While health spending in the U.S. is expected to climb to $2.6 trillion in 2009, the number of people without health insurance is expected to surge from 45 million to about 54 million, according to the Congressional Budget Office, as reported by the Associated Press.
The $2.6 trillion breaks down to $8300 for each person in the nation and calculates out to about 18% of the U.S. economy.
As the nation's legislators seek to expand health insurance coverage, they are also looking to make big changes in the system in an effort to slow overall health care costs.
Some changes being considered are changing the method of paying health care providers and altering tax policy vis-a-vis health insurance payments.
Thursday, February 12, 2009
Monday, February 9, 2009
More Openness on Fees
New York State Insurance regulators are considering opening a window on the details of compensation agents and brokers receive from insurance companies. Contingency fees are included in the package under study.
The regulation would require agents and brokers to inform their clients in writing of the total compensation to the producer involved in an insurance transaction.
The broker or agent would have to inform the client if there were any incentive payments from insurers that might influence decisions on placing policies. If requested, producers would be required to provide a client with details of payments actually received for a policy the producer recommends.
The proposed regulation is in the early discussion stage with insurance industry groups and consumers. It is expected to be subjected to a formal comment period and to be adopted by the end of 2009.
The regulation is similar to one approved by insurance regulators in New Jersey late last year.
The regulation would require agents and brokers to inform their clients in writing of the total compensation to the producer involved in an insurance transaction.
The broker or agent would have to inform the client if there were any incentive payments from insurers that might influence decisions on placing policies. If requested, producers would be required to provide a client with details of payments actually received for a policy the producer recommends.
The proposed regulation is in the early discussion stage with insurance industry groups and consumers. It is expected to be subjected to a formal comment period and to be adopted by the end of 2009.
The regulation is similar to one approved by insurance regulators in New Jersey late last year.
Monday, February 2, 2009
Social Security Hit Hard
A big surge in new disability claims has swamped the Social Security Administration, according to a report in the magazine Government Executive.
The magazine was told by the SSA that its disability claims caaseload had increased by 10% recently, more than the agency had expected and budgeted for.
Tuesday, January 27, 2009
Good for NAIC
State insurance commissioners have turned down a request by the nation's insurers to loosen up the amount of funds insurers have to keep in reserve to pay life insurance claims.
As part of the continuing saga of the economic tailspin, the National Association of Insurance Commissioners (NAIC) held a hearing last January 29 on requests by insurers to ease the reserve requirements of life insurance companies. The reserve is the amount of funds each state requires insurers to keep safe to support payments which may have to be paid out on policies.
In announcing the decision, NAIC's president said the insurance industry is generally in better shape than the rest of the financial services sector because of strong state solvency regulations.
The proposed changes were opposed by some consumer groups.
As part of the continuing saga of the economic tailspin, the National Association of Insurance Commissioners (NAIC) held a hearing last January 29 on requests by insurers to ease the reserve requirements of life insurance companies. The reserve is the amount of funds each state requires insurers to keep safe to support payments which may have to be paid out on policies.
In announcing the decision, NAIC's president said the insurance industry is generally in better shape than the rest of the financial services sector because of strong state solvency regulations.
The proposed changes were opposed by some consumer groups.
Tuesday, January 13, 2009
Isn't It The Truth?
Isn’t it amazing how whenever an industry makes a money mistake it is inevitably in favor of the “mistakor” (the industry) rather than the “mistakee” (the consumer)?
Another example of this truism just came to light with a settlement recently announced between the State of New York and giant insurer, UnitedHealth Group.
The State investigated claims that databases operated by a UnitedHealth business unit and widely used by insurance companies to calculate policyholder reimbursements when policyholders used doctors who were not part of the insurance company’s network, consistently underreported the actual cost to patients, thereby saving insurance companies hundreds of millions of dollars over the last decade.
Insurers usually have to reimburse policyholders 70 or 80% of an out-of-network doctor’s charges. If the charge is said to be $80 rather than the actual $100 charge, the insurance company’s 70% reimbursement cost would be $56 rather than the $70 it should be. And, the policyholder is stuck with paying the difference.
In the settlement, UnitedHealth agreed to pay $50 million to create new databases to determine the prevailing cost of medical care in various sections of the country. The database will be created and operated by a university yet to be named.
Another example of this truism just came to light with a settlement recently announced between the State of New York and giant insurer, UnitedHealth Group.
The State investigated claims that databases operated by a UnitedHealth business unit and widely used by insurance companies to calculate policyholder reimbursements when policyholders used doctors who were not part of the insurance company’s network, consistently underreported the actual cost to patients, thereby saving insurance companies hundreds of millions of dollars over the last decade.
Insurers usually have to reimburse policyholders 70 or 80% of an out-of-network doctor’s charges. If the charge is said to be $80 rather than the actual $100 charge, the insurance company’s 70% reimbursement cost would be $56 rather than the $70 it should be. And, the policyholder is stuck with paying the difference.
In the settlement, UnitedHealth agreed to pay $50 million to create new databases to determine the prevailing cost of medical care in various sections of the country. The database will be created and operated by a university yet to be named.
Wednesday, January 7, 2009
Another Blast for UNUM
Some insurance companies have all the luck! Another Court has teed off on the business practices and tactics of a UNUM insurance company (see UNUM item below) in a disability income insurance case by adopting language saying the company has a "...disturbing pattern of erroneous and arbitrary benefits denials, bad faith contract misinterpretations and other unscrupulous tactics."
In McCauley v First Unum Life Insurance Company, 2008 U.S. App. LEXIS 26094 (2nd Cir. 2008), the Appellate Court found that the evidence clearly indicated that the client was entitled to disability benefits from the time he made his claim in 1995, a period of about a dozen years.
To maintain a lawsuit for such a long period of time when one is seriously ill and can't work to bring in money to live on requires a special set of circumstances that most claimants don't have. And, don't think the insurance companies, such as Unum, aren't aware of this situation. They are in the business of savings themselves money on claims and the natural circumstance of the claimant without funds to live on puts intense pressure on claimants to settle for less than they would be entitled to or even to give up claims altogether if they can't get a disability insurance attorney to take the case on contingency.
Time is usually of the essence for the claimant in a disability income insurance case. An attorney who knows disability income law and insurance company tactics would seem also essential.
In McCauley v First Unum Life Insurance Company, 2008 U.S. App. LEXIS 26094 (2nd Cir. 2008), the Appellate Court found that the evidence clearly indicated that the client was entitled to disability benefits from the time he made his claim in 1995, a period of about a dozen years.
To maintain a lawsuit for such a long period of time when one is seriously ill and can't work to bring in money to live on requires a special set of circumstances that most claimants don't have. And, don't think the insurance companies, such as Unum, aren't aware of this situation. They are in the business of savings themselves money on claims and the natural circumstance of the claimant without funds to live on puts intense pressure on claimants to settle for less than they would be entitled to or even to give up claims altogether if they can't get a disability insurance attorney to take the case on contingency.
Time is usually of the essence for the claimant in a disability income insurance case. An attorney who knows disability income law and insurance company tactics would seem also essential.
Tuesday, January 6, 2009
$25 Billion Insurance Brouhaha
Economic hard times are gnawing away at what appears to be the last solid bastion of financial stability - the insurance industry.
Changes in the amount of reserves that insurers must hold by law are being sought by the American Council of Life Insurers (ACLI) and are under very active consideration by the National Association of Insurance Commissioners (NAIC), the organization of all 50 State Insurance Commissioners. The proposed changes would reduce the reserves of life insurers by about $25 billion.
Just a few months ago, NAIC was proudly announcing that state-mandated reserve requirements were buoying insurance companies, keeping them afloat and solvent while financial giants such as Lehman Brothers were going belly up. Now, at the behest of ACLI, NAIC is on the cusp of reducing the reserve requirements because the market downturn has reduced the insurance industry's capital levels.
The move to reduce insurance reserve rules is opposed by the Consumer Federation of America and the Center for Economic Justice. These groups believe any reduction in reserves, especially in these tough economic times, increases the risk that an insurer might fail to pay its obligations under life policies and annuity contracts.
The NAIC has scheduled a public hearing on the issue for Tuesday, January 27, 2009, from 10 AM to 2 PM at the Marriott Wardman Park Hotel, 2660 Woodley Road, NW, Washington, DC 20008. Written comments should be submitted by Friday, January 23 to tsells@naic.org.
Changes in the amount of reserves that insurers must hold by law are being sought by the American Council of Life Insurers (ACLI) and are under very active consideration by the National Association of Insurance Commissioners (NAIC), the organization of all 50 State Insurance Commissioners. The proposed changes would reduce the reserves of life insurers by about $25 billion.
Just a few months ago, NAIC was proudly announcing that state-mandated reserve requirements were buoying insurance companies, keeping them afloat and solvent while financial giants such as Lehman Brothers were going belly up. Now, at the behest of ACLI, NAIC is on the cusp of reducing the reserve requirements because the market downturn has reduced the insurance industry's capital levels.
The move to reduce insurance reserve rules is opposed by the Consumer Federation of America and the Center for Economic Justice. These groups believe any reduction in reserves, especially in these tough economic times, increases the risk that an insurer might fail to pay its obligations under life policies and annuity contracts.
The NAIC has scheduled a public hearing on the issue for Tuesday, January 27, 2009, from 10 AM to 2 PM at the Marriott Wardman Park Hotel, 2660 Woodley Road, NW, Washington, DC 20008. Written comments should be submitted by Friday, January 23 to tsells@naic.org.
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