Mercury Cuts California Auto Insurance Rates

Mercury General Corp., today is expected to announce rate cuts for about 1.7 million of its California automobile insurance and homeowner insurance customers, mainly in Southern California.

The owners of 1.5 million cars will shave 3% off their annual bills, about $30 per vehicle, according to the California Department of Insurance. Savings statewide should total $41 million a year. Mercury is the third-largest auto insurer in California, with 9.7% of the market.

The auto insurance rate reductions were based partially on new state criteria that downplay the importance of the ZIP Code where a car is typically parked overnight. The cut took effect in May but had not been announced, the department said.

California has had the country's most heavily regulated insurance business since voters approved Proposition 103 in 1988.

Mercury's new rates for homeowner insurance, which take effect in August, will drop by 10% for 224,000 customers. That represents individual savings of about $100 a year for homes in Southern California and $83 elsewhere in the state.

Renters' premiums will drop by 33%, saving approximately $85 a year for Mercury's customers in Southern California and slightly less in other parts of the state, the department said. The company is the state's eighth-largest homeowner carrier, covering about 3% of insured dwellings.

The savings should be a big help for renters, about 40% of California's population, especially those who may have lost their previous homes to foreclosure because of the sub-prime mortgage crisis, the department said.

Under Poizner, savings from a number of automobile insurance rate reductions totaled about $1 billion for 2007 and so far in 2008. Homeowners' savings during the same period were $558 million, the Department of Insurance said.

Mercury's cuts in auto insurance rates are in line with recent industry trends in California. For the last few years, insurance companies have earned strong profits with declines in accident frequency and severity.

Homeowners' rates also declined under pressure from regulators but may be poised to rise again, industry analysts said. The state's three biggest companies, covering more than half of insured homes, have requests for rate hikes pending.

The Underinsured

From Business Week

The number of American adults who had inadequate health insurance coverage rose 60% from 2003 to 2007, from 16 million to more than 25 million people.

Hardest hit were families with middle and higher incomes, those whose income was 200 percent above the federal poverty level or those with an annual income of $40,000 or more, a new report by The Commonwealth Fund found.

The report is published in the June 10 issue of Health Affairs.

To make their estimates, the researchers conducted a national survey in 2007 of 3,501 adults. They found that among adults aged 19 to 64, 25.2 million were "underinsured." That number was based on out-of-pocket health-care costs as a proportion of income.

People who are underinsured are people who have health insurance but spend 10 percent or more of their income on out-of-pocket medical expenses. For people below 200 percent of the federal poverty level, being underinsured means spending more than 5 percent of income on out-of-pocket medical costs.

Being underinsured also means paying deductibles of 5 percent or more of family income.

The researchers found that people who were underinsured were more likely to go without needed health care and have problems paying medical bills, compared with people who have adequate health insurance.

In fact, 53 percent of the underinsured and 68 percent of those without health insurance had to forgo needed medical care, such as not seeing a doctor when sick, not filling prescriptions, and not getting recommended diagnostic tests or treatments. "The underinsured look a lot like the uninsured," Schoen said.

Among the underinsured, 45 percent reported having difficulty paying bills, being contacted by collection agencies for unpaid bills, and curtailing their way of life to pay their medical bills, compared with 21 percent of people with adequate health insurance.

Also, underinsured people were more likely to have insurance plans that limit payments. They were also more likely to have high deductibles. For example, one quarter of underinsured people had deductibles of $1,000 or more, the report found.

However, premiums for the underinsured were similar to or higher than those paid by people with adequate insurance, the researchers found.

Is Health Insurance a Societal Obligation?

Forty-five million uninsured Americans prompted the Senate Finance Committee to discuss ways to reform health care, listening to recommendations that could help to provide insurance coverage to the uninsured. According to panelists, the uninsured are shut out of the system due to increasingly high health care costs, high insurance rates, and partial coverage.

Ron Williams, the CEO of Aetna, told the committee that lowering insurance rates will require lowering the cost of health care since the price of insurance reflects on the cost of treatment. Williams also said universal participation in health insurance is necessary to lower prices and help those in need, comparing societal assistance in health care to food taxes that help feed the hungry. He noted that patients seeking coverage after being diagnosed with a serious illness is not insurance but in fact a way of financing treatment, suggesting that measures be taken to combat reactionary purchases of health insurance. Williams also said that grouping people by methods other than risk factors would allow for an even distribution of healthy and unhealthy and prevent costs from skyrocketing due to an influx of customers needing high remittances.

Mark Hall, a professor at Wake Forest University, agreed with Williams’s idea of grouping customers into pools without determining risk factors. Hall said that one percent of the American population uses almost 25 percent of federal expenditures on health care while half the population uses four percent. Hall said that pooling would allow natural statistics to have an effect on health prices by preventing concentration of the sick. Raymond Arth, a small business owner from Ohio, urged the committee to be conscious of small business owners. Arth said that small business owners desire to provide health insurance to employees but that increasing renewal figures make it difficult financially.

eHealthinsurance.com Joins Partnership

A partnership was announced this morning by eHealthinsurance and a small business advocacy group that seeks to fix a serious the small business problem: the lack of health insurance.

EHealthinsurance has partnered with the National Federation of Independent Business to offer a customized technology designed to facilitate the use of HSAs.

EHealthinsurance represents nearly 200 individual health insurance carriers and has about 9,000 to 10,000 different health insurance plans listed on its site.

EHealth Senior Vice President Sam Gibbs said the Mountain View, Calif.-based company began noticing that over the last 15 months many small businesses were no longer purchasing group health insurance plans and instead were signing up for individual coverage.

EHealth has created a tool that encourages a business owner to contribute to an employee's HSA. For example, if a company has 10 employees, the business owner may decide that he could contribute $500 per employee per year toward HSAs.

Individuals are not penalized if they use HSA funds to pay for qualified medical expenses and any unused funds can be rolled over if they are not used by the end of the calender year.

Presidential Health Care Debat

The candidates' early emphasis on health care is a promising start to the presidential race.
Presumptive Democratic nominee Barack Obama opened his historic race for the presidency last week in Southwest Virginia with a promise: affordable health care for all.
A sign in front of him stated the pledge as he spoke before an enthusiastic crowd in Bristol. He talked at length about his plan for universal health insurance coverage.
John McCain's campaign quickly fired a shot at it and countered with the presumptive Republican nominee's ideas for health care reform.
Fantastic.
The candidates need to pound this issue hard -- not so much to work out details as to give it the momentum it must have in January, when a new president takes office. He will have to persuade Congress to act so that all Americans are assured access to health care.
Voters have heard the promise before. The Clinton administration tried to deliver on it and failed. The urgency has grown only greater in the intervening years.
Obama says he will accept no campaign contributions from registered lobbyists or political action committees -- part of the change he promises in Washington's status quo. Commendable. By that he is saying that on a host of seemingly intractable problems, such as health care for all, he will put the broader interests of society over the special interests of big donors.
But only Congress can enact laws that might resolve these issues, and members of Congress have made no such pledge.
To pass landmark health care legislation, lawmakers will have to see in the November election results a voter mandate. Only then will the next president be able to lead a reform movement and succeed.
America is facing peril on many fronts this election year: It is bogged down in war, reeling from high gasoline prices, worrying seriously at last about climate change. And looming over all, still too little noticed, the Bush White House's extraordinary claims to power. They threaten the Constitution's protections that guard the people against government abuses and their government against an imperial presidency.
Among its litany of new ills, the chronic crisis of having hundreds of millions of Americans uninsured and underinsured should rank high on voters' agenda. Even then, comprehensive reform will be a daunting challenge.
Charles Edwards, a 95-year-old from Union Hall, went to Bristol Thursday to give Obama a maple walking stick and, unwittingly, some good medicine for the campaign.
"If members of Congress don't pass my health care bill, I'm ready," the candidate joked. "I'll whup 'em."
They're due for a lickin'.

Taken from the Roanoke Times

State Farm Lowers Auto Insurance Rates

State Farm insurance says it's lowering auto insurance rates in Louisiana by an average of 2.5% at the end of June.

State Farm says the rate rolll-back represents an annual savings of $22.4 million to its Louisiana customers. State Farm insures about one in every three cars in Louisiana.

Company vice president Rob Stewart says the reduction is due to a better claims experience in the state.

Premiums for collision and comprehensive coverages are decreasing the most. The cost of the liability and medical payments coverages will go up for some and down for others.

The new rates are effective June 30.

Health Insurance Companies Rated by Providers

Providers are now rating the health insurance companies and according to recent reports, Aetna is doing better than other big health insurance plans.

There are several sources now available that rate health insurance companies, each with their own approach. One of the more intriguing is published by the Verden Group (tracks the policy changes that carriers make on a daily basis, alerting providers "to any administrative and clinical policy, procedure and reimbursement changes occurring in the networks in which you participate, at the time these changes are occurring.)

In contrast, athenahealth's payer rating system, PayerView(sm) is designed to evaluate the "ease of doing business with a payer."

In these reports, Aetna & CIGNA performed well while Health Net fared the worst