost of the new mandate for at least the next two years.
"The toughest piece in the Mas sachusetts law is that it requires everyone to have health insurance, the same way we now require everyone with a car to have auto insurance," Cohen said. "This is going to take a lot of research and a lot of work.
"We know there are people who can't afford insurance right now, under any circumstances; there are undocumented immigrants whose names and addresses we don't even have. What is the cost, and how will the cost be borne?"
Cohen said New Jersey might consider exempting employers with 15, or 30 or even 50 workers, or perhaps use a gross revenue threshold instead.
Government subsidies would be needed to buy insurance for many of those who can't afford it now, but Cohen said taxpayers spend about $600 million a year to compensate hospitals for treating uninsured patients. "Some of those funds could be used to provide a coverage plan for the uninsured," he said.
The prospect of New Jersey tak ing a cue from Massachusetts drew a generally favorable response from several statewide business groups.
"It's a fantastic idea -- it makes sure that everyone has some responsibility in the health insurance game, and that is long overdue," said Jim Leonard, vice president for government relations at the state Chamber of Commerce. "Forcing people to take a responsible role in purchasing insurance will lead to reform, whether it's cost reform or system changes that make the system work better."
He cited a study a few years ago that found 356,000 of the uninsured had income of $50,000 or more; 200,000 were between jobs and temporarily uninsured, and 265,000 were eligible for government health plans and weren't taking advan tage of them. A key goal is getting everyone covered, "because then everyone has skin in the game, and everyone will be forced to pay attention to health insurance -- to the cost and to what is driving costs."
Phil Kirschner, president of the New Jersey Business & Industry Association, said the Massachu setts plan holds promise, though it doesn't attack the cost of health care.
"It's easy to say we're going to cover people, but what we have seen so far in the legislative response is an avoidance of the cost issue," he said.
Vitale, who chairs the state Senate health committee, said, "The goal is some form of universal health-insurance product where business, employee and government share in a partnership."
He said the state-and federally funded FamilyCare program that provides health coverage to 139,000 working poor parents and 112,000 children could be a model for how universal insurance would work.
Star-Ledger Staff
New Jersey officials say they will explore ways to follow the lead of Massachusetts, which last week adopted the nation's first universal health insurance law.
Assemblyman Neil Cohen (D- Union) said yesterday he and Sen. Joseph Vitale (D-Middlesex) will spend the next six months meeting with employers, consumer groups, health insurance firms, hospitals, physicians, drug firms and other stakeholders to determine whether some version of the Massachusetts plan could work in New Jersey.
The law, signed last week by Gov. Mitt Romney, requires people who don't have health insurance to buy it by July 1, 2007. Employers with 11 or more employees would pay $295 a year, per employee, if the company doesn't provide insurance.
But Massachusetts has fewer than 600,000 uninsured -- well below Cohen's estimate of 1.3 million for New Jersey's -- and it's be lieved that Massachusetts has funds in place to cover the cost of the new mandate for at least the next two years.
"The toughest piece in the Mas sachusetts law is that it requires everyone to have health insurance, the same way we now require everyone with a car to have auto insurance," Cohen said. "This is going to take a lot of research and a lot of work.
"We know there are people who can't afford insurance right now, under any circumstances; there are undocumented immigrants whose names and addresses we don't even have. What is the cost, and how will the cost be borne?"
Cohen said New Jersey might consider exempting employers with 15, or 30 or even 50 workers, or perhaps use a gross revenue threshold instead.
Government subsidies would be needed to buy insurance for many of those who can't afford it now, but Cohen said taxpayers spend about $600 million a year to compensate hospitals for treating uninsured patients. "Some of those funds could be used to provide a coverage plan for the uninsured," he said.
The prospect of New Jersey tak ing a cue from Massachusetts drew a generally favorable response from several statewide business groups.
"It's a fantastic idea -- it makes sure that everyone has some responsibility in the health insurance game, and that is long overdue," said Jim Leonard, vice president for government relations at the state Chamber of Commerce. "Forcing people to take a responsible role in purchasing insurance will lead to reform, whether it's cost reform or system changes that make the system work better."
He cited a study a few years ago that found 356,000 of the uninsured had income of $50,000 or more; 200,000 were between jobs and temporarily uninsured, and 265,000 were eligible for government health plans and weren't taking advan tage of them. A key goal is getting everyone covered, "because then everyone has skin in the game, and everyone will be forced to pay attention to health insurance -- to the cost and to what is driving costs."
Phil Kirschner, president of the New Jersey Business & Industry Association, said the Massachu setts plan holds promise, though it doesn't attack the cost of health care.
"It's easy to say we're going to cover people, but what we have seen so far in the legislative response is an avoidance of the cost issue," he said.
Vitale, who chairs the state Senate health committee, said, "The goal is some form of universal health-insurance product where business, employee and government share in a partnership."
He said the state-and federally funded FamilyCare program that provides health coverage to 139,000 working poor parents and 112,000 children could be a model for how universal insurance would work.
Some Save On Car Insurance By Driving Less
(WCCO) Changing how much we drive won't just save us gas money, it can also help people save money on their car insurance.
Jeff Etzkin is already cashing in. It's rare for Etzkin to get behind the wheel these days. He said his breaking point was when gas prices jumped above $2.65 a gallon.
"The price of gas got so high, I started to look for alternatives," Etzkin said.
He has been saving more than gas money. He's also spending less on car insurance.
"I'm saving about 15 percent off of my premium for the year by not driving to work," he said.
Etzin isn't alone. More people are changing their driving habits.
"When gas prices go up, consumers drive differently," said Bob Hunter of the Consumer Federation of America. "Sometimes they don't drive to work anymore; they use mass transit or they carpool, or they just drive less."
In Minnesota and many other states ... if you stop driving to work or school, you may be classified as a "pleasure driver" and qualify for a lower rate.
You may also get a reduction if you still drive to work, but not as far or if you reduce miles in other ways, such as walking to the store instead of driving.
"The typical car in America is about $900 for insurance for one car. So, if you have a single car and you save 10 percent, that's $90, so it's worth a phone call," Hunter said.
It's also worth a call if you're thinking about buying a hybrid car. Travelers Insurance just rolled out a discount that applies in Minnesota, Wisconsin and about 25 other states.
"It is a 10 percent discount, and it applies to the majority of coverages," one expert said.
In some cities ... driving a hybrid will buy you free parking and access to car pool lanes ... even if you're alone.
"You need to have a clean air sticker on your vehicle. It just saves hours off your commute time over the course of a week," a representative of the car buying Web site edmunds.com said.
Studies show carpooling won't always save you time ... but money is a different story. Minnesota provides a tax credit on carpool and transit passes.
Transportation experts said plans like these will likely increase this summer along with the price of gas, so it's a good idea to keep checking with your company or state program.
"You should call your insurance company and tell them, 'I've changed my driving behavior — I've stopped driving to work' or, 'I'm using my car less,' and explain it to them and that you'd like to know if you qualify for a lower rate," Hunter said.
It's a lifestyle change that's paying off for Jeff.
"It puts money in my pocket. I feel good about what I'm doing," Etzkin said.
Jeff Etzkin is already cashing in. It's rare for Etzkin to get behind the wheel these days. He said his breaking point was when gas prices jumped above $2.65 a gallon.
"The price of gas got so high, I started to look for alternatives," Etzkin said.
He has been saving more than gas money. He's also spending less on car insurance.
"I'm saving about 15 percent off of my premium for the year by not driving to work," he said.
Etzin isn't alone. More people are changing their driving habits.
"When gas prices go up, consumers drive differently," said Bob Hunter of the Consumer Federation of America. "Sometimes they don't drive to work anymore; they use mass transit or they carpool, or they just drive less."
In Minnesota and many other states ... if you stop driving to work or school, you may be classified as a "pleasure driver" and qualify for a lower rate.
You may also get a reduction if you still drive to work, but not as far or if you reduce miles in other ways, such as walking to the store instead of driving.
"The typical car in America is about $900 for insurance for one car. So, if you have a single car and you save 10 percent, that's $90, so it's worth a phone call," Hunter said.
It's also worth a call if you're thinking about buying a hybrid car. Travelers Insurance just rolled out a discount that applies in Minnesota, Wisconsin and about 25 other states.
"It is a 10 percent discount, and it applies to the majority of coverages," one expert said.
In some cities ... driving a hybrid will buy you free parking and access to car pool lanes ... even if you're alone.
"You need to have a clean air sticker on your vehicle. It just saves hours off your commute time over the course of a week," a representative of the car buying Web site edmunds.com said.
Studies show carpooling won't always save you time ... but money is a different story. Minnesota provides a tax credit on carpool and transit passes.
Transportation experts said plans like these will likely increase this summer along with the price of gas, so it's a good idea to keep checking with your company or state program.
"You should call your insurance company and tell them, 'I've changed my driving behavior — I've stopped driving to work' or, 'I'm using my car less,' and explain it to them and that you'd like to know if you qualify for a lower rate," Hunter said.
It's a lifestyle change that's paying off for Jeff.
"It puts money in my pocket. I feel good about what I'm doing," Etzkin said.
Tuesday, April 18, 2006
Health Insurance boosted by Wal Mart
By KEVIN FREKING
THE ASSOCIATED PRESS
WASHINGTON - Wal-Mart Stores Inc. said Monday it will relax eligibility requirements for part-time employees who want health insurance, allowing an additional 150,000 workers to gain insurance coverage if they choose. The retailer also is decreasing co-pays on generic medications from $10 to $3 and expanding health benefits to children of part-time associates.
Until now, part-time employees have had to work for Wal-Mart for two years to qualify for employer-sponsored insurance. Beginning next month, they will have to work at the company for one. The coverage also will extend to their children.
The changes were announced by one of the company’s vice presidents, Susan Chambers., at a meeting of business and health care executives.
Wal-Mart has been strongly criticized by unions and others for a health plan they say is lacking. However, Chambers said Wal-Mart’s health insurance costs have risen at a rate of 19 percent annually over the past three years. She also noted few companies extend health coverage to part-time workers.
‘‘Keep in mind that covering part-time employees is not the norm in retail,’’ Chambers said. ‘‘But every American deserves health care, and we want to lead by taking these steps. We hope that others in the retail community will work with us to do the same.’’
Chambers did not provide details about how much the change would cost the company. She said it’s now picking up about 70 percent of the costs for each employee’s health care and she expects that percentage to increase.
Chambers said the version of the health plan that the company expected most employees to sign up for would be available for $23 a month. Workers’ children would be included for $15 more, whatever the size of the family.
THE ASSOCIATED PRESS
WASHINGTON - Wal-Mart Stores Inc. said Monday it will relax eligibility requirements for part-time employees who want health insurance, allowing an additional 150,000 workers to gain insurance coverage if they choose. The retailer also is decreasing co-pays on generic medications from $10 to $3 and expanding health benefits to children of part-time associates.
Until now, part-time employees have had to work for Wal-Mart for two years to qualify for employer-sponsored insurance. Beginning next month, they will have to work at the company for one. The coverage also will extend to their children.
The changes were announced by one of the company’s vice presidents, Susan Chambers., at a meeting of business and health care executives.
Wal-Mart has been strongly criticized by unions and others for a health plan they say is lacking. However, Chambers said Wal-Mart’s health insurance costs have risen at a rate of 19 percent annually over the past three years. She also noted few companies extend health coverage to part-time workers.
‘‘Keep in mind that covering part-time employees is not the norm in retail,’’ Chambers said. ‘‘But every American deserves health care, and we want to lead by taking these steps. We hope that others in the retail community will work with us to do the same.’’
Chambers did not provide details about how much the change would cost the company. She said it’s now picking up about 70 percent of the costs for each employee’s health care and she expects that percentage to increase.
Chambers said the version of the health plan that the company expected most employees to sign up for would be available for $23 a month. Workers’ children would be included for $15 more, whatever the size of the family.
Save some money on your auto insurance - 04/18/06 - The Detroit News
You can save several hundred dollars a year by purchasing auto insurance from a licensed, low-price insurer. Call Michigan's Office of Financial and Insurance Services (877-999-6442) for a publication showing typical prices charged by different companies.
Then call at least four of the lowest-priced, licensed insurers to learn what they would charge you for the same coverage.
Then call at least four of the lowest-priced, licensed insurers to learn what they would charge you for the same coverage.
Norvax Builds New Carrier Partnerships, Expands Quote Engine Selection For Individual Health Agents
Press Release
Chicago, IL (PRWEB) April 16, 2006 -- Norvax Inc., a leading developer of Web-based sales and customer communication tools for the health insurance industry, announced today an expanded selection of instant quoting options available to individual health agents.
“We are pleased to see our ongoing efforts to build relationships with preferred companies result in a stronger quote engine product, said Scott Osler, vice president, business development, Norvax. “More companies are choosing to add or expand their portfolios of products on our web-based quote engine, allowing them to reach the growing number of agents who have adopted this technology to speed up their quoting and sales. Agents benefit from the greater selection of popular products to add to their instant web proposals.”
Since January, Norvax has added one new carrier to their quote engine, launched 16 new states for existing carriers and expanded product portfolios offered by several other companies. Agents using Norvax’ quote engine can now choose from the company’s total offering of 33 carriers in 43 states.
In addition to quoting software, Norvax offers agents compatible turn-key insurance websites that allow consumers to generate their own instant quotes. Designed specifically to help insurance agents expand their market and convert web traffic into exclusive leads, Norvax’ professional websites give prospects 24-hour access to carrier applications, brochures and provider networks.
Agents can also choose to add LeadMiner autoresponder technology to automate their follow up process. Norvax’ LeadMiner incorporates the company’s web-based quoting technology into email responses sent automatically to all incoming leads. With a one-time set up, agents can easily create their own campaigns and send leads updated quotes within a series of personalized follow up emails. Agents are alerted via email when a lead views their web-proposal.
Agents interested in the instant quoting capabilities and expanded selection of Norvax’ QuoteBuilder quote engine, or Norvax’ suite of productivity-enhancing tools should call 1-866-466-7829.
Chicago, IL (PRWEB) April 16, 2006 -- Norvax Inc., a leading developer of Web-based sales and customer communication tools for the health insurance industry, announced today an expanded selection of instant quoting options available to individual health agents.
“We are pleased to see our ongoing efforts to build relationships with preferred companies result in a stronger quote engine product, said Scott Osler, vice president, business development, Norvax. “More companies are choosing to add or expand their portfolios of products on our web-based quote engine, allowing them to reach the growing number of agents who have adopted this technology to speed up their quoting and sales. Agents benefit from the greater selection of popular products to add to their instant web proposals.”
Since January, Norvax has added one new carrier to their quote engine, launched 16 new states for existing carriers and expanded product portfolios offered by several other companies. Agents using Norvax’ quote engine can now choose from the company’s total offering of 33 carriers in 43 states.
In addition to quoting software, Norvax offers agents compatible turn-key insurance websites that allow consumers to generate their own instant quotes. Designed specifically to help insurance agents expand their market and convert web traffic into exclusive leads, Norvax’ professional websites give prospects 24-hour access to carrier applications, brochures and provider networks.
Agents can also choose to add LeadMiner autoresponder technology to automate their follow up process. Norvax’ LeadMiner incorporates the company’s web-based quoting technology into email responses sent automatically to all incoming leads. With a one-time set up, agents can easily create their own campaigns and send leads updated quotes within a series of personalized follow up emails. Agents are alerted via email when a lead views their web-proposal.
Agents interested in the instant quoting capabilities and expanded selection of Norvax’ QuoteBuilder quote engine, or Norvax’ suite of productivity-enhancing tools should call 1-866-466-7829.
Monday, April 17, 2006
Bill could dilute oversight on health insurance rates
By Kristen Consillio
Pacific Business News (Honolulu)
Updated: 8:00 p.m. ET April 16, 2006
Legislation backed by Hawaii's two largest health insurers and key legislators will weaken the state's power to regulate health-plan rates, the state insurance commissioner says.
The proposed amendments to the law make it harder for the state to deny insurers' rate proposals and would likely result in higher premiums for businesses, said state Insurance Commissioner J.P. Schmidt.
"The amendments make rate regulation ineffective -- it makes it harder to rein in excessive prices," he said. "And with no competitive market, health insurance premiums may continue to rise for businesses and individuals."
The law that took effect in January 2003 gave the commissioner broad power to deny proposed rate hikes that he considers either excessive, discriminatory or detrimental to businesses and consumers. Rates must be approved or denied within 90 days.
The amended bill is laden with complicated language, opening it to differing interpretations. It is now in the Senate, where lawmakers must decide whether to pass the amendments or do nothing with the bill. The law that gives the commissioner power to regulate health insurance rates expires June 30 and unless it is reauthorized, the state will no longer have the authority to review rates.
"The average person cannot understand what the legislation is doing," said Paul Tom, president of Benefit Plan Consultants, who opposes changes to the law. "It takes a technician to understand."
Kaiser Permanente Hawaii lobbyist Chris Pablo acknowledged that he drafted the amendments to the bill and circulated them among other health plans, like the Hawaii Medical Service Association, to enlist their support.
"My first priority is I would prefer if the whole rate-regulation process would end," Pablo said.
"But if the Legislature's intention is to continue rate regulation, then we cannot accept the process as it's written in the law now. We will continue to provide the depth of information that we do under the current law to enable the commissioner to do his job."
The amendments would make the following changes to the law, according to Schmidt:
Eliminate rate filings and supporting information from being open to the public.
Shorten the waiting period for rate approvals from 90 to 30 days, with an option to extend for another 30 days.
Require that the commissioner specify the actuarial, statutory and regulatory information that lead to a rate disapproval.
Require that the commissioner set an interim rate if a proposed rate is rejected.
Other changes exempt vision and dental rates from review and allow the commissioner to review only the method used to determine a rate and not the rate itself, Schmidt said.
"From my perspective I'm concerned about both ends of it -- on one side that rates aren't too high ... the other end that the big boys like HMSA and Kaiser not cut their rates too low to drive some of their competitors out of business," he said.
Rep. Robert Herkes, D-Puna-N. Kona, House Consumer Protection & Commerce Committee chairman, said the changes do not weaken the law.
Herkes said he worked out the bill's final draft with House Speaker Calvin Say and Rep. Dwight Takamine, D-S. Hilo-N. Kohala, chairman of the House Finance Committee.
Herkes said the amendments make the law more fair to both the insurers and the commissioner, who he said will still have the power to approve or deny rates.
"The bottom line is they are regulated," Herkes said. "I think [insurers] made more money on the previous law, and took advantage of it frankly, because they treated the [rate] cap like a floor and would go right up to it."
Pacific Business News (Honolulu)
Updated: 8:00 p.m. ET April 16, 2006
Legislation backed by Hawaii's two largest health insurers and key legislators will weaken the state's power to regulate health-plan rates, the state insurance commissioner says.
The proposed amendments to the law make it harder for the state to deny insurers' rate proposals and would likely result in higher premiums for businesses, said state Insurance Commissioner J.P. Schmidt.
"The amendments make rate regulation ineffective -- it makes it harder to rein in excessive prices," he said. "And with no competitive market, health insurance premiums may continue to rise for businesses and individuals."
The law that took effect in January 2003 gave the commissioner broad power to deny proposed rate hikes that he considers either excessive, discriminatory or detrimental to businesses and consumers. Rates must be approved or denied within 90 days.
The amended bill is laden with complicated language, opening it to differing interpretations. It is now in the Senate, where lawmakers must decide whether to pass the amendments or do nothing with the bill. The law that gives the commissioner power to regulate health insurance rates expires June 30 and unless it is reauthorized, the state will no longer have the authority to review rates.
"The average person cannot understand what the legislation is doing," said Paul Tom, president of Benefit Plan Consultants, who opposes changes to the law. "It takes a technician to understand."
Kaiser Permanente Hawaii lobbyist Chris Pablo acknowledged that he drafted the amendments to the bill and circulated them among other health plans, like the Hawaii Medical Service Association, to enlist their support.
"My first priority is I would prefer if the whole rate-regulation process would end," Pablo said.
"But if the Legislature's intention is to continue rate regulation, then we cannot accept the process as it's written in the law now. We will continue to provide the depth of information that we do under the current law to enable the commissioner to do his job."
The amendments would make the following changes to the law, according to Schmidt:
Eliminate rate filings and supporting information from being open to the public.
Shorten the waiting period for rate approvals from 90 to 30 days, with an option to extend for another 30 days.
Require that the commissioner specify the actuarial, statutory and regulatory information that lead to a rate disapproval.
Require that the commissioner set an interim rate if a proposed rate is rejected.
Other changes exempt vision and dental rates from review and allow the commissioner to review only the method used to determine a rate and not the rate itself, Schmidt said.
"From my perspective I'm concerned about both ends of it -- on one side that rates aren't too high ... the other end that the big boys like HMSA and Kaiser not cut their rates too low to drive some of their competitors out of business," he said.
Rep. Robert Herkes, D-Puna-N. Kona, House Consumer Protection & Commerce Committee chairman, said the changes do not weaken the law.
Herkes said he worked out the bill's final draft with House Speaker Calvin Say and Rep. Dwight Takamine, D-S. Hilo-N. Kohala, chairman of the House Finance Committee.
Herkes said the amendments make the law more fair to both the insurers and the commissioner, who he said will still have the power to approve or deny rates.
"The bottom line is they are regulated," Herkes said. "I think [insurers] made more money on the previous law, and took advantage of it frankly, because they treated the [rate] cap like a floor and would go right up to it."
Massachusetts auto insurance rates
By Rebecca Deusser Sentinel & Enterprise Statehouse Bureau
BOSTON -- Drivers in Lunenburg paid $86.59 more for auto insurance last year than they should have, compensating for drivers in Lowell, Lawrence and Dorchester who paid $24.86, $916.48 and $1,328.60 less than they should have, respectively, according to the Automobile Insurers Bureau of Massachusetts.
Critics of the state's auto insurance system say a statewide mandate for insurance has inadvertently pushed up the cost of premiums.
And some people on Beacon Hill say Massachusetts drivers are paying too much for car insurance.
The state ranked fourth in the country for car insurance rates, an annual average of $1,051.60, in 2003, and officials suspect rampant insurance fraud exists in several of its major cities.
Decades ago, lawmakers voted to use subsidies to make required insurance plans affordable, and for some communities, those costs have added up.
Typically a driver pays more for car insurance for living in a city, rather than a rural area.
But Peter Robertson, a spokesman for the Fairness for Good Drivers Coalition, said a suburban zip code does not ensure lower auto insurance rates; rather, it helps ease the high cost of city driving.
"The rates are not as high as they would be (for city drivers) if they were based on pure costs," Robertson said. "Because of our system, these subsidies mean people in the most rural areas pay more than they should, so city and young drivers don't have to pay as much."
Gov. Mitt Romney, who proposed a dramatic overhaul to the system last fall, said state restrictions have driven insurance companies and competition out, pushing premiums sky-high.
Others say recent changes, including an insurance rate cut of 8.7 percent, have already saved taxpayers money, and that little reform is necessary.
Massachusetts Insurance Commissioner, Julianne Bowler "set the table" for car insurance reform last year by cutting premium rates and changing the state's "step" system to a point system to rate a person's driving record, said Division of Insurance spokesman Chris Goetcheus.
The new rating system penalizes experienced drivers less for driving infractions, such as speeding tickets or minor at-fault accidents, but it also sticks young drivers with a "hefty surcharge" for similar offenses, Goetcheus said.
He said drivers should start to see savings this year.
But drivers in communities like Leominster and Fitchburg are expected to pay more for car insurance than they would under a system less dependent on subsidies.
Jim Harrington, also a spokesman for the Fairness for Good Drivers Coalition, said a top culprit for those prices is insurance fraud.
City officials in Lawrence started to crack down on fraud in 2002, after a woman died in a staged car accident to collect insurance money.
In 2002, there were 141 injuries per 100 vehicle accidents in Lawrence, but in 2004, the number dropped to 60 injuries, Harrington said.
"That was about $30 million in savings to the system," Harrington said. "If we commit the same type of resources to fight fraud like we did in Lawrence, it could dramatically take fraud out of the system."
Harrington supports Romney's proposals to change how insurance rates are set and allow companies to use "assigned risk," allowing them to factor in all sorts of criteria to determine who is a bad driver.
Some insurance companies already operating in Massachusetts, including Arbella and Commerce Insurance, oppose assigned risk, saying the state should not change its rules to accommodate large, national companies, said Doug Bailey, spokesman for the Massachusetts Coalition for Affordable Auto Insurance for All.
The governor's bill calls for competitive rating, in which companies would submit rates to the state for approval, instead of continuing to allow the state Insurance Commissioner to set the rate herself.
Harrington said those changes will make the state more friendly to national insurance companies that have stayed away to avoid home rules.
Few disagree that a key reason why insurance rates are high in Massachusetts is because it fosters a culture of bad driving.
"We have here bad weather, aggressive drivers, unfriendly attitudes, a high concentration of trial lawyers and chiropractors, congested streets and a propensity to sue," said state Sen. Andrea Nuciforo Jr., D-Pittsfield. "Given those things, we shouldn't expect to pay rates like those in Iowa."
BOSTON -- Drivers in Lunenburg paid $86.59 more for auto insurance last year than they should have, compensating for drivers in Lowell, Lawrence and Dorchester who paid $24.86, $916.48 and $1,328.60 less than they should have, respectively, according to the Automobile Insurers Bureau of Massachusetts.
Critics of the state's auto insurance system say a statewide mandate for insurance has inadvertently pushed up the cost of premiums.
And some people on Beacon Hill say Massachusetts drivers are paying too much for car insurance.
The state ranked fourth in the country for car insurance rates, an annual average of $1,051.60, in 2003, and officials suspect rampant insurance fraud exists in several of its major cities.
Decades ago, lawmakers voted to use subsidies to make required insurance plans affordable, and for some communities, those costs have added up.
Typically a driver pays more for car insurance for living in a city, rather than a rural area.
But Peter Robertson, a spokesman for the Fairness for Good Drivers Coalition, said a suburban zip code does not ensure lower auto insurance rates; rather, it helps ease the high cost of city driving.
"The rates are not as high as they would be (for city drivers) if they were based on pure costs," Robertson said. "Because of our system, these subsidies mean people in the most rural areas pay more than they should, so city and young drivers don't have to pay as much."
Gov. Mitt Romney, who proposed a dramatic overhaul to the system last fall, said state restrictions have driven insurance companies and competition out, pushing premiums sky-high.
Others say recent changes, including an insurance rate cut of 8.7 percent, have already saved taxpayers money, and that little reform is necessary.
Massachusetts Insurance Commissioner, Julianne Bowler "set the table" for car insurance reform last year by cutting premium rates and changing the state's "step" system to a point system to rate a person's driving record, said Division of Insurance spokesman Chris Goetcheus.
The new rating system penalizes experienced drivers less for driving infractions, such as speeding tickets or minor at-fault accidents, but it also sticks young drivers with a "hefty surcharge" for similar offenses, Goetcheus said.
He said drivers should start to see savings this year.
But drivers in communities like Leominster and Fitchburg are expected to pay more for car insurance than they would under a system less dependent on subsidies.
Jim Harrington, also a spokesman for the Fairness for Good Drivers Coalition, said a top culprit for those prices is insurance fraud.
City officials in Lawrence started to crack down on fraud in 2002, after a woman died in a staged car accident to collect insurance money.
In 2002, there were 141 injuries per 100 vehicle accidents in Lawrence, but in 2004, the number dropped to 60 injuries, Harrington said.
"That was about $30 million in savings to the system," Harrington said. "If we commit the same type of resources to fight fraud like we did in Lawrence, it could dramatically take fraud out of the system."
Harrington supports Romney's proposals to change how insurance rates are set and allow companies to use "assigned risk," allowing them to factor in all sorts of criteria to determine who is a bad driver.
Some insurance companies already operating in Massachusetts, including Arbella and Commerce Insurance, oppose assigned risk, saying the state should not change its rules to accommodate large, national companies, said Doug Bailey, spokesman for the Massachusetts Coalition for Affordable Auto Insurance for All.
The governor's bill calls for competitive rating, in which companies would submit rates to the state for approval, instead of continuing to allow the state Insurance Commissioner to set the rate herself.
Harrington said those changes will make the state more friendly to national insurance companies that have stayed away to avoid home rules.
Few disagree that a key reason why insurance rates are high in Massachusetts is because it fosters a culture of bad driving.
"We have here bad weather, aggressive drivers, unfriendly attitudes, a high concentration of trial lawyers and chiropractors, congested streets and a propensity to sue," said state Sen. Andrea Nuciforo Jr., D-Pittsfield. "Given those things, we shouldn't expect to pay rates like those in Iowa."
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