INSURANCE INSIDER NEWS OCT 29, 2008


NEW PRODUCTS l FINANCIAL PLANNING l INDUSTRY NEWS l HEALTHCARE l IN CALIFORNIA l LIFE SETTLEMENTS


NEW PRODUCTS
Absence Management
Guardian Life is offering an absence management program to help business owners and benefit managers comply with the Family and Medical Leave Act (FMLA).  For more information, visit www.GuardianLife.com.

Dental
Lincoln National Corporation is offering a website link to its newly expanded panel of dental providers. For more information, visit www.LincolnFinancial.com.

Universal Life insurance
Nationwide Financial is offering “Nationwide YourLife Accumulation
Universal Life.” It is an individual, flexible premium, and adjustable universal life product. For more information, visit www.nationwide.com.

FINANCIAL PLANNING
People Have Stopped Contributing to Retirement Plans
Sixty-three percent of Americans have completely stopped contributing to their retirement plans, according to an Ameritrade survey. Half of those who reduced or stopped contributions cited the economic downturn; 32% blame unemployment, and 35% blame healthcare costs. Those in the 35 to 44 year age group were most likely to have stopped or reduced their contributions. For more information, visit www.ameritrade.com.

INDUSTRY NEWS
Insurance Companies Face More Lawsuits
Among American businesses, insurance companies were the biggest targets for new litigation in the past year. Two-thirds of insurers faced at least six new lawsuits. Eighty-five percent of insurance companies faced at least one new lawsuit last year, according to a survey by Fulbright & Jaworski L.L.P. Litigation has obviously become a major line item in insurance company budgets.  Nearly a quarter of the insurance companies reporting spent at least $5 million on litigation, excluding costs of settlements and judgments while 53% reported spending more than $1 million per year on business disputes.

Insurance companies’ in-house law departments reported insurance matters (70%) were their biggest concern, followed by contracts (56%) and Labor/Employment (39%). Thirty-six percent of insurance companies expect litigation to increase in the next year while only 12% are expecting a drop in suits.

Financial services companies were the most prolific plaintiffs in lawsuits in the United States, with 35% bringing at least six new lawsuits in the past year including 11% generating more than 20 new cases.  Insurers and engineering firms were the least likely to initiate new actions, followed by manufacturers and healthcare firms. For more information, visit www.fulbright.com/litigationtrends28.

HEALTHCARE
Benefits, Pitfalls Mark Candidates’ Health Plans
The healthcare plans of both major presidential candidates contain proposals that could reshape the insurance industry, according to a report by A.M. Best.

Sen. John McCain’s proposals include tax incentives favoring individual over group coverage, interstate sales of health insurance, federal support for high-risk pools, and quality-based and outcome-based reimbursement to providers.

A.M. Best said that the McCain plan’s flat tax credit may reduce insurance enrollment and revenue while a shift to the individual market would bring higher administrative expenses for carriers. Declines in revenue and erosion of margins under the McCain plan may be offset, in part, by reduced costs through quality-based reimbursement to providers.

Sen. Barack Obama proposes a public plan for people and groups modeled on federal employee benefits; mandatory insurance for children; expansion of government programs, such as Medicaid; a requirement for employers to offer coverage or contribute to the public plan; mandatory guaranteed issue; and medical loss ratio disclosure and limitations.

Under Obama’s plan, enrollment would likely increase in the near term and reduce the number of uninsured, possibly easing the financial pressure of uncompensated care on hospitals and physicians. Obama’s proposed public plan could attract profitable small-group business, squeezing private carriers’ margins as they seek to compete. For more information, visit www.bestweek.com.

How Engaged Are American Consumers?
A person’s ability to manage their healthcare varies considerably in the U.S., according to a national study by the Center for Studying Health System Change (HSC). The study identified four levels of patient engagement. At the lowest level, people are not confident enough to play an active role in their own healthcare.  At the second level, they lack basic knowledge and confidence in their ability to manage their health. At the third level, they take some action, but may still lack the confidence and skill to support all necessary behaviors. At the fourth level, people have adopted many of the behaviors to support their health, but may not be able to maintain them in the face of life stressors. People with higher engagement levels have much lower levels of unmet needs for medical care and have greater support from healthcare providers for managing chronic conditions. Forty-one percent of Americans are at the highest level of engagement.

Engagement levels are especially low for people with low incomes, those with less education, Medicaid enrollees, and people who say they are in poor health.  Those with private health insurance tend to have higher engagement than those with Medicaid or those with only Medicare. People with chronic conditions are more likely to have lower levels of engagement. They are much more likely to have unmet medical and prescription drug needs and to delay care. Less engaged people are also somewhat less likely to have a usual source of care. These differences remain even after controlling for socioeconomic and health status. The study also reveals that 63% of Americans believe that investing in disease prevention and helping people stay healthy will save money on long-term health costs. More than 60% say that fighting diseases related to obesity is a very important issue for the government to focus on, a nine-point increase from 2006. For more information, visit www.hschange.org.

Children's Health Tied to Parents' Income and Education
In some states, children in poor families are more than six times as likely to not be in optimal health compared to children in higher-income families. Also some states, children in middle-income families are twice as likely to not be in optimal health compared to children in wealthier families, according to a report from the Robert Wood Johnson Foundation. Differences in children's health by income can be seen across racial or ethnic groups. The mother’s level of education also affects children’s health. Children with college graduate mothers fare better than children with mothers who have only a high school education or a couple of years of college, but no degree. One third of children live in households where no one has had schooling beyond high school and another third live with at least one person who has attended, but not completed college. For more information, visit www.commissiononhealth.org/calculator.

CMS Offers Online Prescription Tools
The Centers for Medicare & Medicaid Services (CMS) has posted 2009 Medicare prescription drug plan and health plan information online through the Medicare Prescription Drug Plan Finder and Medicare Options Compare. For more information, visit www.medicare.gov.

IN CALIFORNIA
High Risk Pool is Helping Fewer People
The Los Angeles Times reports that enrollment in California’s publicly subsidized high-risk pool has dropped by almost a third since Arnold Schwarzenegger became governor. Rising premiums and limited subsidies have made the Major Risk program unaffordable for many. The program has a $75,000 benefit cap, high deductibles, and costly premiums. Schwarzenegger vetoed a measure that would have expanded the 17-year-old pool.

One of the major obstacles is the cost of premiums, which the law sets at 125% of commercial insurance rates. More than a third of pool participants who dropped out this year told the pool's administrators that they couldn't afford it anymore. A 55-year-old Los Angeles County resident with one dependent would have to pay $11,240 in premiums and a $450 deductible this year for the cheapest plan. Despite its cost, California's high-risk pool has limited use for people needing extensive medical care, such as those with cancer or chronic diseases. That is because the pool's benefits are capped at $75,000 a year, lower than the limits of any other state's pool. Only five other states' high-risk pools have any annual benefit limits.

Debate on Universal Healthcare Tomorrow
Dr. Mark Kleiman, professor at UCLA’s Department of Public Policy and Peter LePort, M.D., member of the Ayn Rand Institute Board of Directors will debate universal healthcare from 7:00 pm to 9:00 pm tomorrow. The free event will be held at the UCLA campus, Moore 100, Los Angeles, CA 90024. For more information: e-mail media@aynrand.org.

Grim Health Insurance Picture For California's Low-Income Kids
The number of overweight children in California declined slightly and preschool enrollment increased. Yet the health picture is still grim especially for California's low-income kids, according to research from the UCLA Center for Health Policy Research and sponsored by First 5 California.

Two-thirds of children without health insurance are from low-income families. Low-income children use community clinics for primary care three times as often as do that of higher income children. The proportion of children enrolled in private health insurance is shrinking while the reliance on public programs is growing.

“There has been a steady erosion of healthcare and health access for the most vulnerable children,” said David Grant, lead author of the policy research brief and director of the California Health Interview Survey (CHIS).

The proportion of children from birth to age five who lacked health insurance for all or part of the previous year remained unchanged between 2001 and 20005 at 10%. White and Asian children have the fewest gaps in health coverage while Latino children consistently have the most.

Between 2001 and 2005, the percentage of children from birth to age five who were covered by private health insurance decreased 3%, while public coverage increased nearly 5%.

In the same period, the percentage of children using a private doctor as their usual source of care decreased almost 19% while those using a public clinic or hospital as their usual source of care increased nearly 9%. There is some good news in dental care. Between 2001 and 2005, yearly dental visits increased 55% to 63% among one year olds with teeth and children ages two to five. For more information, visit www.First5California.com.

Healthcare Premiums Rose Five Times Faster than Earnings
From 2000 to 2007, premiums for family coverage provided through the workplace rose 96% while median earnings rose by only 19% for California workers, according to a report by Families USA. Premiums for family coverage provided through the workplace in California rose from $6,227 to $12,194 from 2000 to 2007.  During the same period, median earnings of California workers increased from $25,740 to $30,702.

These rising premiums happened alongside thinner coverage to workers with fewer benefits, higher deductibles, copayments, and co-insurance. Higher health costs and slow wage growth are causing a growing number of California families to join the ranks of the uninsured and underinsured. The number of non-elderly uninsured people in California is nearly 6.6 million, which is 20.4% of the non-elderly population. Rising healthcare costs are causing more people to go into debt. More than half of bankruptcies are now due, at least in part, to problems with medical costs.

“Skyrocketing healthcare costs were a problem in California before the economic downturn and slow wage growth or job losses now only make matters worse. If this troubling trend continues, the healthcare affordability crisis will get much worse and many more Californians will become uninsured and underinsured,” said Ron Pollack, Executive Director of Families USA. For more information, visit www.familiesusa.org.

Balance Billing Regs Go Into Effect
On October 15, state regulations went into effect to restrict balance billing for emergency care services.  Balance billing happens most often in emergency care when a doctor or hospital is not contracted with the patient’s health plan or medical group.  By law, health plans and medical groups only have to pay the reasonable and customary value of those services, which is often less than the provider’s bill, leaving a balance then passed on to the consumer.

The new regulations restrict balance billing by making it an unfair billing practice, thus allowing The department of Managed Health Care (DMHC) enforcement actions against providers and health plans. The DMHC is also aggressively addressing what it says is the root cause of balance billing, which is unfair or untimely claims payment by health plans and medical groups. It is launching a special Fair Claims Payment Initiative dedicated to faster investigations and enforcement of claims. For more information visit www.hmohelp.ca.gov.

LIFE SETTLEMENTS
Life Settlement Education Campaign
Now & Forever Funding, LLC launched a public awareness campaign about life settlements. It will include T.V. ads, nationwide seminars, weekly online webinars, continuing education courses, and monthly e-newsletters. The National Business Series, hosted by Hugh Downs, has selected NAF Funding to help educate Baby Boomers about the financial opportunities in life settlements. The series titled “Boomer Health” can be seen on PBS and major cable news channels including CNN, Fox News, MSNBC, and CNBC check local listings for dates. For more information, visit www.naffunding.com/31.html.

Top