Tag Archives: insurance companies

New rules affect patients’ insurance appeals

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

Kaiser Health News’ Phil Galewitz and Michelle Andrews have an update on health care reform implementation, pointing out that new rules will give consumers the right to appeal insurance denials, first directly to the insurer and then to review boards. The rule doesn’t break new ground in most states – only five lack such regulations, and existing plans are “grandfathered in” under the old rules – but it may bring order to a chaotic national patchwork on insurance appeals. The White House estimates that, by next year, the rules will benefit about 41 million Americans insured either through employers or through individual plans. The administration is pushing states to implement the new standards by next July.

The new regulations take effect for plan years starting Sept. 23. But they won’t automatically apply to residents in states that have existing external review laws until next July. That’s to give states time to adjust to the new standards.

If states fail to change their rules by next July, their residents will then be able to rely on the federal standards. But federal officials are still working out the details of how that would be done.

Read the HHS press release here.

AHCJ resources

  • Reporting on health reform between now and 2014: Some top Washington, D.C.-based journalists discussed implementation deadlines, how to tie local issues to reform, Medicare reimbursement rates, what reporters should look for in their states and more. A recording and transcript of this briefing and a resource list are available.
  • Covering high-risk insurance pools: The federal government and states are scrambling to create temporary high-risk pools for the medically uninsurable, as one of the first provisions of the Patient Protection and Affordable Care Act to go into effect. Apart from being a policy story, it’s of great interest to all your readers, viewers or listeners who have pre-existing conditions and are struggling to find coverage. Four reporters covering the topic have shared their story tips, suggestions and resources for AHCJ members.
  • Health care reform has passed: What’s next? Four journalists on the front lines offer their advice and suggestions on what needs to be covered next, how it might affect local communities and how to approach this complex topic.

Why insurers care about the medical-loss ratio

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

The Wall Street Journal‘s Avery Johnson explains the significance of the “medical-loss ratio,” a single metric within the reform bill that holds great significance for the insurance industry.

The ratio, known to wonks as the MLR, signifies the percentage of premiums insurers use for medical costs versus the amount that goes to paying administrative overhead. For individual and small-business plans, it’s set at 85 percent medical to 15 percent administrative. For larger businesses, the magic medical number is 80. Those who don’t meet the threshold would be forced to pay rebates to customers.medical-loss-ratio

At present, the key issue seems to be subsidiaries. Major insurers have hundreds of them each, and while the insurer could meet the requirements if all subsidiaries were averaged together, they won’t be able to hit the numbers at every single subsidiary. Current draft documents, Johnson reports, seem to imply that each subsidiary would be judged separately, a practice which insurers say might force them to stop providing insurance in certain high-risk areas.

Applying uniform numbers to the segmented, fragmented insurance industry could prove tricky. Johnson looked at the numbers.

UnitedHealth, for instance, has about 392 subsidiaries, according to Goldman Sachs health-care analyst Matthew Borsch. Its average MLR for individual policies is 69%, dragged down by a 63% ratio at its dominant Golden Rule subsidiary, according to a report by Goldman Sachs that examined state insurance filings. The Minnetonka, Minn., insurer could owe about $280 million in rebates in 2012, Mr. Borsch estimates, based on his reading of the methodology in the health care law.

The rules will be set by the National Association of Insurance Commissioners, a coalition of state insurance regulators. They’re hoping to have recommendations ready for HHS by the end of this month.

Healthcare.gov coming July 1

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

KHN’s Phil Galewitz previews the July 1 launch of a federal website he says “will give consumers a list of all private and government health care plans for individuals and small businesses in their areas,” a service required by the reform bill, and one that has never before been part of the modern system.

The initial site will just provide basic information on each plan, but a planned October upgrade will include what Galewitz called “detailed cost and benefits information,” the precise nature of which is still being negotiated. Insurance groups, predictably, say that sharing all the information HHS plans to provide will just lead to confusion and higher costs. Consumer groups disagree.

Insurers including UnitedHealthcare and Aetna say HHS is going too far in planning to list certain data, such as the percent of claims that health plans deny, the rate at which they cancel policies after customers get sick and the number of times patients appeal coverage decisions. They say the data would mislead potential customers.

The site can “be the great equalizer so consumers can have equal access to information and be on the same playing field as insurance companies,” says Elisabeth Benjamin, co-founder of Health Care for All New York, a consumer health care coalition. “The government needs to make the information as open as possible.”

Until 2014, when stricter provisions of the reform bill go into effect and such practices are no longer permitted, the site will list only the “sticker prices” of the plans, and insurers will still be allowed to charge sicker patients more.

AHCJ members get tips on covering rate hikes

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

Bryant Furlow of The New Mexico Independent reported that Blue Cross Blue Shield New Mexico was raising some premiums by about 21 percent. It sounds like a lot, but Furlow wanted to compare it to other states for context. So, he e-mailed the AHCJ electronic discussion list and asked members across the country what their local Blue Cross / Blue Shield increases looked like, and how state insurance regulators had been responding.

That same day, Jim Hall replied with thoughts and a link to his paper’s story about similar hikes in Virginia, and Diane Cochran of the Billings Gazette reported that Montana rates had jumped between 9 and 19 percent. News and links to Massachusetts’ own conflict with Blue Cross came from Kay Lazar at The Boston Globe and Felice Freyer of The Providence Journal offered another set of links from Rhode Island along with some veteran advice:

When you’re comparing among states, keep in mind that there’s a difference between the individual and group markets, with rates more volatile in the individual market. I think the huge California increase was in the individual market only. In RI, individual rates (called Direct Pay here) are tightly regulated and BC takes a loss on those products.

Within a few hours of his request, then, Furlow got data and advice that applied to his own story and hundreds of other health journalists gained context and story ideas they could use at their own publications.

Freyer has some additional cautions for anyone considering a comparison of plans and rates across state lines:

Be sure to compare individual-market rate increases with individual-market rate increases and group with group. Don’t compare individual rates in one state with group rates in another. If you are trying to find out whether the increases in one state are extraordinary compared with other states, you may be able to get at that only in a general sense. It’s hard to compare states because state laws, demographics and economic conditions vary.

The electronic discussion list is one of many benefits reserved for AHCJ members. For more information and a searchable archive, check our guide to the electronic discussion list. If you’d rather call it a Listserv, you’re in charge of getting the rights to the trademark.

What about rate hikes in your area?

Have you written about recent Blue Cross / Blue Shield increase? Share your stories – and any advice or tips you have  – in the comments section below.

Are insurers to blame for rising costs?

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

The San Francisco Chronicle‘s Carolyn Lochhead and Victoria Colliver use the recent furor over insurer Anthem’s rate hikes to explore just how much of the blame for rising health care costs should be shouldered by insurers. The reporters find that, in the end, insurers are just another one of the cartels (others include device makers and providers) and operate inside the opaque world of medical pricing and snag hefty cuts for themselves. Lochead and Colliver put it thus:

While the Anthem case has raised a political storm, the underlying surge in costs gets far less scrutiny. But each sector of the health industry points fingers at the other for driving up prices, and all are raking in money.

Insurers blame hospitals and doctors, doctors blame insurers, and hospitals blame doctors and medical devicemakers in what academics call an inscrutable medical-industrial complex that rivals anything the defense industry ever invented. All these groups are combining into what many experts describe as cartels.

The reporters write that, despite their best efforts, they weren’t able to get many folks on the record. When they did find someone who was willing to talk, it was often a source we’ve seen before in other cost stories. It’s a tough theme to get quotes on, as nobody wants to burn bridges with their professional suppliers and everybody’s got some sort of skin in the game. They did, however, manage to find a local source who offered an original and illuminating anecdote:

Christina Bernstein, a medical-device engineer and independent sales representative based in San Francisco, sells disposable surgical tools made mostly out of plastic that she estimates are manufactured for about $40 each. These are marked up and sold to hospitals for as much as $350, she said, for a single use in a surgery on a patient.

“But if you were to get a detailed bill of what the hospital was charging the insurance company for the insured patient, those things get marked up to something like $1,200,” Bernstein said. “It’s ridiculous. There’s no open competition.”

(Hat tip to AHCJ Immediate Past President Trudy Lieberman, who wrote a column on CJR.org praising the Chronicle‘s story.)

Employers, insurers, consumers agree on COBRA

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

The Miami Herald‘s John Dorschner looked into just how much of a hassle it is for laid-off employees to retain health coverage through the federal COBRA program. Along the way, he also noted that the program’s not popular with employers or insurers either.

Dorschner opens with an anecdote that shows just how broken the system is and illustrates the frustrations many are facing.

The Rosens’ case is an extreme example of something that’s happening frequently throughout South Florida: Laid-off workers are struggling through a difficult maze to keep health insurance while insurers and former employers have no interest in helping them beyond what federal and state laws require.

For employers, COBRA means unwanted paperwork and bureaucracy. For insurers, it means unwanted risk.

A key problem for insurers is that young and healthy employees who are laid off tend to reject COBRA, while older and sicker workers grab it. “Typically those who take COBRA coverage cost two to five times [[more] in benefits than a normal employee costs,” LeCompte says.

Despite its flaws, COBRA is seen to provide an important safety net, and the 65 percent federal subsidy for COBRA coverage has been extended to cover those workers laid off before March 1, 2010. Furthermore, the House version of the reform package, at least, has a provision saying that folks could retain their COBRA coverage at least until federal insurance exchanges begin sometime around 2013.