From the Boston Herald
In the confusing debate over auto insurance reform ? dueling TV ads being the latest addition to the mix ? there is no escaping one simple fact:
Like rats leaving a sinking ship, insurance carriers have been fleeing Massachusetts in droves over the past decade. Today, only 19 insurers write auto insurance policies here. In January, it will be 18.
Anyone with a clue knows why. There is zero competition in the auto insurance market in the Bay State. Our byzantine bureaucracy tells insurers exactly what they must offer ? and what they must charge, the only state in the nation to do so.
The system stifles competition. The method used to apportion high-risk drivers is unfair and unwieldy and there is no incentive to root out fraud, so Massachusetts drivers are filing more claims than those in any other state.
And that leads us to the impact on the consumer. Good drivers pay far more than they should to subsidize higher-risk drivers. There is no choice. And the result is Massachusetts drivers pay the fourth-highest rates in the nation to insure their cars.
It?s time to fix the system, and Gov. Mitt Romney?s proposal ? set for a hearing at the State House today ? is the place to start. It reintroduces competition to the marketplace. It cracks down on fraud. And it will save money for the majority of drivers.
Don?t be fooled by the ubiquitous ?The governor thinks I?m a reject? ads. They?re backed by select insurers that oppose the reforms in the governor?s plan because they would be forced to share more of the burden for insuring high-risk drivers.
And no great surprise ? the ads don?t tell you the whole story. Yes, if the state is no longer setting rates, insurers will be able to consider factors like creditworthiness in determining what they charge. That is obviously to the benefit of responsible drivers with clean driving records, but the small percentage of high-risk drivers won?t be left on the side of the road, uninsured, as the ads imply. There are clear protections built into the bill.
The Legislature has been stalling on the auto insurance reform front while it focuses on health care, and so much of that debate has been about giving insurers flexibility to provide lower-cost products. It?s not exactly an apples-to-apples comparison, but clearly some lawmakers see the benefit of competition in the insurance marketplace. Let?s hope they bring that same sensibility to the debate on auto insurance reform, where it is needed the most.
Tuesday, November 15, 2005
Wyoming considers expanding health insurance coverage
Associated Press
CHEYENNE -- Thousands of Wyoming residents who currently have no health insurance could be covered under a proposal now before a legislative committee.
The Joint Interim Committee on Labor, Health and Social Services on Monday will consider expanding the state's current health insurance program for children to cover their parents and guardians as well.
Committee Co-chairman Rep. Doug Osborn, R-Buffalo, says expanding the program would cost the state $1.65 million over the next two years. In addition, he said another $3.35 million in federal funds would be required.
About 4,700 children are now enrolled in the health insurance program, called KidCare. The program has a combined state and federal budget of $26 million over two years.
Osborn said expanding the program would be limited to 3,700 adults who meet income guidelines.
Sen. Mike Massie, D-Laramie, led the crafting of the bill. He said that in order to be eligible, parents also would have to be employed and their employers would have to contribute to the cost of the insurance coverage.
Massie said there are more than 70,000 people in Wyoming with no health insurance.
Sen. Charles Scott, R-Casper, a committee co-chairman, said he wants more information about short-term and long-term expenses before he takes a position on the bill. He noted that health care costs are rising between 7- to 10 percent a year.
Scott said the bill is "a move down the road to state health care coverage."
CHEYENNE -- Thousands of Wyoming residents who currently have no health insurance could be covered under a proposal now before a legislative committee.
The Joint Interim Committee on Labor, Health and Social Services on Monday will consider expanding the state's current health insurance program for children to cover their parents and guardians as well.
Committee Co-chairman Rep. Doug Osborn, R-Buffalo, says expanding the program would cost the state $1.65 million over the next two years. In addition, he said another $3.35 million in federal funds would be required.
About 4,700 children are now enrolled in the health insurance program, called KidCare. The program has a combined state and federal budget of $26 million over two years.
Osborn said expanding the program would be limited to 3,700 adults who meet income guidelines.
Sen. Mike Massie, D-Laramie, led the crafting of the bill. He said that in order to be eligible, parents also would have to be employed and their employers would have to contribute to the cost of the insurance coverage.
Massie said there are more than 70,000 people in Wyoming with no health insurance.
Sen. Charles Scott, R-Casper, a committee co-chairman, said he wants more information about short-term and long-term expenses before he takes a position on the bill. He noted that health care costs are rising between 7- to 10 percent a year.
Scott said the bill is "a move down the road to state health care coverage."
Free Market Health Insurance System 'Doesn't Work,' Op-Ed Says
The free market "doesn't work for health insurance and never did" because of "risk, selection and social justice," New York Times columnist Paul Krugman writes in an opinion piece. According to Krugman, U.S. residents who are in the "small fraction of the population" that "accounts for the bulk of medical expenses" annually will have "crushing" costs unless they have "good insurance." However, he writes, "good insurance is hard to come by" for such individuals because private health insurers "devote a lot of effort and money to screening applicants and selling insurance only to those considered unlikely to have high costs, while rejecting those with pre-existing conditions or other indicators of high future expenses." In addition, Krugman writes, "to the extent that we have to have a working system of private health insurance, it's the result of huge, though hidden subsidies." He concludes, "That system is now failing. And a rigid belief that markets are always superior to government programs -- a belief that ignores basic economics as well as experience -- stands in the way of rational thinking about what should replace it" (Krugman, New York Times, 11/14).
Monday, November 14, 2005
Kiplinger's insurance favorites
Protect what you have. For life insurance, our favorites are Insure.com, AccuQuote and InsWeb. They quickly provide price quotes from most of the top life-insurance companies. And because the sites ask enough questions about you, your medical condition, hobbies and travel, they generally match you up with a policy for which you'll qualify. Insure.com also lists each policy's underwriting criteria (what you need to do to qualify), which can be difficult to find.
For health insurance, we prefer eHealthInsurance, which provides price quotes from many companies.
For auto insurance, head to InsWeb, which quotes prices from some of the top companies. But you'll also want to visit www.statefarm.com, www.progressive.com and www.allstate.com because they're not covered by InsWeb.
For health insurance, we prefer eHealthInsurance, which provides price quotes from many companies.
For auto insurance, head to InsWeb, which quotes prices from some of the top companies. But you'll also want to visit www.statefarm.com, www.progressive.com and www.allstate.com because they're not covered by InsWeb.
Jockeys face more insurance problems
By Liz Mullen
Business First of Louisville
Updated: 7:00 p.m. ET Nov. 13, 2005
Jockeys were in arrears by more than $700,000 in premiums paid to the Jockeys' Guild health plan, according to recently released congressional records that raise new concerns about the self-insured medical plan, which covers about 500 jockeys and their families.
The records, posted on a congressional Web site, show that of 320 jockeys, 251 or 78 percent were delinquent in paying their monthly health insurance premiums. Guild policy requires that premiums must be paid two months in advance.
The records also show that about 50 jockeys owed more than $5,000 in unpaid contributions to the health plan, and eight of those owed more than $10,000, meaning they had not contributed to the health plan in many months.
And at least one jockey, Shane Sellers, said guild management told him he did not have to pay the thousands of dollars he owed for his health insurance.
The records were of payments owed to the guild heath insurance plan as of March 2005, and it is not clear how much jockeys might currently owe. Guild executives did not return phone calls.
The congressional records did not include information for about 150 jockeys who reside in California and Delaware, as those states subsidize insurance for those jockeys, although they are part of the overall guild self-insured plan.
Industry officials voice concern
"If it is true that there is $700,000 worth of uncollected premium out there, then the self-insured mechanism that was put into place to insure jockeys for health benefits is, by definition, in serious jeopardy," said John Unick, an insurance broker who has served on the National Thoroughbred Racing Association's insurance panel.
He also served on a California Horse Racing Board committee that investigated alleged problems at the Jockeys' Guild.
Self-insured health plans are dependent on members paying their premiums or contributions on time, Unick noted. Like other self-insured plans, the guild's health plan uses funds from premiums to pay claims.
Barry Broad, an attorney who is advising a group of jockeys trying to oust the guild's current management, said he recently found out about the delinquent health premiums.
"If there is that kind of unfunded liability in their health care plan, there could be a big problem," said Broad, who recently quit as the guild's lobbyist because of concerns with the guild's management.
"I am very concerned," he said. "I am concerned whether it's insolvent or leaning towards insolvency, if that is what they have allowed to happen."
Guild allowed other policy to lapse
The Jockey's Guild, which represents 1,200 professional jockeys nationwide, has been under fire for a year for its management of a different insurance policy.
That policy, which covered jockeys for $1 million in medical bills related to on-track racing accidents, was allowed to lapse in 2002, but jockeys were not officially notified that it expired.
Jockeys discovered that plan was not in place only after Gary Birzer, a West Virginia jockey, was paralyzed in July 2004 and was not covered for more than $500,000 in medical bills.
Jockeys' Guild CEO Wayne Gertmenian was slammed by members of the U.S. House Energy and Commerce Committee's Subcommittee on Oversight and Investigation at an Oct. 18 hearing for allowing the policy to lapse and not informing the members.
That committee recently published a number of documents, including the health insurance premium list, on its Web site.
Since that hearing, a number of jockeys have called for Gertmenian to resign, and the guild's 27-member senate has called an emergency meeting for Nov. 15 to consider removing him and his management team.
Gertmenian did not return a message left with his assistant and a message on his voice mail.
Guild employee calls reports 'very disturbing'
The lack of catastrophic on-track accident coverage affects only jockeys who suffer work-related injuries.
But about 500 jockeys, their spouses and children, routinely rely on the guild's health plan as their insurance coverage for non-work related medical problems.
Darrell Haire, the Jockeys' Guild member field representative and the only guild employee who agreed to be interviewed, said, "I have heard some talk that there were a lot of riders behind (in paying premiums), and they had sent out letters months ago saying they were to pay the premiums or be canceled."
Haire said he did not know what happened with the letters or whether riders were dropped from the policy.
"I don't know what the heck is going on here," Haire said. "It's very disturbing information I am hearing. I don't know what to believe anymore."
Sellers says Guild official told him not to pay
Sellers, an outspoken retired jockey who led a protest at Churchill Downs last year over the insurance issue, now feels he was abandoned by guild management.
He said he received a bill for thousands of dollars he owed in insurance premiums a few months ago and that he called guild vice president Albert Fiss about it.
"I said, 'I ain't paying this,' and Albert told me, 'Shane, don't worry about it,'" Sellers said.
Sellers said he believes he still is covered by the insurance policy.
Fiss did not return phone messages left on his cell phone.
Walter Cullum, a jockey who also was formerly an outspoken supporter of guild management, said he received a call from Gertmenian a few months ago.
He said Gertmenian offered to loan him money to pay his overdue premiums of thousands of dollars. "He said, 'Walter, you are one of the people I am calling that are in arrears. ... I am willing to loan you the money, and you will have to pay me, Dr. G., down the line.' "
Cullum said he declined the offer and that he later was dropped from the insurance policy.
Broad, a lobbyist who represents several labor unions, said it would be "serious misconduct" for any guild official to allow certain members not to pay medical premiums, as Sellers claimed occurred in his case.
"If that is true, that is very disturbing," he said. If guild officials forgave debts owed to the guild, "that is essentially giving away assets," Broad said.
Business First of Louisville
Updated: 7:00 p.m. ET Nov. 13, 2005
Jockeys were in arrears by more than $700,000 in premiums paid to the Jockeys' Guild health plan, according to recently released congressional records that raise new concerns about the self-insured medical plan, which covers about 500 jockeys and their families.
The records, posted on a congressional Web site, show that of 320 jockeys, 251 or 78 percent were delinquent in paying their monthly health insurance premiums. Guild policy requires that premiums must be paid two months in advance.
The records also show that about 50 jockeys owed more than $5,000 in unpaid contributions to the health plan, and eight of those owed more than $10,000, meaning they had not contributed to the health plan in many months.
And at least one jockey, Shane Sellers, said guild management told him he did not have to pay the thousands of dollars he owed for his health insurance.
The records were of payments owed to the guild heath insurance plan as of March 2005, and it is not clear how much jockeys might currently owe. Guild executives did not return phone calls.
The congressional records did not include information for about 150 jockeys who reside in California and Delaware, as those states subsidize insurance for those jockeys, although they are part of the overall guild self-insured plan.
Industry officials voice concern
"If it is true that there is $700,000 worth of uncollected premium out there, then the self-insured mechanism that was put into place to insure jockeys for health benefits is, by definition, in serious jeopardy," said John Unick, an insurance broker who has served on the National Thoroughbred Racing Association's insurance panel.
He also served on a California Horse Racing Board committee that investigated alleged problems at the Jockeys' Guild.
Self-insured health plans are dependent on members paying their premiums or contributions on time, Unick noted. Like other self-insured plans, the guild's health plan uses funds from premiums to pay claims.
Barry Broad, an attorney who is advising a group of jockeys trying to oust the guild's current management, said he recently found out about the delinquent health premiums.
"If there is that kind of unfunded liability in their health care plan, there could be a big problem," said Broad, who recently quit as the guild's lobbyist because of concerns with the guild's management.
"I am very concerned," he said. "I am concerned whether it's insolvent or leaning towards insolvency, if that is what they have allowed to happen."
Guild allowed other policy to lapse
The Jockey's Guild, which represents 1,200 professional jockeys nationwide, has been under fire for a year for its management of a different insurance policy.
That policy, which covered jockeys for $1 million in medical bills related to on-track racing accidents, was allowed to lapse in 2002, but jockeys were not officially notified that it expired.
Jockeys discovered that plan was not in place only after Gary Birzer, a West Virginia jockey, was paralyzed in July 2004 and was not covered for more than $500,000 in medical bills.
Jockeys' Guild CEO Wayne Gertmenian was slammed by members of the U.S. House Energy and Commerce Committee's Subcommittee on Oversight and Investigation at an Oct. 18 hearing for allowing the policy to lapse and not informing the members.
That committee recently published a number of documents, including the health insurance premium list, on its Web site.
Since that hearing, a number of jockeys have called for Gertmenian to resign, and the guild's 27-member senate has called an emergency meeting for Nov. 15 to consider removing him and his management team.
Gertmenian did not return a message left with his assistant and a message on his voice mail.
Guild employee calls reports 'very disturbing'
The lack of catastrophic on-track accident coverage affects only jockeys who suffer work-related injuries.
But about 500 jockeys, their spouses and children, routinely rely on the guild's health plan as their insurance coverage for non-work related medical problems.
Darrell Haire, the Jockeys' Guild member field representative and the only guild employee who agreed to be interviewed, said, "I have heard some talk that there were a lot of riders behind (in paying premiums), and they had sent out letters months ago saying they were to pay the premiums or be canceled."
Haire said he did not know what happened with the letters or whether riders were dropped from the policy.
"I don't know what the heck is going on here," Haire said. "It's very disturbing information I am hearing. I don't know what to believe anymore."
Sellers says Guild official told him not to pay
Sellers, an outspoken retired jockey who led a protest at Churchill Downs last year over the insurance issue, now feels he was abandoned by guild management.
He said he received a bill for thousands of dollars he owed in insurance premiums a few months ago and that he called guild vice president Albert Fiss about it.
"I said, 'I ain't paying this,' and Albert told me, 'Shane, don't worry about it,'" Sellers said.
Sellers said he believes he still is covered by the insurance policy.
Fiss did not return phone messages left on his cell phone.
Walter Cullum, a jockey who also was formerly an outspoken supporter of guild management, said he received a call from Gertmenian a few months ago.
He said Gertmenian offered to loan him money to pay his overdue premiums of thousands of dollars. "He said, 'Walter, you are one of the people I am calling that are in arrears. ... I am willing to loan you the money, and you will have to pay me, Dr. G., down the line.' "
Cullum said he declined the offer and that he later was dropped from the insurance policy.
Broad, a lobbyist who represents several labor unions, said it would be "serious misconduct" for any guild official to allow certain members not to pay medical premiums, as Sellers claimed occurred in his case.
"If that is true, that is very disturbing," he said. If guild officials forgave debts owed to the guild, "that is essentially giving away assets," Broad said.
Some against health insurance in Mass.
BOSTON, Nov. 13 (UPI) -- Massachusetts is considering requiring everyone who is able to afford it to buy private health insurance, but some young adults don't want to pay.
The legislative proposals would be aimed mostly at the 200,000 young, single adults who are healthy and without coverage.
Proposals by Gov. Mitt Romney and House Speaker Salvatore F. DiMasi would allow insurers would to create plans that would cost about $200 a month -- with subsidies for people making under $28,710 a year, the Boston Globe reported Sunday.
Many young adults do not think the they should be forced to pay for health insurance they do not need.
"If I had a wife or a kid, I would definitely get health insurance," said Christopher Raymond, a 29-year-old bartender who says he make between $600 and $800 a week. "But when you're single you don't really care. You feel like you can get away with it."
Lawmakers say that while most young adults are healthy, if they need treatment they go to an emergency room -- the most costly option subsidized by the taxpayer.
The legislative proposals would be aimed mostly at the 200,000 young, single adults who are healthy and without coverage.
Proposals by Gov. Mitt Romney and House Speaker Salvatore F. DiMasi would allow insurers would to create plans that would cost about $200 a month -- with subsidies for people making under $28,710 a year, the Boston Globe reported Sunday.
Many young adults do not think the they should be forced to pay for health insurance they do not need.
"If I had a wife or a kid, I would definitely get health insurance," said Christopher Raymond, a 29-year-old bartender who says he make between $600 and $800 a week. "But when you're single you don't really care. You feel like you can get away with it."
Lawmakers say that while most young adults are healthy, if they need treatment they go to an emergency room -- the most costly option subsidized by the taxpayer.
Sunday, November 13, 2005
Three big Health insurers, three big profits
The three big health insurers in Washington ? Premera, Regence and Group Health ? have been quietly piling up more money than they need.
The state may have to re-regulate the market for individual and family health insurance unless there is more-aggressive competition.
This is a change since the late 1990s, when the three insurance carriers shut down the individual market after losing millions. Regulation was too heavy-handed, they said; and after a year of offering no insurance for sale, they cut a deal with Gov. Gary Locke. They would open the market if the insurance commissioner's authority over their rates was replaced by a simple price-cap formula. As long as the carriers paid out at least 72 cents in benefits from each dollar, they could charge what they liked. That reopened the market. It is still open, and there are plans to choose from. (Compare them at www.ehealthinsurance.com)
But according to that California Internet company, Seattle is one of the more-expensive cities in America for health coverage. A typical policy for a family of four, with $2,000 deductible and 20-percent coinsurance, is $190 a month in San Francisco ? and $410 in Seattle.
Why? Bob Fahlman, the company's chief operating officer, listed three reasons: Washington has more coverage mandated by law; its doctors and hospitals charge more; and, "You have limited competition."
The insurance companies that fled Washington during the 1990s have not returned. Our market is relatively small. The political risk may appear high. Besides, Group Health has its own doctors, and Premera and Regence have set up networks of doctors. That raises the bar for new players.
All three players are not-for-profit. Their money belongs, in theory, to their customers. Yet, from 2000 to 2004, capital and surplus at Premera and its subsidiary, Lifeline, increased from $271 million to $446 million; at Regence and Regence Care, from $389 million to $642 million; and at Group Health, from $152 million to $371 million.
We asked Weiss Ratings, Inc., which rates companies for financial safety, whether the companies are piling up too much. "Our perspective is, the more the better," Vice President Melissa Gannon told us. "But they do have above and beyond what they need." She said Premera has 2.5 times the amount of capital it needs to be financially sound, Group Health 3.3 times and Regence 4.1 times.
We asked Insurance Commissioner Mike Kreidler whether the state has any standard for too much retained profit. It doesn't. Like Weiss', the state's standard has been the more, the better. Kreidler has, however, set a public hearing Dec. 8. The subject: "Excess surplus."
The companies appear to have a choice between more regulation or more competition. If we were them, we would prefer the second.
The state may have to re-regulate the market for individual and family health insurance unless there is more-aggressive competition.
This is a change since the late 1990s, when the three insurance carriers shut down the individual market after losing millions. Regulation was too heavy-handed, they said; and after a year of offering no insurance for sale, they cut a deal with Gov. Gary Locke. They would open the market if the insurance commissioner's authority over their rates was replaced by a simple price-cap formula. As long as the carriers paid out at least 72 cents in benefits from each dollar, they could charge what they liked. That reopened the market. It is still open, and there are plans to choose from. (Compare them at www.ehealthinsurance.com)
But according to that California Internet company, Seattle is one of the more-expensive cities in America for health coverage. A typical policy for a family of four, with $2,000 deductible and 20-percent coinsurance, is $190 a month in San Francisco ? and $410 in Seattle.
Why? Bob Fahlman, the company's chief operating officer, listed three reasons: Washington has more coverage mandated by law; its doctors and hospitals charge more; and, "You have limited competition."
The insurance companies that fled Washington during the 1990s have not returned. Our market is relatively small. The political risk may appear high. Besides, Group Health has its own doctors, and Premera and Regence have set up networks of doctors. That raises the bar for new players.
All three players are not-for-profit. Their money belongs, in theory, to their customers. Yet, from 2000 to 2004, capital and surplus at Premera and its subsidiary, Lifeline, increased from $271 million to $446 million; at Regence and Regence Care, from $389 million to $642 million; and at Group Health, from $152 million to $371 million.
We asked Weiss Ratings, Inc., which rates companies for financial safety, whether the companies are piling up too much. "Our perspective is, the more the better," Vice President Melissa Gannon told us. "But they do have above and beyond what they need." She said Premera has 2.5 times the amount of capital it needs to be financially sound, Group Health 3.3 times and Regence 4.1 times.
We asked Insurance Commissioner Mike Kreidler whether the state has any standard for too much retained profit. It doesn't. Like Weiss', the state's standard has been the more, the better. Kreidler has, however, set a public hearing Dec. 8. The subject: "Excess surplus."
The companies appear to have a choice between more regulation or more competition. If we were them, we would prefer the second.
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