Posts Tagged health insurance

Insurance oversight advances but rate regulation stalls

Published: August 30, 2010 | No Comments

By Daniel Weintraub

The Assembly on Monday approved legislation to toughen oversight of health insurance rate hikes but the Senate rejected, at least for now, a measure to require state approval before companies can increase their premiums.

The Assembly passed SB 1163, by Sen. Mark Leno, which would require insurers to get an independent review of proposed rate increases to determine if they are justified by the underlying costs of care. The bill would also require public disclosure of proposed rate increases and the reasons for them, and mandate that insurance companies give their customers 60 days notice before premiums rise.

The bill now goes to the Senate for final action.

The Senate, meanwhile, rejected AB 2578 by Assemblyman Dave Jones, which would have required insurers and health plans to get approval for rate increases from the Department of Insurance or the Department of Managed Health Care. The bill also would have required prior approval of changes in deductibles, co-payments or co-insurance.

The bill stalled on a 17-17 vote in the Senate, where it needed 21 votes for passage.

The regulation measure was supported by a broad array of consumer, labor and health groups, who argued that it was the major missing piece in the health care overhaul approved earlier this year by Congress and President Obama. But he bill was strenuously opposed by the insurance industry.

Blue Shield of California argued that regulating insurance rates would do little or nothing to control the factors driving the increase in overall health costs. Insurance accounts for about 13 percent of the health care dollar, the company said, while doctors, hospitals, pharmaceuticals, labs and other factors represent the biggest costs.

“Unless this bill becomes law, Californians will continue to be faced with excessive health insurance rate increases,” Jones, who is running for insurance commissioner, said in a statement released by his office. “California is powerless to stop the 20 percent rate hikes Anthem Blue Cross will impose on 800,000 policyholders starting October 1st or the additional rate increase they intend to impose early next year. Blue Shield will be raising premiums up to 29 percent for 250,000 of their California policyholders and the state does not have the authority to prevent these rate hikes.”

 

New data on insurance coverage by California county

Published: August 23, 2010 | No Comments

The UCLA Center for Health Policy Research has posted a new fact sheet that shows the estimated percentage of uninsured Californians by county, updating numbers published earlier this year. The data show that the number of uninsured grew in every California county, and that 37 counties have a higher percentage of uninsured residents than the statewide average of 24.3 percent. The counties where the most people have lost coverage in recent months are, not surprisingly, among the poorest in the state. They are concentrated in inland Southern California, the San Joaquin Valley and far Northern California and the Sierra. See the fact sheet here.

 

Smoking cessation benefits can save lives, money

Published: August 17, 2010 | No Comments

By Tom Hopkins

Quitting smoking today is the number one thing that Californians can do to improve their health. Not a moment goes by without a citizen of our country and the State of California suffering from the hazards of tobacco use. Tobacco use has far reaching ramifications that encompass not only health issues, but widespread economic issues.

The difficulty that physicians, patients, and health care workers face today lies in the lack of accessible resources available to treat the ills of tobacco dependence.

Today, smoking is the number one preventable cause of death in the United States, and smoking-related illnesses are among the most dominant and preventable of all health issues. The U.S. Surgeon General cites tobacco as the single greatest cause of disease and premature death in America today. In California, there are nearly 5 million current adult smokers. Nationwide, more than 48 million Americans smoke, and 70 percent admit they want to quit. Even though seven in ten California smokers wants to quit, many smokers, particularly low-income Californians, lack the tools necessary to help them succeed.

As a practicing physician who specializes in treating chronic diseases including tobacco dependence and its health consequences, I continue to be frustrated by my inability to assist patients who lack coverage for medications and counseling services that would help treat their tobacco addiction.

We as a nation and a State can no longer afford to sit back and watch people die. The health of our children will be jeopardized by a well-known health hazard. If there is a smoking gun, it is our society that is holding it!

We can no longer afford to use an economic excuse for not covering the costs for smoking cessation treatments. The figures overwhelmingly demonstrate that coverage is a smart financial investment for governments, insurance companies and employers.

Nationwide, the total economic burden of smoking is at $193 billion. Indirect costs due to lost productivity from smoking-related illnesses in California total in the billions. The average cost for the package of covered smoking cessation services – including counseling and medication – is estimated at $487.50. In contrast, one smoker costs the Medicaid program in California an additional $1,951 per year over their lifetime. If only 10 percent of smokers quit, after five years, California Medicaid would save $59 million annually. If 50 percent of smokers quit, after five years, California Medicaid would save $296 million every year on smoking-related illnesses.

California now has an opportunity to take a stand against the hazardous health consequences of tobacco use and addiction. As we embark on Federal Health Reform implementation in California, it is time that we lend support to Californians who want to quit smoking.

Federal health reform was a good start, but under that plan, many insurers won’t have to cover smoking cessation treatments for years, or even a decade, and many patients who smoke will not even know they’ve gained coverage for the benefit.

If a Californian decides to quit smoking today, the best thing that we can do for his/her health and for the economy of California is to provide access to the full suite of CDC-recognized treatment options now, and to continue to cover different treatments and the doctor and patient try to find what works.

We know that quit-smoking programs are effective, but studies have also shown that it takes five to seven attempts to quit smoking. Many health plans currently cover only one attempt to quit per lifetime of a patient.

Federal health reform legislation requires that all new health insurance plans cover smoking cessation treatment with no cost sharing for American consumers.

California can improve on that piece of the federal reform. We can define what that benefit looks like for Californians, and we can make it available sooner, as opposed to years down the road. We can also make sure that all existing health plans cover access to proven treatment options recommended by the Centers for Disease Control.

If we do this, we will save lives, and money.

Dr. Tom Hopkins is the medical director for Employee Health and Chairman of the Utilization Management Team at Sutter Medical Center in Sacramento and former Medical Director for the Tobacco Cessation Program and Bariatric Program for Sutter Medical Center.

 

High-risk insurance pool to start coverage in September

Published: August 5, 2010 | No Comments

By Daniel Weintraub

California’s newly expanded program for people who can’t get insurance because of pre-existing medical conditions is about to open for business.

The program, one of the first pieces of federal health reform to be implemented here, is already accepting requests for applications, which will be available later this month. Coverage will begin in September.

“This is an important step in our progress to ensure that many more Californians can
benefit from this important new federal program,” Cliff Allenby, chairman of the 7-
member Managed Risk Medical Insurance Board, said in a statement released by the agency.

Rates under the new program will vary by region and the age of the applicant. The premiums will range from $127 monthly for a child in Southern California to $1003 a month for a 74-year-old person living in the Bay Area.

California will receive $761 million from the federal government to operate the plan through the
end of 2013. After that, new insurance rules will prohibit insurance companies from considering preexisting health conditions in pricing and eligibility.

Currently a state program provides insurance to about 7,100 high risk Californians each month. The federally funded expansion is expected to serve far more people.

To be eligible, a person must be a U.S. must be a citizen, a national or lawfully present in the
United States; must have had no creditable coverage in the six months prior to filing an
application; and must have a preexisting condition and by proof of denial by an insurance
carrier within the past 12 months or an offer of coverage above the premium level of the rates offered by the state’s high-risk program.

Nearly 4,000 people have requested an application for the program from the high-risk insurance board. Anyone who wants an application should submit their name, address, phone number and email
address to PCIP@mrmib.ca.gov.

 

Feds give consumers right to independent appeal

Published: July 22, 2010 | No Comments

By Daniel Weintraub

The Obama Administration has rolled out new rules giving consumers the right to an independent appeal when a health insurance company denies their claim, a system similar to one that has been in place in California for many years.

Under the federal plan, which will be phased in beginning next year, consumers will have to appeal to their insurance company first when their claim is denied. If the company won’t budge, the consumer can get a second review from an independent arbiter with the insurance company paying for the appeal, and paying the claim in full if the consumer prevails.

A system similar to this has been part of California law since 1998.

But unlike the California statute, the federal rules will also allow consumers an independent appeal when insurance companies try to cancel their coverage. The feds will also require that any decision be written in clear language that consumers can understand.

The system will take effect next year and cover an estimated 40 million people who have coverage through an employer or buy it themselves. By 2013 about 90 million people are expected to be covered by the rules.

Assistant Labor Secretary Phyllis Borzi told reporters the appeals protections don’t apply to health plans that were in place when Obama signed the health reform law, or to large employers who pay for their health costs directly, without insurance.

 

Private health plans push back against governor’s proposal

Published: July 12, 2010 | No Comments

The managed health care industry is pushing back against Gov. Arnold Schwarzenegger’s proposal for more transparency and state oversight — but not regulation — of the premiums insurance companies charge their customers.

Patrick Johnston, a former Democratic legislator who is now president and CEO of the California Association of Health Plans, says the governor’s proposal would drive up administrative costs while doing nothing to reduce the underlying cost of health care.

While the association is relieved that Schwarzenegger continues to oppose the kind of full-fledged rate regulation backed by Democrats in the Legislature, Johnston said the group has “concerns” even about the governor’s more modest plan.

Schwarzenegger is calling for actuarial reviews of rate increase proposals to determine if they are in line with underlying costs. But Johnston said those studies are highly technical and would cost as much as $100,000 each. They would have to be done for hundreds of separate rate structures offered by the industry.

Johnston acknowledged that some sort of review is required as part of the federal health reform passed earlier this year. But he said the full actuarial studies were necessary only in cases where the government deems the rate increases “unreasonable.”

“An analysis of states with rate review reveals that regulating rates has no impact on premiums,” Johnston said in a statement released by his group. “It’s the unique make-up of the market in each state, along with state insurance rules that dictates price.”

 

Schwarzenegger proposes insurance rate review, but not regulation

Published: July 7, 2010 | 1 Comment

Gov. Arnold Schwarzenegger, who has opposed regulating the rates charged by health insurance companies, has submitted a proposal to the federal government for a state program to review and publicize rate increases before they go into effect.

The program, according to the governor’s administration, is in line with the federal health reform legislation approved by Congress and President Obama earlier this year. The state is seeking a $1 million grant to add staff and contracted services to the Departments of Insurance and Managed Health Care.

Most of the money would go for actuaries, who will be hired to review the insurance company rate increase proposals and to check to see that those rate increases reflect increases in the core cost of providing health care. Some of the money would also go for computers and software to help make the rate setting process more transparent. The state plans to post rate increase proposals on its web sites and provide easy-to-follow information on changes in the cost of physicians, hospitals and other health services.

Democrats in the Legislature have been pushing for full-fledged rate regulation, giving the state the power to approve or deny rate increases sought by insurance companies. But Schwarzenegger has opposed that idea in the past, and nothing in this grant proposal suggests that he has changed his mind.

Here is an excerpt from the proposal:

The availability of grant funding will enable the DMHC and the CDI to begin to develop a more robust rate oversight capability to ensure that consumers are confident that the rates they are paying for their health benefits are truly reflective of the underlying cost factors. Consumer confidence will be further enhanced by state legislation to provide cost data on underlying factors in a readily accessible format so that consumers are better informed about the costs of their health care and health care coverage choices. Further, these funds will allow both departments to better coordinate and integrate information gathering and rate oversight functions. Finally, the ability to purchase greater access to actuarial services will permit both departments to increase the level of sophistication with which they are able to fulfill their joint mission of consumer protection.

To read the whole thing, go here.

 

Santa Clara proposes new tax for Healthy Kids program

Published: July 6, 2010 | No Comments

Almost a decade ago, Santa Clara County began a novel program that sought to bring health care coverage to every child in the county who was without it. The plan combined government funding with private donations and cooperation from health plans. And it worked. The number of kids without coverage dropped from one in eight to just 3 percent as 171,000 children were added to the rolls. But now the economic downturn that has prompted government and foundation cutbacks threatens the program, which has been closed to new enrollments for three years. And the county wants voters to pass a parcel tax to save the program. Karen de Sa of the San Jose Mercury has the story here.

 
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