I haven’t seen any new data released recently comparing the population with health insurance in 2007 versus 2009, but my guess is that there are a lot more uninsured Americans now than there were a few years ago.

As Joe pointed out, higher deductibles and copays also play a role.  Two years ago, before the recession had really taken hold, researchers had already found out that people with high deductible health insurance policies were two to three times more likely (compared with people covered by traditional health insurance plans) to stop taking medications to control chronic conditions.  For people who opt for a HDHP but then don’t set up and fund an HSA, paying for health care can indeed be a major hurdle.  And if people with high deductible health plans were skipping their meds back in 2008, it makes sense that after two years of a recession, health care costs have taken even more of a backseat for families struggling to make ends meet.

Copays and deductibles have risen for most families over the last few years, even those who don’t have policies that qualify as high deductible.  And at the same time, economic stability has decreased for most families.  This isn’t a good combination, and Joe’s right about the fact that when people skip necessary routine medical care, it will likely lead to increased medical costs (and declining health) in the future.

Joe’s article was included in the Health Wonk Review this week, hosted by InsureBlog.

Colorado will get $1 million to use for more extensive review of future rate increases, and the Division of Insurance has proposed hiring more analysts and actuaries to examine the data that is filed each year by the insurance carriers.  The rate proposals will get more scrutiny, which is a good protective measure for consumers.  But insureds could still see hefty rate increases thanks to the ever-increasing cost of health care.  In CA, after months of review, regulators still approved a double digit rate increase for Wellpoint policies (14% average, with individual increases as high as 20%).  If the cost of health care continues to increase at its current pace, health insurance premiums will also continue to climb.  A more thorough review of the extensive data involved in determining health insurance premiums makes sense, but without significant measures to cut the cost of health care, those reviews may find that there is no way around raising premiums year after year, often by noteworthy amounts.

Applying to the program is an obvious step for a business that would like to continue to provide health insurance for early retirees.  But the question remains as to whether the $5 billion designated for the ERRP will hold out until 2014 when all of the provisions of the PPACA become effective.  But between now and then, having the option to remain on a previous employer’s group health insurance plan does take a lot of pressure off of early retirees, especially those with health problems who may have difficulty securing individual coverage.

Whether the money will last or not remains to be seen.  But for now it looks like a good option for employers who are looking for a helping hand in providing health insurance for their early retirees.  For people in Colorado who retire before age 65 and don’t have employer-provided early retiree health insurance benefits, there are lots of options available in the individual market, although those do require that the applicant be reasonably healthy in order to qualify.  For those who don’t qualify medically, there are two guaranteed issue programs available in Colorado now:  Cover Colorado and GettingUsCovered.  They aren’t cheap, but they are guaranteed issue for people with medical conditions that preclude medically underwritten individual policies.

The only way an insurance policy will be able to avoid some of the changes implemented by the new law is to retain grandfathered status, basically by keeping the policy mostly unchanged from the way it was on March 23, 2010, when the law was passed.  But it turns out that the benefits of grandfathering a policy aren’t really worth the restrictions involved, for most US companies.  Ninety percent of employers expect to lose their grandfathered status before 2014, mainly because they want to be able to make significant changes to their plan design or adjust the amount that they contribute to employees’ premiums.

Some of the new rules will apply to all policies, even if they retain grandfathered status.  The ban on rescission except for causes of fraud, the ability for people to remain on their parents’ policy until age 26, and the removal of lifetime coverage maximums will apply to all policies, grandfathered or not.  In addition, employer sponsored group plans will have to provide coverage for children regardless of pre-existing conditions, even if the plan is grandfathered.

Most large employer-based plans already offer many of the protections that are included in the Affordable Care Act, which likely explains why employers would rather choose flexibility over grandfathered status.  They won’t have to make significant changes in order to conform with the law, and they want to retain the option to decrease benefits or lower their contribution rates in order to keep their health insurance costs in check.

Small employers and people with individual health insurance are more likely than large groups to make significant plan changes or switch to a new carrier in any given year, so it’s reasonable to expect that most people with small group or individual coverage will not be on grandfathered plans by 2014 either.

The text of the bill is relatively clear on some of the specifics:   It states that all group and individual health insurance policies…

“…shall insure against the expense of normal pregnancy and childbirth or provide coverage for maternity care therefor and provide coverage for contraception in the same manner as any other sickness, injury, disease, or condition is otherwise covered under the policy or contract.”

I would take that to mean that the policy out-of-pocket costs in terms of deductible, coinsurance, hospital and doctor copays, etc. would have to be met by the patient, and the rest of the costs would be covered by the insurance carrier.

The bill also states that individual policies (but not group policies) are still allowed to exclude pregnancy as a pre-existing condition:

“Individual sickness and accident insurance policies or contracts may exclude coverage for pregnancy and delivery expenses on the grounds that pregnancy was a preexisting condition.  The exclusion for the pregnancy as a preexisting condition under the policy or contract shall not apply for any subsequent pregnancies.”

But does that mean that the insurance carriers have to accept pregnant women and just exclude the pregnancy and delivery from the coverage?  Currently, no individual health insurance carrier in Colorado (or most other states) will accept any expectant parent (mother or father) at all until after the baby is born.  The pregnancy is considered a pre-existing condition, and because new babies can be added to either parent’s existing policy in the month following birth with no underwriting, health insurance carriers have all opted to deem pregnancy as an automatic decline.  As of 2014, this will no longer be the case, but I have heard nothing indicating that there will be any changes to the universal underwriting guideline that states that an expectant parent cannot get a new individual health insurance policy.

In terms of what policies will be affected, the bill states that the new requirements wills apply to policies “issued or renewed on or after the effective date of this act.”  (January 1, 2011).  My interpretation of that would be that new policies issued beginning January 1, 2011 will include maternity coverage, and that as existing policies renew throughout the year, maternity will be added to them.  So for example, the policy that Jay and I have for our family renews each year on November 1.  So I would assume that for the first 10 months of 2011 we will continue to not have maternity coverage, but then as of our renewal date in 2011, maternity will be added to our plan.

Of course my guesses in terms of how this will all work are just that – guesses.  And I have not been able to find anyone who has more concrete details at this point.  We still have several months left in 2009 for regulators and insurance companies to work out the details, and I’m sure we’ll know more by the end of the year.  When you combine this with the new Colorado law banning gender rating on health insurance policies, and the myriad of reforms coming from the federal government, I’d say that health insurance regulators in Denver are going to have their hands full for a while.

I agree with Bob that this decision is likely to result in fewer family applications placed with Cigna.  But I wonder if the recent addition of the option for insurers to use an open enrollment period for children will make this sort of commission-cutting unnecessary for other carriers.  Obviously insurers aren’t going to be excited about the prospect of offering guaranteed issue coverage to sick kids, especially while there is no requirement that all kids be insured (which would mean that there would be more healthy kids in the pool to offset the costs of care for the sick ones).  But it does seem a bit counter-productive to discourage agents from marketing policies to families in general, as a family with a sick child might have several other healthy family members who would be on the policy too, requiring little in the way of expensive care.

My guess is that if the provision for an open enrollment period had not been added, the guaranteed issue for children idea would have caused more problems than it solved.  There is no doubt in my mind that some parents would have opted to not have health insurance for their kids until if and when the child became ill and needed care.

Hopefully the fact that insurers can designate an open enrollment period for children to be accepted on a guaranteed issue basis will make it more likely that parents will keep their children continuously insured.  The spirit of the law regarding coverage for children is good:  It isn’t right that sick kids should be unable to get health insurance at any price.  But with no requirement that all kids be insured, and without a designated open enrollment period, the new law would absolutely have encouraged adverse selection.

I found Bob’s article from a link in this week’s Cavalcade of Risk, hosted by Nancy Germond.

The addition of the option for insurers to have an annual open enrollment period for children makes the new rules regarding children much less likely to result in adverse selection.  There is currently no requirement that all children have health insurance (that won’t come until 2014), and if the law had been interpreted to mean that health insurance carriers simply had to accept any child who applied, at any time, with no regard for medical history, there would have been nothing to protect insurers (and insureds who maintain continuous coverage) from people who opt to go without health insurance until they are sick.

Some parents with sick kids have done everything they could to maintain coverage for their children, and the new law will be a blessing to them.  But we’d have to be wearing very rose-colored glasses to assume that no parents would abuse the system by not paying premiums when their kids are healthy, and then applying for coverage when something appears to be wrong.  Having an annual open enrollment period makes health insurance available for families who truly want to maintain continuous coverage for their children but have been unable to do so because of pre-existing conditions.  But it will make it much more difficult for people who want to obtain coverage for a limited time while a child is in need of care.

So far, we’ve been notified by one Colorado carrier (Celtic) that they will no longer accept applications for child-only policies, and other carriers around the country are taking similar steps.  Hopefully the fact that insurers are going to be allowed to set up open enrollment periods will mean that most carriers will continue to offer child-only policies.  There has always been a genuine need for that type of policy, and I’d hate to see if disappear because of adverse selection.

I’ve arranged the cavalcade roughly by topic, but I wanted to start off with an article from Jon Coppelman of Workers Comp Insider.  It’s the story of flight data recorders, invented by David Warren, who lost his own father in a plane crash when he was a child.  Warren never profited financially from his invention, but it’s safe to say that all of us who travel by air are better off because of his work.

Healthcare

The Healthcare Economist, Jason Shafrin, shares some interesting data about healthcare utilization in conjunction with Medicare Part D.  Not surprisingly, the availability of Part D has resulted in an increased demand for prescription drugs.  Although that increased utilization is partially offset by a decreased usage of other non-pharmaceutical medical services.  But the most intriguing aspect is that “gaining prescription drug coverage was associated with worsening health.”

Evidence based medicine has had plenty of air time recently, and is often touted as a way to reduce health care costs and improve the quality of care.  But Jaan Sidorov of the Disease Management Care Blog reminds us that succession – the idea that an observable outcome must have been caused by a specific intervention – isn’t always accurate in a system as complex as health care delivery.  There are many factors that have to be accounted for, and it’s difficult to point to any single intervention as the cause of a particular outcome.

Health Business Blog’s David Williams explains a new technology that allows hospitals to create an online patient portal that is linked to the patient’s medical information.  Once the patient signs in, the website generates ads and content based on the patient’s specific medical information, much the way Amazon makes recommendations based on your previous purchases.  As David points out, there is some room for problems here.  Not to mention the increased utilization that could result from specifically targeted pharmaceutical and medical device advertising.

Brian from Business Risk Management tells us about the actuaries who discovered the mistake in Anthem Blue Cross Blue Shield’s initial CA rate increase request, and how correcting the problem lowered the rate increases from an average of 25% to an average of 14%.

InsureBlog’s Bob Vineyard gives us his take on health insurance for children starting this fall:  scarce and expensive.  There is no way that it’s going to be a simple or cheap process for all children to gain access to guaranteed issue health insurance (especially in the absence of any mandate requiring all children to have coverage).  There has been confusion around this part of the law for months, and it’s reasonable to assume that other states will follow suit in terms of setting up new plans for children or ceasing to offer child-only coverage for the time being.

The Notwithstanding Blog addresses President Obama’s alleged hostility towards consumer directed health plans.  It’s true that consumers tend to want the latest and greatest in health care, which leads to over-utilization.  We here at the Colorado Health Insurance Insider are big fans of HSA qualified policies and consumer directed health care in general, but we recognize that it has it’s limitations.

Offshore Drilling And Risk Management

Claire from the Insurance Industry Blog discusses the potential for litigation surrounding the health of workers who are involved in the Deepwater rig disaster clean-up efforts.  If we recall the health problems that arose for rescuers and demolition crews after 9/11, it makes sense that something similar could happen this time too.  Hopefully all possible precautions will be taken to protect the thousands of people who are working to save the Gulf.

In keeping with the oil rig theme, and with a fascinating discussion of managing unthinkable risk , we have an article from Actuary Info called “the LORD and Risk Management”.  Check it out.  I know you’re curious.

Life And Long Term Care Insurance

Miranda from Budget Life reminds us that funeral costs can be a burden on loved ones when you die, and that they are one more reason to have at least some life insurance in place, or a reserve of funds to pay for the funeral.  She also gives us a look at some of the most expensive funeral options out there… want to be made into a diamond?  For 25 grand, you can do just that.

Free Money Finance explains four scenarios that increase the chances you’ll eventually need long term care (and thus long term care insurance unless you’ve got some other way of paying the often very steep bill that can go along with long term care).

Liability, Auto, And Business Risk Management

If you’re an uninsured motorist in the UK, you better get some insurance soon.  Car Insurance Blogger tells us about a new system in the UK that is linking the Motor Insurance Database with the Driver and Vehicle Licensing Agency, automatic plate recognition systems, and police national computers to track down uninsured motorists.  I wonder how feasible such a system would be here?  Probably a bit more complex, given that we have 50 states, all with their own laws concerning auto insurance, and their own licensing system.

Attorney Nina Kallen takes her daughter’s camp to task for not having liability insurance.  It sounds like the camp is covering it’s legal bases by having the parents sign a waiver releasing the camp from liability if something happens to one of the kids, but I’d say that Nina’s right in this situation… liability insurance is a good idea.

Being in the health insurance industry, we tend to think of pre-existing conditions in terms of medical issues.  But an article by Tred R. Eyerly about a flawed construction project illustrates how pre-existing conditions can cause nasty litigation between P&C carriers as well.

Nancy Germond writes about the various insurance policies that you may need if you’re starting a new business.  The example she uses is a roofing business, but a thorough discussion with an experienced insurance agent is a must when starting any kind of business.

Risk Management In Investing

Should you buy gold as a means of diversifying your assets?  The Silicon Valley Blogger explains how adding gold to your portfolio can be helpful as a risk management tool, and also provides several avenues people can use to buy gold.

Proponents of a health insurance system with little or no government regulation might believe that the government shouldn’t dictate what types of policies can be sold, but rather that the free market will figure it out.  But we know that underwritten health insurance doesn’t operate in the same type of free market model as say, designer handbags.  It’s a lot more complicated than that.  And buying the wrong coverage can cost a consumer far more than just the premiums.

Most people shopping for health insurance look for advice from their family and friends, agents and brokers (not all of whom are honest and ethical, unfortunately), and marketing materials created by health insurance carriers.  Very few people read all the fine print on their policies during the 10 day free look period.  Often they just put the policy in a drawer until they need medical treatment, at which point they might find out that the policy they got is full of holes.

If something sounds too good to be true, it probably is.  That’s good advice, and is very applicable when it comes to insurance.  ”Discount plans” that offer to cover your whole family for $99/month with only $25 copays for doctor visits are fairly easy to spot as scams (although unfortunately some people do still buy them).  But when a policy is actually labeled as “health insurance” and has lots of familiar terms like deductible, coinsurance, network, etc., it can be harder to spot the -sometimes gaping – holes in the coverage.  Often these policies are sold by lesser-known carriers, and sometimes the premium will be lower than policies sold by more reputable carriers.  But a closer look might reveal very scanty annual or incident maximums, “optional” coverage for essential services like chemotherapy, no limits on out of pocket expenses, and the list goes on.

The new regulations won’t have much of an impact on good-quality policies from reputable health insurance carriers.  Those plans already provide solid coverage for essential services.  But removing the worst policies from the market – or forcing them to improve their coverage – will protect consumers who might otherwise have bought those plans thinking that they were as good as all the other options.  And that’s a good thing.

Beth’s article was included in the Health Wonk Review this week.

It’s true that programs like Medi-Share are exempt from the regulations established under HR3590, because they’re technically not health insurance companies.  Of course that has it’s downsides too… they are not regulated by state insurance commissioners, and they are very clear in stating that the program is not health insurance and that payments are not guaranteed.

Although regular health insurance companies do impose various limitations and restrictions on various aspects of coverage, Medi-Share does so to a greater extent.  Pregnancies to unwed mothers are not covered unless the woman can prove that she was raped.  In the event that a member has fertility treatment that results in multiple births, the program will pay up to $25,000 for complications to the mother and/or children, including the cost of the delivery.  If you’ve ever known someone who gave birth to multiples with complications, you know that $25,000 won’t go far.  I guess this is an incentive for Medi-Share members to steer clear of fertility treatments that might result in multiples (the infertility treatment itself is also not covered, but that is true of most individual health insurance policies too).  Most individual health insurance carriers in Colorado don’t offer basic maternity coverage at all right now (although that will soon be changing), but they are all required by law to cover complications of pregnancy just like any other illness.  Since medical sharing programs aren’t actually health insurance, they don’t have to abide by the rules that mandate coverage for pregnancy complications.

Pre-existing conditions aren’t covered with Medi-Share.

The mental health parity law that was passed  in 2008 has no impact on programs like Medi-Share, and mental health issues are not eligible to be shared by other members.  Neither are any conditions that stem from acts that would be considered un-Christian, such as sex outside of marriage.   HIV/AIDS treatment is only covered if the disease was contracted via transfusion, rape that was reported to law enforcement, or by a health care worker in the line of duty.  Members are not allowed to smoke, use drugs, or abuse alcohol, and conditions resulting from any of those things are not eligible to be shared with other members.

Medi-Share also does not cover routine preventive care.  In Colorado, well-child visits, mammograms and PSA testing are required by law to be covered by health insurance carriers, but since Medi-Share is not a health insurance policy, it’s exempt from the mandates.  Personally, I believe that health insurance should be more about providing a safety net to cover huge medical bills rather than focusing on small, routine, expected expenses.   But it’s something that people should be aware of if they are considering a medical sharing program… actual out of pocket medical expenses might be quite a bit higher than the “annual household portion” simply because of the things that aren’t eligible to be shared with other members.

Out of curiosity, I got quotes on the Medi-Share website for my own family.  We have no interest in joining a medical sharing program, but I was interested in seeing what the difference in price would be.  We currently have a $5000 deductible HSA qualified policy.  For a policy with a $5000 annual household portion, we’d pay about $240/month (including the discount we’d receive for being healthy).  We currently pay $336/month for our health insurance policy.  To me, the extra money we pay to have a policy that comes with written guarantees, a contract, and oversight from the division of insurance is worth it.  Medi-Share’s website states that “Health insurance comes with a contractual guarantee to pay your medical bills. For over 17 years our participants have been faithfully sharing medical bills on a non-guaranteed basis…”  For some people, that bit about no guarantee of payment might not be a concern.  But the reason I have health insurance is to protect our family in the event of a catastrophic illness or injury.  If that were to happen, I want to know that I have a real health insurance company paying my bills, and legal recourse in the event of a dispute.  I like knowing that my health insurance policy is regulated by Colorado’s Division of Insurance, and I like the fact that it doesn’t say “this is not health insurance” anywhere on my policy information.  For that peace of mind, I’ll pay an extra $96/month for my family’s coverage, which does come with preventive care coverage.