Insurelane Insurance Blog

Florida’s top insurance regulator has taken aim at Universal Health Care’s popular “Any, Any, Any” Medicare plan, claiming the plan doesn’t have a large enough budget surplus to meet its financial obligations.

Universal missed a March 23rd deadline to come up with an extra $160 million in cash reserves. The following day, Florida Insurance Commissioner Kevin McCarty recommended beginning delinquency proceedings against the company.

Universal — who has been in business since 2002 — introduced the “Any, Any, Any” Medicare Advantage plan in January. The plan was rolled out in 7 states, and far more people enrolled than were expected. With all the additional enrollment, state regulators began to suspect that Universal didn’t have the resources to pay all it’s members claims. Universal stopped accepting new members in mid-February.

Universal’s CEO, Dr. Akshay Desai, said that a judge’s ruling gives them 60 days before delinquency proceedings can begin. Universal had asked a judge to issue an injunction blocking the liquidation of the company. Judge Thomas H. Bateman III denied the motion, but allowed Universal to move forward with its demand that the state “show cause” for the company’s liquidation.

Said Universal spokesperson Bob O’Malley: “All the talk on the (Office of Insurance Regulation’s) part about insolvency is improper because it is based on disputable calculations. We get $90-million per month from the federal government from which we pay claims. We’re a financially stable and secure company.”

The “Any, Any, Any” plan featured the choice of any healthcare provider, no additional plan premiums, and no prescription drug premium. In some locations, the plan actually contributed $93.50 to the beneficiary’s Medicare Part B premiums.

Medicare Advantage plans act as supplements for traditional Medicare coverage. Under Medicare Advantage, plan members continue to pay their Medicare Part B premiums, and may pay an additional premium for the supplemental coverage provided by their Advantage plan.

If the “Any, Any, Any” plan is liquidated by the state, plan members will have the option of switching to a different Medicare Advantage plan or returning to traditional Medicare coverage.

“The important thing is that members are going to have a number of options and choices,” said Centers for Medicare and Medicaid Services spokesperson Lee Millman. “They are not ever going to lose their coverage.”

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Allstate has agreed to review almost 4,000 homeowners insurance policies it canceled last year in Louisiana.

At the end of last year, Allstate reviewed 40,000 homes in Louisiana with “drive-by” inspections — sending out roughly 4,000 policy cancellation notices because the homes were determined abandoned. The drive-by checks lasted only seconds, and some inaccurately determined the real status of a home.

Jim Donelon, the state’s Insurance Commissioner, received hundreds of complaints claiming they did not abandon their houses and had their policies unfairly cancelled.

Allstate has agreed to review the cancelled policies and will reinstate them if residents can prove they want to live in their homes.

“These customers will now have until April 30 to notify Allstate of their desire to have their policies reinstated,” said Michael Siemienas, a spokesman for Allstate.

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Republican Senator Larry Craig of Idaho wants insurance payouts for injured veterans to be issued faster. Currently, it takes an average of 55 days for a veteran to receive an insurance payout.

Two years ago, Congress created an insurance program for injured veterans through the Department of Veterans Affairs. The policy, called traumatic injury insurance, provides payments to veterans who suffer from life-changing injuries.

In the program’s short history, over 3,000 veterans have been compensated for injuries to help them and their families through recovery and rehabilitation. The payouts range from $25,000 to $100,000, depending on the injury.

“Out of terrible tragedy, this is at least some good news for those who are injured and their families. That money is helping them cope during a time of incredible personal challenges,” said Senator Craig.

The nearly 2 month delay for payment is because injuries must be approved in a 3-step process by service members, medical experts, and service officials — who then have to complete an 8-step application form. Payment is finally received around 4 days after the entire process is completed.

Craig is proud of the program’s success, but thinks it can improve. He wants Veterans Affairs to “see how they can speed up the process.”

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A bipartisan group of legislators in the U.S. House of Representatives designed a bill to expand and improve the National Flood Insurance Program (NFIP), which provides affordable insurance coverage for Americans living in flood risk areas.

The bill would raise the NFIP’s funding by almost $1 billion, and would increase the maximum coverage payouts for insurance claims. It also aims to address many of the NFIP’s current weaknesses.

Currently, the NFIP provides $250,000 in coverage for a home’s structure, $100,000 for the home’s contents, and $500,000 for commercial buildings. The new legislation bumps up coverage maximums to $335,000, $135,000, and $670,000, respectively.

The maximum payout increase is meant to update NFIP coverage to today’s market prices.

The legislation will also increase fines for lenders not enforcing federally mandatory flood insurance regulations. All homeowners who live in floodplains or have federal mortgages are required to have flood insurance.

“Congress must act now to modernize this important safety net for homeowners,” said Republican Representative Judy Biggert of Illinois, the ranking member of the House Financial Services Subcommittee on Housing and Community Opportunity.

“The 2005 Gulf Coast hurricanes showed the nation how important the National Flood Insurance Program is to the average homeowner… The program needs to provide a financial safeguard for homeowners while protecting the interests of taxpayers,” Biggert added.

The bill is co-sponsored by Democratic Representative Barney Frank of Massachusetts.

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Colorado’s House of Representatives is expected to introduce legislation to roll back a law that allows insurance companies to set small group insurance rates based on members’ health.

Currently, companies selling small business health insurance are able to charge higher plan rates based on age, location, industry, existing medical conditions, and claims history of their members. The law only applies to businesses with less than 50 employees.

Supporters of the new bill say small businesses and employees are hurt with unfairly high insurance premiums because of this law.

“[The goal is to] make health insurance for small business more affordable and more easily accessible,” said State Representative Tom Massey. “We hope to increase coverage.”

The measure is facing strong opposition from the insurance industry. They argue the roll back will decrease competition in Colorado, leading to higher rates in the long run.

Industry representatives also point out there is a provision in the current law offering discounted rates for healthier members. If the new legislation is passed, the discounts will be taken away. One study done by the Colorado Association of Health Plans found twice as many small businesses benefit from the current law then are hurt.

But lawmakers still contend that the higher set rates are making health coverage too expensive.

“We think it will be very beneficial for small businesses in Colorado. And long term, it will benefit Colorado’s economy,” said Massey.

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Financial giant ING has a new product on the market: Return of Premium Term Life Insurance. Issued by ReliaStar Life Insurance Company, the policies are available with 15, 20 or 30 year terms. If the policy is surrendered before the term is over, the premiums paid for it will be returned.

“This type of term insurance appeals to people who are concerned about buying a product they think they may never need,” said Jim Gelder, the president of ING Life Distribution. “At the end of the level term period, they get back what they've paid for the policy.”

Since the benefits of term life insurance expire after a certain period, it‘s generally much cheaper than permanent life insurance. By adding a return of premium feature, ING has made term life more attractive — not only to offer protection for families and loved ones, but to use as a financial tool as well.

“In addition to the death benefit protection, return of premium term life insurance can serve as a vehicle for college financing, mortgage funding, business planning or a variety of other purposes,” said Gelder.

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Blue Cross Blue Shield members in Michigan will soon see an increase in their health insurance premiums. Michigan’s Office of Financial and Insurance Services approved a rate increase after the state’s largest health insurance company cited losses in their individual health insurance line.

The adjustment affects 60,000 BCBS members with individual health plans. The increase goes into effect May 1, 2007. Policyholders with group plans will not be affected.

“We sympathize with our members who purchase insurance on their own and face higher premiums as the result of rising medical costs,” said BCBS spokesperson, Helen Stojic. “But the fact is that the premiums we collect for these health-plan options are far below the cost of the medical service delivered.”

Depending on the plan, premiums will go up from 4% to 25%.

Under Michigan law, Blue Cross Blue Shield is the “insurer of last resort,” and required to accept any applicant — regardless of their health status or medical history.

“This differentiates us from for-profit insurers, who cherry-pick young and healthy people and often turn away people whose medical conditions make them too high a risk in the eye of the for-profit insurer,” Stojic said.

“The rates bring the premiums closer to the actual cost of care provided, but not all the way,” she added.

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Philadelphia-based Independence Blue Cross has announced it will extend it’s “No Pay Copay” generic drug promotion until the end of 2007. The promotion gives Independence members free prescriptions and refills on generic drugs. The promotion was originally scheduled to last until the end of March.

Independence Blue Cross hopes the promotion will increase awareness and use of generic drugs, saving money for both the company and its members.

“Our members have responded very positively to our No Pay Copay promotion,” said Independence Blue Cross president and CEO Joseph A. Frick. “In just a few months, we’ve seen a five percent increase in the use of generic drugs. By extending the program through the year, and expanding it to include even more members, we hope that those who are already using generics will stay with them to continue to save on their prescription drug costs, and others who have yet to switch to generics will consider making the change.”

According to the Congressional Budget Office, a Federal agency that reviews budgets and legislative initiatives, healthcare consumers save as much as $10 billion a year buy using generic drugs instead of their brand-name equivalents.

“Generic drugs are much less expensive, and if they meet the clinical needs, then everybody wins,” said Blue Cross pharmacy vice president Paul Ulrick.

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The Ohio General Assembly has introduced legislation aimed at simplifying the relationship between healthcare providers and insurance companies.

Under provisions of the new bill, insurance companies will be required to have an online system of up-to-date enrollee information that’s easily accessible by doctors. It would also make an online database of all doctors’ credentials available to the healthcare industry. This would cut down on administrative work, and make it easier to approve doctors to practice in new networks.

Another goal of the measure is to sort out insurer’s reimbursement policies to care providers. A summary and disclosure will be required for every provider-payer contract. All fee schedules, payment policies, and categories of coverage must also be well clarified for doctors, hospitals, and other care providers.

“It frees up more time to commit resources for patient care and not so much toward the administration side,’ said the bill's main sponsor, Republican State Senator Kevin Coughlin.

The bill is a bipartisan effort to make the Ohio healthcare system more efficient and to save money for statewide healthcare costs. It can also make it easier for the patient, enabling the doctor to easily clarify which medical care procedures are covered under their health plan.

“Everything that we can do to reduce healthcare costs goes a long way,” Coughlin added.

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Non-partisan advocacy group Consumers for Health Care Choices has sent a letter to U.S. Attorney General Alberto Gonzalez, calling on the Department of Justice to block the sale of Nevada’s Sierra Health Services to UnitedHealth Group. According to the advocacy group, the sale will limit patient choice for healthcare consumers in Nevada.

The American Medical Association has also issued a statement against the sale of Sierra, claiming that the result would be create an anti-competitive market for healthcare in Nevada.

“The proposed merger would have negative long-term consequences for patients, physicians, hospitals and employers,” said Dr. J. James Rohack, an AMA Board Member.

According to the AMA, the sale of Sierra would give UnitedHealth Group control of 78% of the HMO market in Nevada, and 95% of the HMO market in the greater Las Vegas metropolitan area.

“United’s near-monopoly in the HMO insurance market will deter competition and deny patients and employers a choice among HMO plans,” said Dr. Rohack.

UnitedHealth Group agreed earlier this month to buy Sierra Health Services for $2.6 billion. UnitedHealth Group currently owns several health services businesses, including insurance companies UnitedHealthcare, Golden Rule, and PacifiCare. Together, the UnitedHealth Group’s insurance plans cover over 18 million people.

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Almost 8,400,000 Americans had their identities stolen last year. U.S. businesses spent over $49,000,000,000 dealing with identity theft. Now the insurance industry is stepping up to do what they do best: offer protection.

Many of the leading insurers — including Travelers, Allstate, and MetLife — are offering identity theft insurance. Premiums are cheap, often falling in the $50 – $70 range. And the policies offer upwards of $20,000 in coverage.

If you’re in the market for identity theft insurance, look for a policy with no deductible. The average cost of resolving identity theft problems is $535, so “(if) the deductible is $1,000 it doesn't really make sense,” as Jay Foley of the Identity Theft Resource Center points out.

When browsing online, take care to only share your information with trustworthy companies. Don’t give out your Social Security number. And remember that most reputable companies will never ask you to share your account information or password in an email.

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Lawmakers in the U.S. House of Representatives proposed legislation to create a Federally funded program to help insurance companies in case of a catastrophic disaster. The push for this legislation was sparked by the increasing insurance problem that states in the Gulf and southern Atlantic coastal regions are facing.

Insurers in the area continue to drop policies and increase premiums as experts predict more frequent and severe hurricanes in the future.

“It is clear that the government has got to step in,” said U.S. Democratic Representative Barney Frank of Massachusetts.

The Federal ‘insurance backstop’ for natural disasters would use the terrorism fund created after the September 11 attacks as a model. The terrorism insurance program provides up to $100 billion in coverage for a future attack.

“We believe that we have reached a similar point with regard to what happens with floods and hurricanes. I believe that some Federal backstop is necessary,” Frank added.

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A recent software upgrade at the U.S. Census Bureau turned up a some welcome news: the number of Americans without health insurance is less than previously thought. It turns out the Census Bureau had overstated the number of Americans without insurance by nearly 2 million people.

In 2005, the Census Bureau measured that there were 46.6 million uninsured Americans, when the actual number was 44.8 million. Now that the software glitch has been discovered, they’ve acknowledged that their numbers of uninsured have been inflated for at least 10 years.

The most recent population survey counted around 1.8 million Americans as “not covered” even though they reported having health insurance. The survey tabulates income, employment, and health insurance coverage data. No one is certain what caused the software error, and he Census Bureau has said no other questions were affected by it.

They’ve reissued the numbers for 2004 and 2005 and will also correct their data back until 1995.

“We are committed to ensuring that the nation has the most accurate numbers we can provide in a timely manner,” said Howard Hogan, Census Bureau associate director for demographic programs.

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The Oregon House of Representatives and the Senate have passed a healthcare bill to cover almost all of the state’s teachers under one state insurance agency. The agency will be overseen by a newly-created Oregon Educator Benefits Board — similar to the board that currently runs state employees’ health coverage.

The bill is set to go to Governor Ted Kulongoski, who’s expected to sign it into law. Kulongoski has been a long-time supporter of consolidating teachers’ health insurance into one agency.

“For more than 4 years, I have worked to enact responsible cost savings in our schools wherever possible — and put those savings back into the classroom. [This bill is] another important milestone,” said Kulongoski.

The bill is predicted to save $270 million for taxpayers in the next 5 years, freeing more funds to put into the school system.

Those who opposed the bill contend the state will monopolize teachers’ health insurance and won’t guarantee long-term savings.

But because healthcare costs for the state are expected to rise, lawmakers insist this bill is the right action.

“We all know that the crisis of rising health care costs will not go away — especially if we do nothing. The Legislature has the opportunity to do something now. Oregon taxpayers want their elected leaders to be good stewards of their tax dollars,” wrote Democratic State Senator Vicki Walker in an editorial.

“They want us to be accountable, save money when possible, and ensure that every child has access to a quality education. [This legislation] does just that,” she added.

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Generic drugs are often lauded as a way to make healthcare more affordable. But in some instances, the savings they offer is minimal. A recent Wall Street Journal article highlights the shortcomings of generics.

Large insurance companies have been successful in getting cheap generics for their members. But people who pay cash for their prescriptions may not have as much luck.

“We're not seeing that sharp a drop-off” in generic drug prices, according to Jim Yocum of the pharmacy data and software company DestinationRx Inc. “We're just not seeing it.”

The price paid for generic drugs often depends on where they are bought.

For example: on the website for national pharmacy chain CVS, 30 tablets of 20-milligram Zocor was selling for $154.99. The same dose of the generic version, simvastatin, was selling $108.99. By contrast, at the large warehouse retailer Sam’s Club, 30 tablets of 20-milligram simvastatin cost just $6.97.

Pharmacy representatives pointed out that they operate on different business models than large warehouse retailers such as Sam’s Club and Costco.

“We don't sell snow tires,” CVS spokesman Mike DeAngelis. “The core of our business is the pharmacy.”

Mr. DeAngelis did confirm that CVS makes a higher profit margin on generic drugs than on brand-name drugs.

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