Insurelane Insurance Blog

Colorado’s largest auto insurance company, State Farm, will reduce premiums an average of 7.2%. The rate reduction will be effective on July 16, marking an overall premium cut of 40% in the last 4 years.

In 2003, Colorado did away with their no-fault auto insurance system. Most insurance carriers were pleased with the change, as many no-fault systems require insurers to provide as much as $10,000 in personal injury protection.

The biggest criticism of no-fault auto insurance fraud is widespread fraud. A common practice to exploit the no-fault system is to fake car accidents and injuries. Some clinics even hire people to stage accidents and then bill insurance companies for medical care they didn’t provide.

Now that the no-fault system is gone, State Farm and other insurers have been able to reduce monthly premiums, saving Colorado drivers more than $319 million annually.

“State Farm has very aggressively reduced rates in the four years since the change in Colorado’s auto insurance system,” said State Farm vice president of operations, Ken Cook. “The old system had clear cases of abuse and costs were out of control.“

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A poll of 400 Massachusetts residents conducted by Suffolk University and WHDH-TV suggests that residents are polarized in their view of the first health insurance mandate in America.

The poll measured the number of residents who were aware of the new law. 9 out of 10 residents knew of the healthcare law. Among those polled, 49% said people shouldn’t have to buy health insurance if they don’t want to, while 42% said everyone should be required to get coverage.

Even though the residents polled were generally split on the question of mandatory health insurance, most agreed (92%) that everyone should have the right to healthcare.

The new law does help residents with lower incomes. Anyone below the federal poverty line will get free health insurance, and people making up to 3 times the poverty level will get subsidized coverage. According to the U.S. Census Bureau, the poverty level is $10,488 for an individual and $20,444 for a family of four.

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Federal funding for State’s Children’s Health Insurance Programs (SCHIP) started to run out in early 2007, and many states were forced to slow or stop enrolling children in health insurance coverage.

Georgia’s SCHIP program PeachCare — which provides health insurance for approximately 274,000 children — faced their budget shortfall in March. They were forced to put a freeze on the program, and some 16,000 new applications for coverage went on hold.

Even though federal funding has stopped, Georgia’s Board of Community Health voted unanimously to use emergency funds to extend coverage to 20,000 more children. Starting July 12, PeachCare will temporarily re-open enrollment.

The money for PeachCare’s extension will only last until the end of September, when SCHIP expires completely. U.S. Congress will then have to re-authorize funding for the program.

If SCHIP is re-authorized, PeachCare may be able to expand coverage to more than 295,000 children.

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University General, a Texas hospital based in Houston, will launch a mobile health-screening coach to deliver care to people without health insurance.

The health coach will seek out uninsured residents who can’t afford private health plans and aren’t eligible for state-sponsored health programs such as Medicaid. Treating children’s and senior citizens will be the program’s priority.

The effort will be conducted by the Community of Health and Hope, a new non-profit subsidiary of University General.

“We want to help the communities University General Hospital System is going into,” said Gina Stinson, executive director of the Community of Health & Hope.

Houston is the first city on the list. Starting in August, the health coach will provide their mobile care in 4 zip codes. They hope to expand into 19 more.

The team inside the health-mobile will include a doctor, a nurse, and a receptionist. The coach itself is a 40-foot vehicle with 2 exam rooms, a bathroom, an X-ray set-up, and basic lab equipment.

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Democratic presidential hopeful and former North Carolina Senator John Edwards laid out the details of his universal healthcare proposal in a campaign trip to Detroit, Michigan.

Edwards explained that his universal healthcare plan would cost between $90 and $120 billion annually. He would fund the plan, in part, by repealing President Bush’s tax cuts for people with incomes of over $200,000.

Employers would also help fund the program by paying a tax equal to 6% of their payrolls if they don’t provide health insurance for their employees.

To reduce prescription drug prices, Edwards will ban long-term patents for pharmaceutical companies who develop new medications. By providing cash incentives for other companies to produce the new drugs, Edwards hopes to introduce more competition and bring down prices.

Edwards also addressed the healthcare problems of the Big Three auto companies in Detroit. Ford, General Motors, and Chrysler spend billions of dollars per year for their employees’ and retirees’ health coverage.

“Here in Detroit, the cost of health care is particularly crippling for business,” said Edwards at Detroit’s Riverside Health Center. “These businesses and their unions made a promise to workers, and now it’s time for the government to hold up its end of the bargain and lower health care costs.”

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The State’s Children’s Health Insurance Program (SCHIP) was created by Congress in 1997 to provide healthcare to uninsured children. When it was passed, legislators gave the program 10 years of funding.

Now that the money is starting to run out for the hugely successful SCHIP programs across the country, the Senate Finance Committee will soon meet to reauthorize and refund it.

Federal, state, and executive lawmakers agree SCHIP should keep going, but there’s no consensus on how much funding it should receive.

Many state lawmakers, state Governors in particular, want more funding for SCHIP to expand coverage to more children, more families, and to children of legal aliens. They also want to repeal a provision that denies SCHIP coverage for state employees.

But the Bush administration has made it clear they want to bring SCHIP back to its original course, exclusively covering uninsured children with incomes only up to 200% of the federal poverty level.

Most states disagree. They want SCHIP extended to more people with higher incomes.

“It is my goal to cover every uninsured child in California under 300% of the federal poverty limit using SCHIP funds,” wrote Governor Arnold Schwarzenegger in a letter to the Finance Committee.

Proponents of reducing the maximum income level for SCHIP eligibility, such as the Bush administration, contend higher maximums gives families a disincentive to find private coverage. They predict it would hurt the competitive market.

On the other hand, private health insurance prices are skyrocketing. Many Americans with higher incomes still can’t afford private coverage. That’s why states such as New Jersey want to expand SCHIP for families up to 350% of the poverty level.

“In New Jersey, with the high cost of living, certainly these are not rich families,” said director of New Jersey’s SCHIP program, Ann C. Kohler.

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On October 1, 2007, the 30-year-old no-fault insurance law in Florida will expire unless lawmakers take action to extend the deadline. But with Florida’s property-tax law issue pressing, no-fault insurance is not likely to make it on the congressional floor.

Because of the heated debate surrounding it, many observers are surprised that the no-fault law isn’t a higher priority for lawmakers.

Those who want the no-fault law to end include consumer advocate groups such as Floridians for Lower Insurance Costs. They believe when the no-fault law expires insurance rates will be reduced because of a reduced number of fraudulent claims.

Insurance fraud has plagued the no-fault system since its creation. Many clinics exploit the $10,000 of guaranteed personal injury protection. Some clinics are known for hiring people to stage car accidents, and then billing insurance companies for medical care that didn’t occur.

Without the no-fault law, insurance companies won’t have to offset fraud costs with higher rates. Florida’s largest auto insurer, State Farm, offered a rate reduction of 16% if the law were allowed to expire. State Farm has been lobbying for repeal of the no-fault law for several years.

Others see the expiration of the no-fault law as a catalyst for increased auto rates and even higher health insurance premiums. Critics contend Florida will see a significant jump in drivers on the road without auto insurance.

Bill Newton, president of the Florida Consumer Action Network, predicts the auto premiums that were used for the $10,000 in personal injury protection will pay for uninsured motorist coverage and liability suits instead.

“If you think your insurance is going down 16 percent, you’re dreaming,” Newton said.

If lawmakers were to address the no fault-law before the expiration date, the major insurance industry players would have to come to a compromise, commented State Senator Bill Posey.

Proponents of the no-fault law would rather see a crackdown on fraud, rather than an end to no-fault coverage.

“It’s not unmanageable, and no one has really tried,“ said director of the Association of Independent Health Care Providers, Dr. Steven Greenberg. “You don’t just hit [the no-fault law] with a big hammer and kill it. There is fraud in banking, but you don’t see us closing all the banks.”

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California Insurance Commissioner Steve Poizner has extended the California Low Cost Automobile Insurance Program (CLCA) to an additional 10 counties. The CLCA program was created in 1999 and provides auto insurance coverage for low-income residents.

Annual premiums for auto coverage in the CLCA program are less than $400.

To qualify for coverage, drivers must have no more than one at-fault accident and no more than one point on their license in the last 3 years. They also cannot have an income more than 250% of the federal poverty level.

Currently, the CLCA program offers low-cost auto coverage in Alameda, Contra Costa, Fresno, Imperial, Kern, Los Angeles, Merced, Monterey, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Barbara, Santa Clara, Sonoma, Stanislaus, Tulare, and Ventura counties.

The counties to be added include: Santa Cruz, Solano, Marin, Madera, Placer, Napa, Yolo, Mendocino, Kings and Lake.

Said the commissioner: “More than 3 million motorists travel California's roads without auto insurance. This is a recipe for disaster. This program is an affordable option for qualified low income drivers. I hope to expand the program to every county in California.”

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Everyone knows hospital bills are expensive. But you (or your insurance company) are paying for top-notch healthcare. At least, that’s what everyone thought.

But a new study by the Pennsylvania state government is raising doubts. They surveyed 60 hospitals in the state that performed heart bypass surgery, comparing average cost with patients’ lengths of stay and death rates. The results? You don’t always get what you pay for.

On average, the most expensive hospitals charged $100,000 for the surgery. The least expensive hospitals charged an average of $20,000. The death rates and the amount of time spent in hospital recuperating were roughly the same for both.

Even more disturbing: 2 of the most expensive hospitals in the Philadelphia area had death rates that were surprisingly high.

“For most consumers, the fact that there is no connection between quality and cost is one of the dirty secrets of medicine,” said Peter V. Lee, of the Pacific Business Group on Health.

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Karen Ignagni, president and CEO of America’s Health Insurance Plans, recently released a statement on the future of healthcare in America.

Saying that reforming the American healthcare system should be “the nation’s top domestic priority,” Ignagni went on to criticize reform proposals that are entirely government-sponsored.

“The American people do not support turning the health care system over to politicians in Washington. Rather than engaging in a polarizing debate that leads nowhere, the country should get serious about enacting solutions that will work,” she said.

Ignagni cited the recent proposals in California as a potential model for reform. “[AHIP members] are participating in that discussion and we hope it will lead to real progress for working families.”

The proposals being debated in California would expand the market for individual and family health insurance, while providing more government funding for people who can’t afford coverage.

America’s Health Insurance Plans is a trade association representing almost 1,300 insurance companies. Collectively, the members of AHIP provide coverage to over 200 million Americans.

Karen Ignagni is the president and CEO of AHIP. Prior to her role there, she was the director of the Department of Employee Benefits at major labor union AFL-CIO. She has also served as a staff member of the U.S. Senate Labor and Human Resources Committee.

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A recent New York Times article points out a new trend in group health coverage — employers setting “wellness goals” for their employees. A healthier workforce means lower insurance premiums, and employers are willing to try nearly anything to keep their costs down.

At Intuit, a California software company, employees are paid $100 to take a medical questionnaire. The questionnaire is designed to catch potential health problems and point employees toward solutions.

Another company, BB&T Corporation, gives workers a 20% discount on their insurance premiums for answering a questionnaire, providing a blood sample, and taking a fitness test. Employees with potential health problems are assigned a nurse who helps set health and fitness goals.

Some experts see this as step in the right direction for American healthcare. They argue that the American healthcare system has traditionally placed too much emphasis on treating health problems rather than preventing those problems in the first place.

However, others are raising privacy concerns as employers take a more active role in their workers’ health. Current U.S. laws, including the Health Insurance Portability and Accountability Act and the Americans with Disabilities Act prohibit employers from having access to specific health information about individual employees. Even so, privacy advocates worry that such data could be used inappropriately when managers decide which employees deserve to be promoted and which should be laid off.

Advocates of “Workforce Wellness” dismiss these concerns.

“While anything is possible, there are already a fair number of protections in these laws to try to protect employees,” said Andrea I. O’Brien, a Washington lawyer who specializes in employee benefits.

“There's nothing helpful for us in knowing it,” said Steve Reeder, benefits manager at BB&T. “We certainly don’t want managers to know that information and making bad decisions based on that information.”

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The South Carolina House of Representatives approved a bill to give insurance companies an incentive to stay in the state while reducing premiums.

This measure would provide sales and income tax breaks for residents who improve their home’s structure to better withstand tropical storms — including storm shutters and other hurricane-resistant home improvements.

Residents will also be able to apply for government grants — up to $5,000 — to help pay for the improvements. And insurers would be required to reward policyholders who make storm-resistant upgrades with substantial discounts, reported the Associated Press.

The bill would also create hurricane savings accounts allowing homeowners to save tax-deductible money to help with insurance deductibles. It mirrors the popular Health Savings Account, where people can save tax-free money for their healthcare costs.

Governor Mark Sanford supports the bill and added tax incentives for the insurance companies, as well. Tax credits would be given to insurers who write full coverage policies for homeowners on the coast. To receive credits, cancellation notices must also be issued 60 days prior to the policy end date, rather than 30 days.

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After universal healthcare promises and criticism for not providing a detailed plan, Democratic presidential candidate Barack Obama revealed his proposal for universal healthcare in America.

The plan allows every American to get private health insurance. It will create a National Health Insurance Exchange to monitor the coverage and rates of insurance providers. Insurance companies would not be allowed to deny coverage to people with pre-existing conditions.

Those who can’t afford private coverage will be given subsidies on a sliding scale based on income, reported the Associated Press.

Obama’s plan also requires businesses to provide health insurance for their employees or at least share the cost of coverage. He said the coverage would be similar to the health insurance plan for the members of Congress.

“My plan begins by covering every American. If you already have health insurance, the only thing that will change for you under this plan is that the amount of money you will spend on premiums will be less,” said Obama in Iowa City.

“If you are one of 45 million Americans who don’t have health insurance, you will after this plan becomes law,” he added.

Because it’s inevitable people will need care for catastrophic accidents, terminal illnesses, and other serious conditions, Obama’s plan will create a reinsurance pool to reduce risk for insurance companies. And the plan will focus on disease prevention and better management of chronic health conditions.

But Obama knows the cost of any universal healthcare plan will be expensive to implement onto the American system.

“To help pay for [the plan], we will ask all but the smallest businesses who don’t make a meaningful contribution to the health coverage of their workers to do so to support this plan,” explained the Illinois Senator. “And we also will repeal the temporary Bush tax cut for the wealthiest taxpayers.”

Mr. Obama says that “the time has come for universal, affordable health care in America.”

“Every year candidates offer up detailed plans with great fanfare, only to see them crushed under the weight of Washington politics and drug and insurance industry lobbying once the campaign is over,” he said.

“Well, this cannot be one of those years.”

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There are roughly 45 million people without health coverage. And those uninsured Americans are more likely to go without preventive care, such as routine doctor’s check-ups and physicals. They are also more likely to end up in the emergency room for serious health conditions.

Uninsured patients are guaranteed emergency care, but they’ll be charged for it — and they’ll be charged top dollar.

A study published in the May-June issue of Health Affairs found that uninsured patients are charged an average of 2.5 times higher than a patient with insurance, and 3 times higher than a patient covered by Medicare.

Patients with insurance, on the other hand, get substantial discounts. An appendectomy may cost $12,500 for an uninsured patient, while the insured might pay $5,000 or less.

“Hospitals shouldn’t be charging 3 times Medicare rates, especially from poor people who are uninsured,” said Gerard F. Anderson, who led the study at John Hopkins University.

But hospitals criticize Anderson’s study. They contend the 2004 data used for the study is outdated.

“Since 2004, hospitals have provided billions of dollars in free and discounted care for the uninsured and have changed their billing practices to lighten the burden on the uninsured,” said Jan Emerson, spokeswoman for the California Hospital Association.

To offset the some of the costs absorbed through uninsured care, hospitals are forced to raise rates for their care — and that contributes to the rising healthcare costs.

What can we do to help fix an ailing healthcare system?

“The solution is for people to be covered under health insurance,” said Anthony Wright, executive director for the consumer advocacy group Health Access California. “At the end of the day, if you can’t afford insurance, you can’t afford the discounted rates either.”

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