Friday, October 30, 2009

Snohomish County woman pays $69,000 in restitution for insurance fraud

A Snohomish County woman who admitted to forging thousands of dollars in receipts for an insurance claim has paid $69,610 in restitution to her insurance company, State Farm. The case was investigated by the company and the Office of the Insurance Commissioner’s Special Investigations Unit.

Juli-Anna Rowe, 45, of Issaquah, has signed a diversion agreement with the Snohomish County Prosecutor’s Office. She agreed to pay full restitution of $66,610 – which she has done – and to attend a theft-awareness program and therapy. After three years, if Rowe completes the program as agreed, the insurance-fraud charge of “false claims or proof” will be dismissed.

The case stems from a 2005 insurance claim. On June 3, 2005, Rowe said, she loaded a rented U-Haul moving trailer with $85,370 in personal property and drove from her home in Washington toward her destination in California. In Oakland, Calif., she stopped to rest at a hotel. While there, she said the contents of the trailer were stolen.

State Farm paid Rowe $54,421 for the value of the property she said had been stolen. Her policy also allowed for nearly $31,000 in additional claims when she replaced some of the missing property.

In filing those additional claims, however, Rowe submitted numerous altered and forged receipts. In an interview with a detective from the state insurance commissioner’s special investigations unit, Rowe admitted to altering receipts by cutting and pasting increased amounts onto them, photocopying the forged papers and submitting those to State Farm. She also admitted that she did not replace all of the items she claimed she had.

Under the terms of her policy, intentionally concealing or misrepresenting any fact involved in a claim voids the entire claim. So Rowe paid back the $54,421 that State Farm had paid out, plus $15,189 in investigation expenses incurred by the insurer.

Special Investigations Unit Detective Sgt. Dan Sharp praised the work of State Farm on the case.

“They identified the fraud and did much of the initial investigation, making it easier for us to move ahead with this case,” he said.

Insurance news, the Halloween edition

Lots of scary stories in the news today.

First off, pay and benefits are rising at the slowest rate since 1982, according to the Associated Press.

And today brings a long list of stories expressing reservations about the federal health care reform debate in Congress. A sampling:

-Health Care Businesses at Risk in House Overhaul (AP),
-Will the Public Plan Have Higher Premiums than Private Insurance? (WA Post's Ezra Klein)
-and the Magic of Financing Health Care Reform (The New York Times Economix blog has a down-to-earth -- and worrisome -- explanation of the budget-savings assumptions in the health reform plan)

Also in the scary department is a New York Times column written by an economics professor, who argues that federal health reform "is due to explode." Why? He says that requiring everyone to buy coverage or get it through their employers would drive down wages: "In other words, millions of people would be compelled to spend lots of money on something they previously did not want, at least not at prevailing prices."

National licensing group names OIC staffer "Regulator of the Year"

The Securities and Insurance Licensing Association (SILA) has named a Washington state insurance program manager “Regulator of the Year,” in recognition of his contribution to the state’s efforts to modernize and streamline licensing of insurance agents and brokers. (In Washington, agents and brokers are now known as “insurance producers.” )

Award winner Jeff Baughman, who works for Washington Insurance Commissioner Mike Kreidler as the Licensing and Education Program Manager, was named this week at a ceremony in Phoenix, Ariz.

SILA’s “Warren E. Spruill Regulator Recognition Award” is given annually to a regulator who works to better the relationship between insurance departments and the industry.

Washington’s Office of the Insurance Commissioner has been working hard to make it possible for all licensing transactions, including accepting new applications and renewals, to be performed over the Internet. The online system was completed earlier this year.

Baughman also served as the agency’s business lead in implementing statutory changes on July 1st that brought the state very close to full compliance with the national standards for uniformity and reciprocity in the licensing of agents and brokers. Kreidler is proposing legislation to complete that goal, including dropping a fingerprinting requirement for background checks for non-resident applicants.

“We couldn’t be more pleased to see the work of Jeff and the agency recognized at the national level,” said Deputy Insurance Commissioner John Hamje. “We’re very proud of Jeff, and are equally proud of the numerous other agency staff members who’ve worked to make these projects a reality since they were first initiated in 2004. Everyone involved in this process should take great pride in this award.”

Thursday, October 29, 2009

On average, how much do workers pay for health insurance coverage?

For weeks, the Associated Press has been running a series of thumbnail sketches detailing different aspects of the health insurance reform debate going on in Congress.

Today's, published locally in the Seattle Times, answers one of the most frequent questions we get at the Washington state insurance commissioner's office: On average, how much do people pay for health coverage?

For the answer, the AP turned to the Kaiser Family Foundation's 2009 survey, which found that employer-provided coverage for one worker costs an average of $4,824 a year, with the worker paying an average of $779.

To cover a family, the cost is $13,375, with the worker paying $3,515.

But click on both links -- there's more data there about what those costs might look like in a few years, and some discussion about the potential effect of federal reform.

Insurance news: Health insurance gift cards at the supermarket, "cowboys" underpricing coverage, and Aetna's financials...

The health insurance reform news today is dominated by House Democrats unveiling their legislation, including a public option. Here's the LA Times' take.

The Washington Post's Ezra Klein takes up the interesting question: Will Any States Actually Opt Out of the Public Plan?

And the Miami Herald discovers a surprising development at the local Winn-Dixie: Gift cards to help pay for health insurance.

Here in rainy Washington state, insurance commissioner Mike Kreidler's calling for legislation to help a flood-threatened area south of Seattle get coverage. An insurers' group argues that the proposal "comes too soon and goes too far," acording to this article in Insurance Journal.

There's an interesting story on the Bloomberg wire: Zurich-based Ace Ltd. CEO Evan Greenberg says that insurers are underpricing their policies, "with `cowboys' setting unreasonable rates for coverage." The article quotes another executive as saying that rates may not increase until 2011 as insurers compete for business in a shrinking market. The story also comes on the heels of this report (which, yes, I blogged about yesterday) which talks about the possibility of a long-term reduction in insurers' investment returns. (See page 57.)

At Aetna, meanwhile, 3Q profit grew 18 percent, with executives saying in an AP story that they "finally have a handle on rising medical costs" that hurt profits earlier.

Insurance news: New report about climate and challenges for insurers

A new report from the Insurance Information Institute talks about the nation's financial crisis and how it's hit insurers. It includes an excellent overview of the recession compared to how far/quick the nation's bounced back from previous downturns.

Among the points in the 110-page report: that state and local government finances are in dire straits, with "large, long-term cuts necessary to align spending with shrinking tax revenues." And study author Robert Hartwig says the issues and threats facing insurers include larger-than-usual recent losses, long-term reductions in investment earnings, and the threat of inflation eating further into those earnings.

(Here's a PowerPoint link to the same presentation.)

Tuesday, October 27, 2009

White House report: Rural Americans face higher poverty, less health coverage, and little choice

The White House has put out a report about rural health care, trying to make the case that rural Americans -- with less insurance, higher poverty, fewer providers and fewer good-benefits jobs -- stand to benefit from the Obama administration's health reforms more than most. Among the findings:
Rural Americans pay for nearly half of their health care costs out of their own pocket, and one out of every five farmers is in medical debt.
Click here to read the report.

"Eleven Easy Ways to Destroy Your Company", and other insurance news...

Chicago businessman Jay Goltz has a great small-business column in today's New York Times. The title sums it up: "Eleven Easy Ways to Destroy Your Company."

It's a fun read, covering things as mundane as the hazards of underinflated tires and of space heaters plugged into a cheap extension cord. But look at No. 8:
8. Insurance. I asked my insurance broker what the three biggest small-business insurance failings were. His response: 1) understating insurance to value; 2) not having employment-practices insurance; 3) not having business-income replacement coverage to replace lost revenue until the company is up and running again. It is no secret that the insurance companies are in a much bigger hurry to settle a claim when they are paying out money every week to replace that income.
Other news of the day: ING, the Dutch financial services company is divesting itself of its insurance operations, the New York Times reports.

In Congress, imminent health care legislation in the House "is likely to include a new long-term care insurance program to help seniors and disabled people stay out of nursing homes," according to the Associated Press.

And in Washington state, Insurance Commissioner Mike Kreidler's calling for a broader joint underwriting authority law, so that the state could step in when a local insurance market collapses, as it has in the river valley below the Howard Hanson Dam.

Monday, October 26, 2009

WA insurance commissioner calls for legislation to help businesses find additional flood coverage

With some businesses in south King County finding it extremely difficult to buy enough flood coverage, Washington’s top insurance regulator is calling for broader powers to intervene when a local insurance market collapses.

“We keep hearing from businesses and brokers who say that the traditional market for flood coverage has dried up in parts of the Green River Valley,” said state Insurance Commissioner Mike Kreidler. “Other than federal flood insurance, some say they cannot find additional coverage at any price.”

Kreidler’s office is working with lawmakers on a draft bill for the upcoming legislative session. He’s seeking broader powers to create a “joint underwriting association” (JUA) when critical coverage becomes all but impossible to find.

For most homeowners and many businesses, the first stop for flood coverage is the National Flood Insurance Program, a federal program. Federal flood coverage is still available. But NFIP coverage limits for businesses are capped at $500,000 for a building and $500,000 for contents.

That’s often not enough for businesses, which can own property worth millions of dollars more. They also can face significant business-interruption losses from flooding. As a result, many businesses buy additional flood insurance above the federal maximum. Normally, they have no problem finding such coverage.

In parts of the Green River Valley, however, many insurers are apparently leery about the fact that the Army Corps of Engineers has said that a weakened abutment beside the Howard Hanson Dam means that the Corps may have to release more water than usual from the dam. That’s raised the possibility of flood waters overtopping levees downstream. And the Corps has said that the increased flood risk is likely to continue for several years.

In cases like this, where individual companies are unwilling to offer coverage, a joint underwriting association can be established to help fill the gap. More than two dozen states have broad JUA laws already.

Here’s how a JUA works: When coverage dries up, the insurance commissioner could intervene and order insurers to band together to provide start-up financing and guarantee solvency for a joint underwriting association. The JUA then functions as a not-for-profit insurer of last resort. The coverage may be expensive – with insurance, higher risk means higher prices -- but at least coverage is available in most cases.

“I don’t want to raise false hopes. Even if this legislation passes quickly, it’s unlikely that a JUA could be set up in time to help this winter,” said Kreidler. “But this flood risk may last for several years. And we need to be able to respond quickly to this and other potential crises.”

Any joint underwriting association must now be approved by the state legislature. (Two have been approved: one for midwives and another for daycares.) Since Washington’s legislature typically meets only in the first few months of each year, that can make it difficult to rapidly respond to a sudden collapse of the market.

Kreidler’s office sought such legislation in 2003. Insurers opposed the bill, which died in committee.

But with business owners struggling to find coverage in the Green River Valley and many millions of dollars of uninsured property in the potential flooding area, Kreidler said it’s clearly time to try again.

“This flooding is exactly the type of crisis that insurance is designed to protect against,” he said. “Businesses, jobs, inventory and expensive equipment are at risk. Situations like the one below the Howard Hanson Dam are very rare. But when they happen, we need to be able to respond quickly and ensure that people can get insurance coverage.”

Friday, October 23, 2009

Insurance news: OR toughens rate reviews, and parsing the polls

The Salem Statesman-Journal has a story out of Oregon today, titled "Can Legislation Cure Oregon's Ailing Health System?" Among the several points it covers: the state's stance on requests by health insurers to raise rates. From the story:
And reforms to insurance rate requests are under way. They'll give the state one of the toughest reporting requirements in the country. "Oregon is on the forefront of what states are doing in terms of rate review," said Teresa Miller, administrator of the Oregon Insurance Division. "We're going to be scrutinizing rate requests more closely than before."
The Wall Street Journal takes a look at the polling around universal coverage, and concludes that it's losing support among voters. From the story:
“...a (June) CBS News/New York Times poll found that 64% of Americans agreed that the federal government should guarantee health insurance for all. That consensus has unraveled. According to the September version of the same poll, support for federally guaranteed universal coverage had fallen to 51%. As Americans learn about the trade-offs health-care reform will require, their enthusiasm for it wanes.”
Fox News reports that Senate Moderates Warm to Public Option Compromise.

An editorial in USA Today urges Congress "Don't Soak the Young In Pricing Medical Coverage."

And Insurance and Financial Advisor has a story about "Broker Fees, Admin Costs Blamed for High Small Biz Premiums."

Happy Friday.

Thursday, October 22, 2009

Insurance news: MN governor calls on all governors to sign compact for cross-border insurance sales, Travelers doesn't need its umbrella so much, and skinny toddler gets her health insurance

Let's start with the New York Times, which details Congress' efforts to ratchet up the pressure on insurers.

The paper also makes the case that a vote on a Medicare bill has “become a proxy for larger issues in the debate over legislation to overhaul the health care system" -- and bodes ill for quick passage of a health reform bill.

Also from the Times comes this factoid of the day: Paul Krugman says that Medicare and Medicaid -- i.e. the government -- pay for 70 percent of the hip replacements in America.

In Minnesota, Gov. Pawlenty is trying to get other governors to sign onto his plan to set national health insurance standards and then let people buy policies from anywhere in the country. (Insurance is sold -- and largely regulated -- on a state-by-state basis now.)
In North Carolina, Travelers saw a jump in profits for the third quarter. It cited lower severe-weather losses and a rebound in its investment portfolio.

Fox News reports that some Senate moderates are uneasy about a public plan.

Lastly, the case of the toddler too skinny to get health coverage: UnitedHealth Group, the nation's largest insurer, apparently knows bad PR when it sees it. Within hours of little Aislin Bates' parents going on national TV and being bannered across internet sites, UnitedHealth reversed its earlier decision not to cover the 22-pound 2-year-old.

Making it real: The states' role in making federal health-care reform work at the local level

I wrote recently  about our office's effort to get ahead of the curve for whatever health reforms are approved by Congress. Whatever passes -- assuming that something does -- it looks increasingly likely that enacting the changes will fall partly to the states.

To make that transition as smooth as possible, Washington's insurance commissioner, Mike Kreidler, plans to convene a "realization committee" to gather ideas and input for implementing any new reforms.

In anticipation of federal health-insurance reforms that will fall partly on the states to enact, Washington state Insurance Commissioner Mike Kreidler is convening a "realization committee" to gather ideas and input for implementing the federal reforms, and then to make suggestions on the best approaches.

In some ways, the group is similar to the 2008 "local leadership councils" for health care issues. The councils, created by the legislature and convened by our office, tapped more than 120 small business owners, public health officers, mayors, hospital administrators, tribal leaders, doctors, nurses, etc. for their thoughts on health care reforms. They were asked things like how they would start health reform in WA, what an ideal health care program would look like, etc. From the resulting report:

Most council members were hopeful that significant healthcare reform would happen at the national level within four years. While a few initial comments showed some interest in pausing to see what national efforts would produce, there was near consensus about the fact that the state should not be idle and should push forward on healthcare reform. One participant said that “the state should be shovel-ready.”
That, in essence, seems to be the goal of the new committee: making sure Washington's ready to pick up whatever baton D.C. hands us.

For more about the specifics of what emerged from those early discussions, here's a link to the full report.

Wednesday, October 21, 2009

Insurance news: antitrust exemption vote, hurricane worries in FL, and jail time in a major staged-accident scam

Bloomberg is reporting on the House committee vote to end the antitrust exemption for insurers.

In a related story, has a backgrounder on the exemption, saying that the idea is picking up steam.

The Associated Press reports that large employers who self-fund their workers' health coverage "are lobbying hard to keep the status quo and be shielded from costly new regulations and requirements in the final health measure currently being negotiated behind closed doors by Obama's top aides and leading Democrats." How many workers are in such plans? Some 70 million, according to the AP.

Out of Florida comes an interesting TransWorldNews story about a major homeowner's carrier not renewing more than 60,000 Florida policies as part of a "bold risk-management strategy." Among the apparent concerns of local insurers: potentially huge losses from major hurricanes.

And a bit farther afield, Reuters reports from London on a British man who staged nearly 100 car crashes in a scam totalling nearly $3 million in claims. Nearby office workers grew suspicious about the many crashes taking place in a nearby roundabout. The man was sentenced to more than 4 years in prison.

Tuesday, October 20, 2009

Making health reform work at the local level

In anticipation of federal health-insurance reforms that will fall partly on the states to enact, Washington state Insurance Commissioner Mike Kreidler is convening a "realization committee" to gather ideas and input for implementing the federal reforms.

Staring in November 2009, the 15- to 20-person committee will solicit recommendations from opinion and community leaders across the state.

For more details on the group, click here.

The group is similar in scope and objective to Kreidler's "local leadership councils," which tapped more than 120 civic-, business-, community and health care leaders for their thoughts on health care reforms. They looked at five state legislative proposals (including one from Kreidler). I'm trying to get a copy of the recommendations; will post more on that later.

Insurance news: toddler denied insurance for being too small, the public option lives on, and credit scoring in TX

The Huffington Post picks up another strange denial out of Colorado. Parents of small children watch out:

The parents of a two-year-old girl in Colorado are unable to attain health insurance for their daughter because the insurer, United Healthcare Golden Rule, claims she is too small. In a letter sent to the family of the child, Aislin Bates, United Healthcare Golden Rule writes, "we are unable to provide coverage for Aislin because her height and weight do not meet our company standards."
And just when you thought it was dead, the public option lives on thanks to independents and senior citizens. According to the Washington Post, a new poll shows a clear majority of Americans now support creating a government operated health plan to compete with private insurers:

On the issue that has been perhaps the most pronounced flash point in the national debate, 57 percent of all Americans now favor a public insurance option, while 40 percent oppose it. Support has risen since mid-August, when a bare majority, 52 percent, said they favored it. (In a June Post-ABC poll, support was 62 percent.)
A news analysis of the impact of credit scoring on minorites comes out of Texas:

A Dallas Morning News analysis of rates that major insurers filed with the Texas Department of Insurance indicates that drivers and homeowners in the northern
part of the state with poor credit ratings pay on average at least 35 percent more for insurance than people with good credit, even when other factors, such as driving records and recent damage claims on homes, are the same.

Read the full story here.

Monday, October 19, 2009

Insurance Commissioner warns companies not to use "governmental action" exclusion to deny claims related to the Howard Hanson Dam

In response to concerns raised by some insurance brokers, Washington state Insurance Commissioner Mike Kreidler is telling business insurers not to use a common policy exclusion for “governmental actions” to deny claims if water releases from the Howard Hanson Dam flood parts of the Green River Valley.

“I strongly urge all companies to refrain from taking such a position,” Kreidler said in a letter sent to about 200 business insurers.

In this case, he said, such language doesn’t apply.

Many insurers use standardized policy language from the Insurance Services Office. Such policies typically exclude “seizure or destruction of property by order of governmental authority.”

In the Green River Valley situation, the Army Corps of Engineers has said that it may have to release more water than usual from the Howard Hanson Dam, due to structural weaknesses discovered in the earthen dam. After heavy rains, the water released from the dam could cause flooding in the valley below the dam.

“I do not believe that a government order to release water to protect the dam constitutes the type of `destruction of property by order of governmental authority’” included in many insurers’ commercial flood policies, Kreidler said.

For one thing, he said, the key cause of such flooding would be the heavy rainfall. Also, the government would be ordering the release of more water, rather than ordering the “seizure or destruction” of particular property.

Some companies use different policy language. Kreidler is asking those companies to contact his office immediately to discuss the policy language and how it would be applied to this situation.

He’s also asking all companies to reassure customers about their coverage.

“People buy insurance to protect their families and businesses from exactly this kind of risk,” said Kreidler. “The people who live and work there need to know that their insurance companies stand behind them.”

IMPORTANT NOTE: There is no such exclusion in policies from the National Flood Insurance Program, which is the first stop for most homeowners and businesses seeking flood coverage. But since the NFIP covers a maximum of $500,000 for a building and $500,000 for contents, many businesses below the Howard Hanson Dam have been seeking additional coverage from private insurance companies.

Also, homeowners' policies typically do not include flood coverage. If you live in this area and do not have flood coverage, you should consider getting it immediately. Here's a link to the federal insurance program, with contact info.

Five things never to say to your insurer has put out an interesting list of "Five Things Never to Tell Your Insurer," saying that using certain red-flag phrases could hurt your chances of having a claim approved.

Among them: don't say your basement's "flooded" if the water's coming from, say, a leaking pipe. True floods -- e.g. water from a nearby river inundating your house -- are typically NOT covered by regular homeowner's coverage. A plumbing problem that fills your basement, however, typically is.

Interestingly, the article says that "whiplash" is another word to avoid, since "insurance companies often associate the term with exaggerated or fraudulent claims." Better to describe an injury in medical terms, advises, or to wait until your doctor makes a diagnosis.

Consumer Reports poll on health insurance

In a phone survey of more than 1,000 randomly selected households, Consumer Reports found recently that more than one in four (28 percent) had lost or experienced cutbacks in their health coverage in the past year.

More than one half of those surveyed said they've faced difficult health care choices in the past year, such as not filling a costly prescription, putting off a doctor's visit due to cost, etc.

Here's a link to the results and methodology.

Friday, October 16, 2009

Naches residents' worries turn from huge landslide to flooding

In Naches, where a massive landslide collapsed onto Highway 410 Sunday, residents have a new worry: flooding.

The Yakima Herald-Republic reports that Yakima County officials are asking the Army Corps of Engineers for advice on creating a new river channel, after the landslide buried the normal river channel, damming the flow of water. A temporary road giving residents access could soon be engulfed by rising winter stream flows, potentially cutting off road access to a dozen homes for months. From the story:

Some 12 homes are in the immediate area. Some have water around them now. County Commissioner Mike Leita said those owners are being advised to purchase flood insurance as soon as possible.

Homeowners in the area are also discovering a painful fact about homeowner's coverage: Most policies do not cover earthquakes/landslides or floods. You almost always have to buy separate coverage for those sorts of risks.

That said, it may be possible that their policies do not have such an exclusion or that they bought such coverage years ago and don't remember it. Anyone from the area with questions should first talk to their agent or insurance company regarding the specific coverage in force at the time of the landslide. If they still have questions -- or want to review the language in the policy -- they should call our consumer hotline at 1-800-562-6900 or send an e-mail to our consumer affairs division at

As for flood coverage: Talk to your agent immediately about getting coverage under the National Flood Insurance Program. (If you don't have an agent or broker, call the program directly at 1-888-379-9531.) And do it now -- in most cases it takes 30 days for a new policy to take effect.

We have extensive information about flood coverage, different options, what it covers, etc. on this page of our website.

See how Washington compares on health coverage

The Kaiser Family Foundation recently launched their updated 2008 health coverage data with new numbers from the most recent census. This is a handy site for learning more about how people get coverage and for helping understand who makes up the uninsured.

Their site includes data on how people get coverage and specific details on the uninsured, such as their family work status, their gender, and their ethnicity.

If you’re a visual person, check out their handy map tool. You can compare Washington to the national average and other states on a number of issues, from how many people buy individual health insurance, are on Medicaid or the number of uninsured. Just click through the left hand side of the page to see all of the categories.

Here are some key slides from their new report:

Monday, October 12, 2009

Renter's insurance advice for students and others

The Washington state insurance commissioner's office has put together tips and advice about renter's insurance. (And you won't get a sales pitch. We don't sell insurance; we're the government agency that regulates it.)  Among the topics: do you need renter's insurance, what's it cover, other coverage you can add, etc.

For example, if you're a college student who rents an off-campus apartment or house while away at school, you should think about getting the coverage. It will protect things like your computer, TV, stereo, bike and furniture if they get destroyed, damaged or stolen. Even if you area  dependent under your parents' insurance, your personal property in many cases is not covered if you live off-campus.

And more insurance news: CA flood warning, NY auto data, a "fat tax" in North Carolina and a scandal in N. Dakota

More insurance news today:

-California's Department of Insurance is telling people to get flood insurance if they need it.

-In New York, a new report says that state regulators uphold 1 out of 8 complaints they get about auto insurers.

-In North Carolina -- and accompanied by a photo that will keep you away from the buffet line -- the state government is planning to impose a fee on obese or smoking state employees:

Dubbed the “fat tax,” officials say the higher costs could save $13 million next year.
 -And the Washington Post's Karl Vick reports on the grief that Blue Cross Blue Shield of North Dakota is apparently getting over some of the non-profit's spending:

For the North Dakota insurance sales reps, March may have been the ideal time to enjoy the swim-up bar at a resort on Grand Cayman Island. But back on the northern Plains, where temperatures were below zero, policyholders at Blue Cross Blue Shield of North Dakota were less delighted when they learned about the trip for 66 staff members and guests.

Word of the $238,000 Caribbean retreat broke last winter, compounded by news of other perks: $15 million in executive bonuses over five years, $400,000 for charter flights and $35,000 for a vice president's retirement party. And when the ensuing uproar cost Michael Unhjem his job as chief executive, his landing was softened by a $2.5 million severance payment.

Insurance news: Insurers blast health reform, and "intergenerational strife" in the debate

The news of the day seems to be the insurance industry's assertion that proposed health-care reform will cost people with private insurance more:

The New York Times described the situation as "Insurance Industry Assails Health Legislation." And the Washington Post (via the Tacoma News-Tribune) had this succinct summary in its story:

“After months of collaboration on President Barack Obama’s attempt to overhaul the nation’s health-care system, the insurance industry plans to strike out today against the effort with a report warning that the typical family premium could rise over the next decade by $4,000 more than projected.”
The NYT also had an interesting story revisiting a theme that keeps cropping up in this debate: the fact that the elderly already have a system that, by and large, works for them. Writer Eduardo Porter urges that powerful voting bloc to "Think About the Grandkids," and notes that:
“This political arithmetic led Tyler Cowen, a blogger and professor of economics at George Mason University, to wonder whether the passage of Medicare in 1965 wasn’t a tactical mistake that doomed broader health reform…The share of resources devoted to the old versus the young is a function of their relative political clout.”
Providence Journal columnist Froma Harrup writes about the same issue:
In terms of health coverage, one date separates the most secure Americans from the least secure: a person’s 65th birthday. Age 65 is when one qualifies for Medicare, the government insurance program for the elderly and disabled. It’s become a source of intergenerational strife — not so much between the old and young as between the old and the nearly old."
The Associated Press notes that whatever happens in D.C., the results won't be quick:
“Sixty years is how long Democrats say they’ve been pushing for legislation that provides health care access for all Americans. They’ll have to wait another three if President Barack Obama gets a bill to sign this year.”

Friday, October 9, 2009

Major health insurers doing the right thing on H1N1 flu shots

Our office has been calling on health insurers in Washington to eliminate as many barriers as possible for people looking for H1N1 (swine) flu vaccine and treatment. (We can't rewrite your policy and force the insurers to cover these things if they normally wouldn't, but we can encourage them to cover things, as in this recent letter.)

The good news: Some of the state's major insurers have said that they'll cover the costs associated with the vaccine. Premera says it will waive co-pays and deductibles for the shot, as does Regence. The latter wrote to members:
To remove financial barriers associated with administration of the H1N1 vaccine and to encourage members to seek vaccination, Regence will provide coverage for the costs associated with the administration of the H1N1 vaccine, waiving co-pays and deductibles for all members covered by its insured plans. Regence will strongly encourage self-insured employers to cover the full cost to ensure that the greatest number of people are protected.

Good advice for open enrollment and choosing a health plan at work

Also, New York Times' writer Walecia Konrad has good advice for the millions of workers about to hit "open enrollment" season for their health insurance coverage: Open the envelope and actually read the stuff.

Writes Konrad:
Doing nothing is no longer an option. Many companies insist you fill out open-enrollment forms even if you intend to stay with the same benefits package. What’s more, with so many changes and cost increases on the horizon, you owe it to yourself and your family to take a close look at your options.
 Konrad's NYT colleague Lesley Alderman has a more in-depth story designed to guide you through "the annual task of choosing an insurance plan." Expect to pay more, Alderman writes, for fewer choices, higher deductibles, more questions and a system that steers you toward generic drugs and wellness.

Insurance news: WA 16th in health care, new law covers college students, and "windfall profits" tax on insurers?

The Commonwealth Fund has issued a new study rating health care by state. (Washington comes in 16th.)

The AP (via the Seattle Times) reports on a surprising change from the Congressional Budget Office:
Limits on medical malpractice lawsuits would lead doctors to order up fewer unneeded tests and save taxpayers billions more than previously thought, budget umpires for Congress said Friday in a reversal that puts the issue back in the middle of the health care debate. The latest analysis from the nonpartisan Congressional Budget Office estimates that government health care programs could save $41 billion over ten years if nationwide limits on jury awards for pain and suffering and other similar curbs were enacted. Those savings are nearly ten times greater than CBO estimated just last year.
The AP also reports on a new federal law that will allow college students to take up to a year off from school for medical reasons and to still remain on their family's health insurance plan.

House Democrats, according to this NYT story, are also considering a "windfall profits tax" on insurers:
Speaker Nancy Pelosi said Thursday that House Democrats were considering a "windfall profits tax" on insurance companies to help pay for legislation that would provide coverage to most of the uninsured. The idea, she said, is to capture some of the profits that insurance companies might reap if the government required nearly everyone to have insurance and subsidized premiums for millions of low- and middle-income people.
In Miami, meanwhile, a local insurance agent "has been arrested for the second time in two months for submitting thousands of fraudulent premium finance contracts for fictitious policyholders."

Thursday, October 8, 2009

Insurance news roundup

Seattle Times: CBO figures give health-care bill a big boost: Congressional budget analysts gave an important political boost Wednesday to a Senate panel's health-care overhaul, projecting that the $829 billion measure would both dramatically shrink the ranks of the uninsured and keep President Obama's pledge that doing so would not add "one dime" to federal budget deficits.

Detroit Free Press: Credit Scores Studied As Factor for Insurance Premiums

Time magazine: Will States Get Too Much Power?

Casualty Actuarial Society: Medical Malpractice Market Appears to have Stabilized, but Emerging Issues Pose New Challenges (a couple weeks old, but worthwhile reading)

WSJ: BlackRock Up for Role Rating Risk at Insurers

Tuesday, October 6, 2009

WA insurance commissioner's office to lawmakers: Preserve strong state regulatory role in whatever health reforms emerge

Barbara Flye, the senior health policy advisor for Washington's insurance commissioner's office, spoke recently before a state senate committee. Among her points: That health-insurance reforms should retain a strong tradition of state-by-state regulatory authority to ensure that things run smoothly. Here's a clip:

Civil-rights groups launch health insurance reform ads

More in the debate on health insurance reform: A coalition of civil rights groups is trying to mobilize African-American and Latino voters with TV ads in key states. Here's an example:

News re: Green River flood threat update

The Associated Press reports that work to strengthen a reservoir wall has reduced the threat of catastrophic flooding in the Green River Valley this winter from an earlier estimate of 1 in 3 to about 1 in 4.

Also: the Washington Military Department's Emergency Management Division, meanwhile, has put up several flood-related pages, which they're updating frequently.
-A main page with a map of the area
-An extensive page with background on flooding and flood insurance
-A very good page with "myths and facts about the National Flood Insurance Program." (For example, it's NOT true that the program won't cover anything in a basement. NFIP insurance will cover many things down there, such as furnaces, water heaters, sump pumps, stairways, some drywall, cleanup, and washers and dryers among other things.
-and a page and links to home-protection info, including sandbagging and how to protect a home from sewer system backups during a flood.

Reading with your morning coffee...

U.S. Losing Ground on Preventable Deaths: The Washington Post's Ceci Connolly reports on a new study:

Although the United States now spends $2.4 trillion a year on medical care -- vastly more per capita than comparable countries -- the nation ranks near the bottom on premature deaths caused by illnesses such as diabetes, epilepsy, stroke, influenza, ulcers and pneumonia, according to research by the nonpartisan Commonwealth Fund published in the journal Health Affairs.
  White House lobbies for Public Plan in Final Bill (Seattle Times)
Democrats Try to Balance Cost and Coverage in Health Plan (also in the Seattle Times)

Health Insurance Exchanges: Will They Work? (NYT)
Counterpoint: How a Mandate Could Cost Employees Their Company Insurance (NYT)

What's Missing From Health Care Reform (Forbes)

Monday, October 5, 2009

Ohio warns of check scam...

Ohio's Department of Insurance is trying to spread the word about an international check scam that's issuing fake checks that seem to be from big-name insurance companies, including Nationwide.

Here's how it works: You get a letter with what looks like a $4,500 check from a reputable company. The letter congratulates you and says you've won $150,000 in a contest. You need only pay off the "non-resident government tax" to a British tax officer. You're told to cash the check and then wire most of the money to an address in the U.K. And to tell no one.

You can guess the rest. The wired money's gone, the bogus check doesn't cash, and of course there is no $150k waiting for you in some British shopping contest that you never entered.

Our investigators say that we haven't run into this one yet, but that it's just another variation on ever-popular "advance fee fraud," also known as the Nigerian scam, which in various forms dates back to at least the 1920s.

If you're looking for a smaller jackpot, however, punch your name into Washington state's unclaimed property site, run by the state's Department of Revenue. If you forgot an insurance deposit, last paycheck, utility deposit or bank safe deposit box, that's where all those things end up. The state-run site is legitimate. In fact, one of the biggest problems that the unclaimed property folks run into is trying to return money to skeptical residents who think it's some kind of scam.

(Never lived in Washington? Click here for other state's unclaimed property websites.)

What's the petition filed to liquidate Penn Treaty mean in Washington?

The Pennsylvania Insurance Department filed petitions on Oct. 2 to liquidate both Penn Treaty Network America and its subsidiary, American Network. Pennsylvania Insurance Commissioner Joel Ario said that based on his office's analysis, the companies "do not have the ability to pay future claims without significant rate increases that would have to be requested and approved in all 50 states."

Together, the companies provide long-term care insurance to more than 120,000 policyholders in all states and the District of Columbia.

Washington state has about 3,700 Penn Treaty policyholders and no known American Network policyholders.

Ario's office says that if the court approves the petition, any active long-term care policies "will not be canceled, except by the policyholder" and will instead be transitioned to state guaranty funds, which cover policyholder claims up to coverage, which varies by state.
The details are spelled out in the liquidation petition memos (Here's Penn Treaty's, and here's American Network's). Penn Treaty's, for example, says that further efforts to rehabilitate the company's finances "would substantially increase the risk of loss to policyholders" and would, in fact, "be futile."
Here in Washington, we put up this web page to talk about the effects on Washington policyholders, how the liquidation process works, and what policyholders can do.

Why not to throw water on a cooking oil fire...

This video, which we noticed via State Farm's Twitter feed, illustrates pretty graphically why it's a very bad idea to try to put out a kitchen grease fire by throwing water on it.

The video recommends snuffing out a pan fire by soaking a wet towel, wringing it out, and then laying it on top of the pan. And this apparently works, as you'll see in the video. As State Farm noted, many firefighters recommend a simpler move: covering the burning pan with a lid.

The key lesson of the video, however is this: DO NOT THROW WATER on an oil fire.

Happy Fire Safety Week.

With large-value flood insurance scarce in the Green River Valley, OIC considers revisiting joint underwriting association legislation...

As businesses in the Green River Valley find it very hard indeed to find coverage above the $500,000 building/$500,000 contents maximum for federal flood insurance, our office is considering revisiting a proposal that would have given us broader powers to help.

In 2003, the insurance commissioner’s office asked the state Legislature for broader powers to create “joint underwriting associations” in cases where coverage effectively disappears. More than two dozen states have comprehensive JUA laws.

Here’s how they work: When coverage dries up, such laws allow the insurance commissioner to intervene and order insurers to band together to provide start-up financing and guarantee solvency for a joint underwriting association. The JUA then functions as a not-for-profit insurer of last resort. The coverage may be expensive, but at least it will be available. (Mostly, that is. Such associations can refuse to cover the very few applicants who present extraordinary risks.)

As things stand now, state law requires that the insurance commissioner get approval from the state legislature before establishing such an association. The 2003 legislation – House Bill 1582 – would have allowed the Office of the Insurance Commissioner to move ahead, under certain conditions, to directly order creation of such groups.

Insurers in 2003 opposed the bill, which died in committee. But with business owners struggling to find coverage in the Green River Valley and many millions of dollars in uninsured property in the potential flooding area, it may be time to revisit the issue.

(Note: I modified this post to clarify and describe a bit more about how JUAs work.)

Friday, October 2, 2009

Update on flood insurance problems in Green River Valley: A few companies reportedly selling coverage

Businesses below the weakened Howard Hanson dam, as we’ve written, are finding it difficult to find insurance above the federal flood insurance limits ($500k building, $500k contents). The Green River Valley area below the dam includes many businesses worth far more than that.

In such cases, we’ve been urging people to get the maximum federal coverage, then talk to their agents and brokers about so-called “surplus lines” coverage for the rest of the property value. But the Army Corps of Engineers has said it may have to spill extra water this rainy season to avoid stressing a weakened abutment adjacent to the dam. Not surprisingly, private flood coverage has largely dried up in the region as a result. Our office has also received reports of flood policies in the area being canceled recently.

A few brokers are reportedly still writing flood policies in the area, although it’s likely to be expensive. The Surplus Line Association of Washington is asking its members to notify the association of anyone with flood coverage available in the area, and has started listing the results on its website. There are two brokers listed on the website as I write this, just after 4 p.m. on Friday.

“This is an opportunity for the Surplus Lines Community to shine and help our region at a time when there is limited availability,” association manager Bob Hope wrote in an email to members Tuesday.

Thursday, October 1, 2009

The uninsured in WA: excerpt from state House testimony

Barb Flye, senior health policy advisor to Washington Insurance Commissioner Mike Kreidler, testifed yesterday before the House Ways & Means committee. The topic: States' roles in health care reform. Here's a short excerpt that lays out the problem: the number of uninsured people in Washington state is on track to soon hit 1 million: