PROVIDENCE, R.I. Health insurance policies would be required to cover hearing aids under a bill passed by the General Assembly.
The Senate approved the bill in conference yesterday. The House of Representatives passed the legislation in May.
The bill will require all insurance plans and contracts in the state to provide 400 dollar coverage per individual every 3 years for hearing aids. It would take effect starting January 1, 2006.
The bill was sponsored in the House by Representative Robert Jacquard, a Cranston Democrat.
Friday, July 1, 2005
Terror Insurance Program Criticized
By Albert B. Crenshaw
Washington Post Staff Writer
Friday, July 1, 2005; Page D03
The Bush administration said yesterday it opposed extension of the government's terrorism insurance program "in its current form," but indicated it could accept a more restricted, clearly temporary measure that would encourage development of private coverage.
The administration's position was outlined in a letter from Treasury Secretary John W. Snow to House Financial Services Committee Chairman Michael G. Oxley (R-Ohio) accompanying a report on the performance of the existing program. It came as something of a relief to the insurance industry.
The current program, known as TRIA after the Terrorism Risk Insurance Act of 2002, provides a federal backup for commercial insurance such as business property damage and workers' compensation. It has drawn criticism as corporate welfare -- the government coverage is free to participating insurers beyond a deductible -- and insurers and real estate developers worried that the administration might oppose its extension in any form. Some interest groups that support the program said they regarded Snow's letter as an acknowledgment by the administration that there was a role for the federal government in insuring against terrorist damage.
"While the Treasury Department clearly . . . does not want TRIA extended, it does leave open some kind of federal backstop," said Leigh Ann Pusey of the American Insurance Association.
Some consumer advocates who oppose the program were heartened by the study's findings.
It "agrees with what we've been saying -- [TRIA] is too generous to a very rich insurance industry," said J. Robert Hunter of the Consumer Federation of America.
But other business groups argued that if insurance dried up, there would be economic damage.
"This risk is so unique it has been very difficult for the insurance industry" to gauge, said Martin L. DePoy of the National Association of Real Estate Investment Trusts, speaking for an umbrella group called the Coalition to Insure Against Terrorism.
TRIA was enacted as a three-year program and is scheduled to expire at the end of this year. In the event of an attack by foreign terrorists, TRIA allows insurance companies to pay a deductible related to their premium income, after which the federal government would pay 90 percent of the damages, up to $100 billion.
The Treasury report "finds that TRIA has achieved its goals of supporting the industry during a transitional period and stabilizing the private insurance market" following the Sept. 11, 2001, attacks, Snow wrote, but "the economy is more robust today than when TRIA was enacted."
"It is our view that continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding out innovation," the secretary said in the letter.
Washington Post Staff Writer
Friday, July 1, 2005; Page D03
The Bush administration said yesterday it opposed extension of the government's terrorism insurance program "in its current form," but indicated it could accept a more restricted, clearly temporary measure that would encourage development of private coverage.
The administration's position was outlined in a letter from Treasury Secretary John W. Snow to House Financial Services Committee Chairman Michael G. Oxley (R-Ohio) accompanying a report on the performance of the existing program. It came as something of a relief to the insurance industry.
The current program, known as TRIA after the Terrorism Risk Insurance Act of 2002, provides a federal backup for commercial insurance such as business property damage and workers' compensation. It has drawn criticism as corporate welfare -- the government coverage is free to participating insurers beyond a deductible -- and insurers and real estate developers worried that the administration might oppose its extension in any form. Some interest groups that support the program said they regarded Snow's letter as an acknowledgment by the administration that there was a role for the federal government in insuring against terrorist damage.
"While the Treasury Department clearly . . . does not want TRIA extended, it does leave open some kind of federal backstop," said Leigh Ann Pusey of the American Insurance Association.
Some consumer advocates who oppose the program were heartened by the study's findings.
It "agrees with what we've been saying -- [TRIA] is too generous to a very rich insurance industry," said J. Robert Hunter of the Consumer Federation of America.
But other business groups argued that if insurance dried up, there would be economic damage.
"This risk is so unique it has been very difficult for the insurance industry" to gauge, said Martin L. DePoy of the National Association of Real Estate Investment Trusts, speaking for an umbrella group called the Coalition to Insure Against Terrorism.
TRIA was enacted as a three-year program and is scheduled to expire at the end of this year. In the event of an attack by foreign terrorists, TRIA allows insurance companies to pay a deductible related to their premium income, after which the federal government would pay 90 percent of the damages, up to $100 billion.
The Treasury report "finds that TRIA has achieved its goals of supporting the industry during a transitional period and stabilizing the private insurance market" following the Sept. 11, 2001, attacks, Snow wrote, but "the economy is more robust today than when TRIA was enacted."
"It is our view that continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding out innovation," the secretary said in the letter.
Terror Insurance Program Criticized
By Albert B. Crenshaw
Washington Post Staff Writer
Friday, July 1, 2005; Page D03
The Bush administration said yesterday it opposed extension of the government's terrorism insurance program "in its current form," but indicated it could accept a more restricted, clearly temporary measure that would encourage development of private coverage.
The administration's position was outlined in a letter from Treasury Secretary John W. Snow to House Financial Services Committee Chairman Michael G. Oxley (R-Ohio) accompanying a report on the performance of the existing program. It came as something of a relief to the insurance industry.
The current program, known as TRIA after the Terrorism Risk Insurance Act of 2002, provides a federal backup for commercial insurance such as business property damage and workers' compensation. It has drawn criticism as corporate welfare -- the government coverage is free to participating insurers beyond a deductible -- and insurers and real estate developers worried that the administration might oppose its extension in any form. Some interest groups that support the program said they regarded Snow's letter as an acknowledgment by the administration that there was a role for the federal government in insuring against terrorist damage.
"While the Treasury Department clearly . . . does not want TRIA extended, it does leave open some kind of federal backstop," said Leigh Ann Pusey of the American Insurance Association.
Some consumer advocates who oppose the program were heartened by the study's findings.
It "agrees with what we've been saying -- [TRIA] is too generous to a very rich insurance industry," said J. Robert Hunter of the Consumer Federation of America.
But other business groups argued that if insurance dried up, there would be economic damage.
"This risk is so unique it has been very difficult for the insurance industry" to gauge, said Martin L. DePoy of the National Association of Real Estate Investment Trusts, speaking for an umbrella group called the Coalition to Insure Against Terrorism.
TRIA was enacted as a three-year program and is scheduled to expire at the end of this year. In the event of an attack by foreign terrorists, TRIA allows insurance companies to pay a deductible related to their premium income, after which the federal government would pay 90 percent of the damages, up to $100 billion.
The Treasury report "finds that TRIA has achieved its goals of supporting the industry during a transitional period and stabilizing the private insurance market" following the Sept. 11, 2001, attacks, Snow wrote, but "the economy is more robust today than when TRIA was enacted."
"It is our view that continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding out innovation," the secretary said in the letter.
Washington Post Staff Writer
Friday, July 1, 2005; Page D03
The Bush administration said yesterday it opposed extension of the government's terrorism insurance program "in its current form," but indicated it could accept a more restricted, clearly temporary measure that would encourage development of private coverage.
The administration's position was outlined in a letter from Treasury Secretary John W. Snow to House Financial Services Committee Chairman Michael G. Oxley (R-Ohio) accompanying a report on the performance of the existing program. It came as something of a relief to the insurance industry.
The current program, known as TRIA after the Terrorism Risk Insurance Act of 2002, provides a federal backup for commercial insurance such as business property damage and workers' compensation. It has drawn criticism as corporate welfare -- the government coverage is free to participating insurers beyond a deductible -- and insurers and real estate developers worried that the administration might oppose its extension in any form. Some interest groups that support the program said they regarded Snow's letter as an acknowledgment by the administration that there was a role for the federal government in insuring against terrorist damage.
"While the Treasury Department clearly . . . does not want TRIA extended, it does leave open some kind of federal backstop," said Leigh Ann Pusey of the American Insurance Association.
Some consumer advocates who oppose the program were heartened by the study's findings.
It "agrees with what we've been saying -- [TRIA] is too generous to a very rich insurance industry," said J. Robert Hunter of the Consumer Federation of America.
But other business groups argued that if insurance dried up, there would be economic damage.
"This risk is so unique it has been very difficult for the insurance industry" to gauge, said Martin L. DePoy of the National Association of Real Estate Investment Trusts, speaking for an umbrella group called the Coalition to Insure Against Terrorism.
TRIA was enacted as a three-year program and is scheduled to expire at the end of this year. In the event of an attack by foreign terrorists, TRIA allows insurance companies to pay a deductible related to their premium income, after which the federal government would pay 90 percent of the damages, up to $100 billion.
The Treasury report "finds that TRIA has achieved its goals of supporting the industry during a transitional period and stabilizing the private insurance market" following the Sept. 11, 2001, attacks, Snow wrote, but "the economy is more robust today than when TRIA was enacted."
"It is our view that continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding out innovation," the secretary said in the letter.
MetLife Completes Acquisition of Travelers Life
July 1, 2005
Just one day after Connecticut officials approved the deal, MetLife announced it has completed the acquisition of Citigroup's Travelers Life & Annuity and substantially all of Citigroup's international insurance businesses for $11.8 billion.
Under the terms of the agreement, Citigroup received approximately $1 billion in MetLife common stock and $10.8 billion in cash, subject to post-closing adjustment. The sale will result in a third quarter gain of approximately $2 billion after tax for Citigroup.
"This transaction significantly increases our size and scale in our core insurance and annuity products and expands our presence in the retirement and savings and international markets," said Robert H. Benmosche, chairman and chief executive officer of MetLife.
"The distribution agreements with Citigroup, complementing our existing channels, provide us with one of the broadest distribution networks in the industry. Altogether, the transaction solidifies our leadership position in the industry and provides a platform for growth beginning with modest earnings accretion in the second half of 2005."
"In the past few months leading up to the closing, we have made major strides and look forward to integrating the Travelers operations swiftly and smoothly into MetLife," said C. Robert Henrikson, president and chief operating officer of MetLife. "Operationally and in terms of our business focus, this is a great fit. We look forward to maximizing the opportunity."
As part of the transaction, MetLife products will be available through certain Citigroup distribution channels, including Smith Barney, Citibank branches, and Primerica in the U.S., as well as a number of international businesses, under ten-year agreements.
MetLife also announced that, in a transaction related to the acquisition of Citigroup insurance businesses, it signed an agreement with Citigroup to acquire CitiStreet Associates, a division of CitiStreet LLC, which is primarily involved in the distribution of 403(b) and 457 annuity products to the healthcare, education and not-for-profit markets. This transaction is expected to close on September 1, 2005. CitiStreet LLC is a joint venture owned equally by affiliates of Citigroup and State Street Corporation. CitiStreet LLC is not being acquired by MetLife.
In approving MetLife's acquisition of Hartford-based Travelers Life and Annuity, Connecticut Insurance Commissioner Susan Cogswell required the insurer to report to state officials any changes in its business and employment levels.
In her order, Cogswell said MetLife must honor its commitments spelled out in a letter in which it vowed to maintain 1,310 jobs in Hartford for one year after the closing. MetLife also indicated it has no plans to substantially reduce its writings in Connecticut.
The merger had come in for criticism from state Attorney General Richard Blumenthal, Hartford Mayor Eddie Perez and other officials over potential job losses in Hartford. MetLife initially said it would eliminate 600 jobs and relocate an additional 100. Following negotiations with Gov. M. Jodi Rell, it later said the cuts would amount to 390, with another 100 jobs to be relocated.
Attorney General Blumenthal told Associated Press Cogswell's decision "appears to hold MetLife to past commitments ? but no more."
Just one day after Connecticut officials approved the deal, MetLife announced it has completed the acquisition of Citigroup's Travelers Life & Annuity and substantially all of Citigroup's international insurance businesses for $11.8 billion.
Under the terms of the agreement, Citigroup received approximately $1 billion in MetLife common stock and $10.8 billion in cash, subject to post-closing adjustment. The sale will result in a third quarter gain of approximately $2 billion after tax for Citigroup.
"This transaction significantly increases our size and scale in our core insurance and annuity products and expands our presence in the retirement and savings and international markets," said Robert H. Benmosche, chairman and chief executive officer of MetLife.
"The distribution agreements with Citigroup, complementing our existing channels, provide us with one of the broadest distribution networks in the industry. Altogether, the transaction solidifies our leadership position in the industry and provides a platform for growth beginning with modest earnings accretion in the second half of 2005."
"In the past few months leading up to the closing, we have made major strides and look forward to integrating the Travelers operations swiftly and smoothly into MetLife," said C. Robert Henrikson, president and chief operating officer of MetLife. "Operationally and in terms of our business focus, this is a great fit. We look forward to maximizing the opportunity."
As part of the transaction, MetLife products will be available through certain Citigroup distribution channels, including Smith Barney, Citibank branches, and Primerica in the U.S., as well as a number of international businesses, under ten-year agreements.
MetLife also announced that, in a transaction related to the acquisition of Citigroup insurance businesses, it signed an agreement with Citigroup to acquire CitiStreet Associates, a division of CitiStreet LLC, which is primarily involved in the distribution of 403(b) and 457 annuity products to the healthcare, education and not-for-profit markets. This transaction is expected to close on September 1, 2005. CitiStreet LLC is a joint venture owned equally by affiliates of Citigroup and State Street Corporation. CitiStreet LLC is not being acquired by MetLife.
In approving MetLife's acquisition of Hartford-based Travelers Life and Annuity, Connecticut Insurance Commissioner Susan Cogswell required the insurer to report to state officials any changes in its business and employment levels.
In her order, Cogswell said MetLife must honor its commitments spelled out in a letter in which it vowed to maintain 1,310 jobs in Hartford for one year after the closing. MetLife also indicated it has no plans to substantially reduce its writings in Connecticut.
The merger had come in for criticism from state Attorney General Richard Blumenthal, Hartford Mayor Eddie Perez and other officials over potential job losses in Hartford. MetLife initially said it would eliminate 600 jobs and relocate an additional 100. Following negotiations with Gov. M. Jodi Rell, it later said the cuts would amount to 390, with another 100 jobs to be relocated.
Attorney General Blumenthal told Associated Press Cogswell's decision "appears to hold MetLife to past commitments ? but no more."
Century to drop auto insurance
Another auto insurer is pulling out of Massachusetts, apparently fed up with the state's convoluted regulatory system, Gov. Mitt Romney's office said yesterday.
Century Middlesex Insurance, a unit of Wisconsin-based Century Insurance, has informed Insurance Commissioner Julie Bowler that it plans to stop offering auto insurance by the end of the year, a Bowler spokesman said.
Century, with local offices in Westford, has less than 1 percent of the auto-insurance market in Massachusetts.
But that still accounts for about 22,000 insurance premiums, said the spokesman, Chris Goetcheus.
A spokesman for Century did not return phone calls yesterday.
``This is obviously further indication this market is distressed and the system isn't working,'' said Goetcheus, who added that dozens of insurers have pulled out of the state in recent years.
Gov. Mitt Romney has been pushing for a major overhaul of the auto insurance system in Massachusetts, the only state that has regulators setting insurance rates.
But Steve D'Amato, executive director for the Center for Insurance Research, said insurers are pulling out of Massachusetts due to the way high-risk drivers are assigned to and covered by companies - not because the entire system needs reform.
Century Middlesex Insurance, a unit of Wisconsin-based Century Insurance, has informed Insurance Commissioner Julie Bowler that it plans to stop offering auto insurance by the end of the year, a Bowler spokesman said.
Century, with local offices in Westford, has less than 1 percent of the auto-insurance market in Massachusetts.
But that still accounts for about 22,000 insurance premiums, said the spokesman, Chris Goetcheus.
A spokesman for Century did not return phone calls yesterday.
``This is obviously further indication this market is distressed and the system isn't working,'' said Goetcheus, who added that dozens of insurers have pulled out of the state in recent years.
Gov. Mitt Romney has been pushing for a major overhaul of the auto insurance system in Massachusetts, the only state that has regulators setting insurance rates.
But Steve D'Amato, executive director for the Center for Insurance Research, said insurers are pulling out of Massachusetts due to the way high-risk drivers are assigned to and covered by companies - not because the entire system needs reform.
Health Insurance Providers Must Have Plans for Uninsured Companies
Jul. 1--Maryland today begins requiring major insurance carriers to provide limited health plans for uninsured companies in the state.
The plans, which are part of a law that was passed last year, are meant to be viable options for companies, especially small businesses, that cannot afford standard health insurance, said Brenda Wilson, with the Maryland Insurance Administration, the state's insurance licensing and regulatory agency.
"I haven't seen the rates [for the plans], but they should be cheaper," said Ms. Wilson, the agency's chief for health insurance and managed care.
Under the law, carriers that have at least 10 percent of the small-group health care market, which includes CareFirst BlueCross BlueShield and Mid Atlantic Medical Services LLC (MAMSI), will sell capped benefit plans.
The plans are available only to businesses that pay an average annual wage that is less than 75 percent of Maryland's average salary.
Maryland's average weekly wage reached $792 in the third quarter of 2004, according to the state's most recent labor statistics.
Companies buying the plan must not have offered health insurance in the past 12 months.
The new law comes as health insurers increasingly offer starter-kit plans to uninsured employees in the hope of picking up more customers while making a dent in the nation's uninsured population of 45 million.
The insurance plans generally have rates that are half of those for traditional managed-care or physician-network plans. But they have strict limitations on coverage.
"People in the uninsured population are vastly different, with the majority being insurable and making a decent income," said Scott Krienke, vice president for individual markets at Assurant Health, a Milwaukee-based health insurer that started offering a limited-benefit plan earlier this month.
So far, the RightStart plan has enrolled 11,000 consumers in the District, Maryland and Virginia, Mr. Krienke said.
The plan has a deductible, which is what a consumer must pay before the insurer starts paying, of $500 to $2,500, about 50 percent less than deductibles for Assurant's traditional plans.
The plan has coverage for doctor visits, prescription drugs and hospital stays, much like traditional health insurance. But the benefits are capped and employees start paying out-of-pocket once they exceed the coverage.
For example, one optional benefit limits members to two doctor visits annually, which are each covered by a $25 co-payment for doctors within a certain network, before they must start paying the total cost of the visit.
The program is meant to be a "stepping-stone" plan for uninsured workers, giving them enough affordable coverage to stay healthy, Mr. Krienke said.
But minimal health coverage could cause workers to become "underinsured" and more likely to forgo needed medical care and prescription drugs to stretch their health insurance dollars, according to a recent study.
Nearly 16 million Americans between 19 to 64 were underinsured in 2003, according to the study published this month in the health policy journal Health Affairs.
The study defined the underinsured as people whose medical expenses amount to at least 10 percent of their income.
Philadelphia-based health insurer Cigna Corp., Minneapolis-based insurer UnitedHealth Group, and Louisville, Ky.-based insurer Humana Inc. will start offering a limited health plan for businesses in the fall.
The companies developed the plans, part of a National Health Access program, with the HR Policy Association, a Washington trade group for senior human resource executives.
The health plans will be available to part-time, seasonal and contract workers who normally cannot be covered through their jobs, said association spokeswoman Marisa Milton. Details are still being finalized, she said.
Aetna Inc., the Hartford, Conn.-based health insurance company, also introduced a limited health plan this year.
The plans, which are part of a law that was passed last year, are meant to be viable options for companies, especially small businesses, that cannot afford standard health insurance, said Brenda Wilson, with the Maryland Insurance Administration, the state's insurance licensing and regulatory agency.
"I haven't seen the rates [for the plans], but they should be cheaper," said Ms. Wilson, the agency's chief for health insurance and managed care.
Under the law, carriers that have at least 10 percent of the small-group health care market, which includes CareFirst BlueCross BlueShield and Mid Atlantic Medical Services LLC (MAMSI), will sell capped benefit plans.
The plans are available only to businesses that pay an average annual wage that is less than 75 percent of Maryland's average salary.
Maryland's average weekly wage reached $792 in the third quarter of 2004, according to the state's most recent labor statistics.
Companies buying the plan must not have offered health insurance in the past 12 months.
The new law comes as health insurers increasingly offer starter-kit plans to uninsured employees in the hope of picking up more customers while making a dent in the nation's uninsured population of 45 million.
The insurance plans generally have rates that are half of those for traditional managed-care or physician-network plans. But they have strict limitations on coverage.
"People in the uninsured population are vastly different, with the majority being insurable and making a decent income," said Scott Krienke, vice president for individual markets at Assurant Health, a Milwaukee-based health insurer that started offering a limited-benefit plan earlier this month.
So far, the RightStart plan has enrolled 11,000 consumers in the District, Maryland and Virginia, Mr. Krienke said.
The plan has a deductible, which is what a consumer must pay before the insurer starts paying, of $500 to $2,500, about 50 percent less than deductibles for Assurant's traditional plans.
The plan has coverage for doctor visits, prescription drugs and hospital stays, much like traditional health insurance. But the benefits are capped and employees start paying out-of-pocket once they exceed the coverage.
For example, one optional benefit limits members to two doctor visits annually, which are each covered by a $25 co-payment for doctors within a certain network, before they must start paying the total cost of the visit.
The program is meant to be a "stepping-stone" plan for uninsured workers, giving them enough affordable coverage to stay healthy, Mr. Krienke said.
But minimal health coverage could cause workers to become "underinsured" and more likely to forgo needed medical care and prescription drugs to stretch their health insurance dollars, according to a recent study.
Nearly 16 million Americans between 19 to 64 were underinsured in 2003, according to the study published this month in the health policy journal Health Affairs.
The study defined the underinsured as people whose medical expenses amount to at least 10 percent of their income.
Philadelphia-based health insurer Cigna Corp., Minneapolis-based insurer UnitedHealth Group, and Louisville, Ky.-based insurer Humana Inc. will start offering a limited health plan for businesses in the fall.
The companies developed the plans, part of a National Health Access program, with the HR Policy Association, a Washington trade group for senior human resource executives.
The health plans will be available to part-time, seasonal and contract workers who normally cannot be covered through their jobs, said association spokeswoman Marisa Milton. Details are still being finalized, she said.
Aetna Inc., the Hartford, Conn.-based health insurance company, also introduced a limited health plan this year.
Thursday, June 30, 2005
Oregon shouldn't jump into proposed statewide insurance pool
DEAN KORTGE
STEVE DOTY
June 30, 2005
Our credentials: The Oregon Association of Insurance and Financial Advisors and the Oregon Association of Health Underwriters have more than 100 years of total experience in the group health-insurance business and provide services to a majority of the health-insurance purchasers throughout the state.
The Legislature is rightfully cautious about killing one 90,000-member statewide insurance pool, provided by the 35-year-old Oregon School Boards Association (OSBA) Insurance Trust, and replacing it with another pool without any history. In this Legislature, the old axiom "know where you will land before you jump" has come to the front and the SB 639A advocates don't like it.
There has been no actuarial analysis of the proposal to determine if there will be any savings. Furthermore, some advocates refuse to even consider conducting such a study.
A June 22 article in the Statesman-Journal ignores a June 21 Statesman-Journal article citing Sen. Avel Gordly's worries about the "lack of evidence of savings." Sen. Gordly, D- Portland, gave the subcommittee a "courtesy vote" for the bill because of some apparent pressure (not from Republicans) to move the bill.
Advocates of SB 639A claim that a couple of other states did a study and found that a mandatory statewide insurance pool might save money. But none of those states have moved forward to implement a statewide pool.
Besides, Oregon's health-insurance market is different, and studies from other states simply can't be applied here. The fact is that the SB 639A proposal just replaces one statewide pool with another and punishes the OSBA Insurance Trust for having done a good job with their pool's management.
Just four months ago, The Oregonian reported that the health insurance offered to school districts through the OSBA Trust was significantly less expensive than that offered to state employees through the Public Employees Benefit Board. The question needs to be asked: How will dollars be saved when the health-insurance pool the advocates of this bill would like to emulate is actually more expensive than what's currently available?
Insurance pools are great and in many cases we support them. The OSBA has operated a very successful insurance pool for 35 years. It has worked because it is subject to marketplace competition. Larger school districts can self-insure, and all districts can buy insurance from the private market if they can find a better deal. Competition melts away fat in any system. A state-controlled monopoly program will not.
The current structure has worked far better than any state-managed group (remember PERS), so why jump into it before you clearly know where you will land?
STEVE DOTY
June 30, 2005
Our credentials: The Oregon Association of Insurance and Financial Advisors and the Oregon Association of Health Underwriters have more than 100 years of total experience in the group health-insurance business and provide services to a majority of the health-insurance purchasers throughout the state.
The Legislature is rightfully cautious about killing one 90,000-member statewide insurance pool, provided by the 35-year-old Oregon School Boards Association (OSBA) Insurance Trust, and replacing it with another pool without any history. In this Legislature, the old axiom "know where you will land before you jump" has come to the front and the SB 639A advocates don't like it.
There has been no actuarial analysis of the proposal to determine if there will be any savings. Furthermore, some advocates refuse to even consider conducting such a study.
A June 22 article in the Statesman-Journal ignores a June 21 Statesman-Journal article citing Sen. Avel Gordly's worries about the "lack of evidence of savings." Sen. Gordly, D- Portland, gave the subcommittee a "courtesy vote" for the bill because of some apparent pressure (not from Republicans) to move the bill.
Advocates of SB 639A claim that a couple of other states did a study and found that a mandatory statewide insurance pool might save money. But none of those states have moved forward to implement a statewide pool.
Besides, Oregon's health-insurance market is different, and studies from other states simply can't be applied here. The fact is that the SB 639A proposal just replaces one statewide pool with another and punishes the OSBA Insurance Trust for having done a good job with their pool's management.
Just four months ago, The Oregonian reported that the health insurance offered to school districts through the OSBA Trust was significantly less expensive than that offered to state employees through the Public Employees Benefit Board. The question needs to be asked: How will dollars be saved when the health-insurance pool the advocates of this bill would like to emulate is actually more expensive than what's currently available?
Insurance pools are great and in many cases we support them. The OSBA has operated a very successful insurance pool for 35 years. It has worked because it is subject to marketplace competition. Larger school districts can self-insure, and all districts can buy insurance from the private market if they can find a better deal. Competition melts away fat in any system. A state-controlled monopoly program will not.
The current structure has worked far better than any state-managed group (remember PERS), so why jump into it before you clearly know where you will land?
Subscribe to:
Posts (Atom)
:.
