Anthem charges the same premiums regardless of whether a policy is new or has been in force for several years.  A 40 year old, healthy, non-smoking male who purchases a policy this month will be paying the same premiums as a 40 year old healthy non-smoking male who has had an Anthem policy for ten years, assuming they both live in the same zip code and have the same type of policy.  Because of this, it’s relatively easy to compare Anthem’s rates – even after rate increases go into effect – with those of other carriers in Colorado.  The rates being offered to new Anthem clients include the rate increases that went into effect in January.

To get an idea of how Anthem’s prices compare with other carriers, I got quotes for a family of three, living in the Denver metro area, for a high deductible, HSA-qualified policy with 100% coverage after the deductible.  These plans are relatively easy to compare, as they tend to be quite similar from one company to another.  I looked for policies with a $5000 or $6000 family deductible (most companies offer one or the other, but not usually both), or something in the middle of that range if neither exact number was available.

Here’s what I found, from several of the top carriers in the Colorado individual market:

• Cigna = $325 (for a $6000 deductible)
• Anthem Blue Cross = $377 (for a $5000 deductible)
• Humana = $402 (for a $5000 deductible
• Kaiser = $441 (for a $6000 deductible)
• Assurant/Time = $449 (for a $5700 deductible)
• United HealthOne (Golden Rule) = $461 (for a $5800 deductible
• Aetna = $481 (for a $6000 deductible)

Obviously this isn’t comprehensive data.  I only got quotes for one family, using a single zipcode.  Factors like pre-existing conditions, tobacco use, zipcode, and plan design all have an influence on premiums.  But these numbers would seem to indicate that while Anthem’s rate increase may have been large, it seems to be in line with what other carriers are charging in Colorado.  For the little test I conducted, Anthem’s premium was the second-lowest I found, and the only one with a lower premium had an additional thousand dollars in out of pocket exposure.

I’ll be curious to see what the Division of Insurance comes up with when they re-evaluate Anthem’s 2010 rates.  My guess would be that they will approve the rates.  If they don’t, it would stand to reason that they will have to also re-evaluate the most recent rate increases for all of the other carriers in Colorado too.

I like the compromise that the revised bill would create.  It will definitely expand access to maternity care for women in Colorado.  Right now, there are three health insurance companies here that offer maternity care:  Assurant, United HealthOne, and Rocky Mountain Health Plans.  The RMHP maternity option is very expensive.  The United HealthOne option isn’t terribly pricey, but the benefits are low for the first couple years after the policy goes into effect.  The Assurant policy is the most popular among our clients, but it requires that the client meet a separate maternity deductible before benefits begin.

For a woman in Colorado who does not have an option for group health insurance and is contemplating pregnancy, the choice is either to opt for paying for the pregnancy out of pocket (complications are covered on all policies), or to switch to one of those three health insurance companies that offers maternity benefits.  Most of the big-name health insurance companies – Anthem Blue Cross Blue Shield, Aetna, Cigna, Humana, Kaiser, etc. – wouldn’t be an option for her at all if she wants to have maternity benefits.  Right now, if a woman has her heart set on using a particular health insurance company and also on having maternity coverage, she’s likely going to have to pick one or the other.  If HB 1021 requires each insurance company to offer at least one policy with maternity benefits, the number of options available to women seeking maternity coverage would increase dramatically.  I have to assume that the increased competition would help to lower costs for this coverage.  It also  makes sense that if women had more options for coverage, more women would likely elect to add maternity to their policies, thus increasing the pool of insureds with maternity coverage, further driving down costs.

It would be nice to see more options available for our clients who are looking for maternity coverage.  My preference would be if clients could select their health insurance policy based on all of the other features of the plan, and then add maternity benefits after they had settled on a policy, rather than choosing a policy by default simply because it is one of a very few options that offer maternity benefits.

I can see both sides of this issue, but with all of the technological advances we’ve made over the last decade, it seems that something as simple as communication between hospitals and health insurance companies regarding patient admissions should be a simple, electronic process by now, with no clerical errors or staffing issues involved.  If astronauts can update their status on Twitter from the space station in real time, we should be able to devise a system that allows for instantaneous notification for health insurance carriers when an insured is treated or admitted to a hospital.

What if our health insurance ID cards came with barcodes that could be scanned in the doctor’s office or hospital, immediately allowing the office staff to see our benefits, how much of our deductible still needs to be met, and any exclusions on our policy?  Then admission and treatment data could be transmitted directly to the health insurance carrier, without the need for phone calls or extra staff.  Rather than having different scanners and transmittal systems for each insurance carrier, it would make sense for this to be a standardized system, with one system that would be able to transmit data to all of the  major health insurance carriers.  This isn’t a far-fetched idea – think of credit card processing systems.  Visa, MasterCard, American Express and Discover are privately-owned companies that are fiercely competitive with each other.  Yet a store owner does not need a separate processing system for each card.  When you pay at the gas pump with a credit card, the processing system can identify what type of card you’re using, transmit the data to the correct company, check to make sure you have available credit on your card, and authorize the transaction, all within a few seconds.  Visa doesn’t have to wait around for 24 hours before they find out that I bought some groceries today.

There has been a lot of talk about bringing our medical information system into the 21st century lately, and this battle over notifications is a perfect example of how the health care industry is lagging behind a lot of other sectors in terms of electronic data storage and transmission.

All three of these changes sound good at first glance, but the first two are not as cut and dried as they sound.  Ending gender-based pricing in the individual market would likely result in lower premiums for women, but higher premiums for men.  In Colorado, men are more likely than women to be uninsured, and raising their prices would almost certainly mean that more of them would drop their coverage.

Adding reproductive services also sounds like a good idea, but it depends on how much it would increase premiums, as many people already struggle to afford their health insurance.  For people like me, who choose to have homebirths with midwives, would we be paying for maternity coverage and still paying out of pocket for our midwives?  Would people who choose to adopt or not have children be forced to pay for maternity coverage?  Would people who would rather have a high-deductible, HSA qualified policy still have to pay for maternity coverage?  There are a lot of questions around this topic, and I still haven’t seen any solid data indicating how much health insurance premiums would increase if reproductive services were included on all policies.  Group policies in Colorado are required to cover maternity care, and the premiums are far higher than individual policy prices.  But group policies are also guaranteed issue, and it’s hard to tell how much of the premium difference has to do with underwriting and how much has to do with things like maternity care being covered on group plans and not on individual policies.  Currently there are only a handful of individual carriers in Colorado that offer maternity coverage (Rocky Mountain Health Plans, Assurant, and United Health One), and with all of these carriers, the addition of maternity coverage makes the policy significantly more expensive.  Obviously the premium difference wouldn’t be as dramatic if the coverage price were spread across the whole population via a mandate, but I am concerned that it might not be a small rate increase.

The bill that would require standardized EOBs does have my support, as does any legislation that would make health insurance benefits and claims information easier to understand and compare.  Anything that can reduce the amount of time that medical offices and consumers spend trying to figure out benefits and claim information will ultimately make our health care system more transparent and efficient.

If you have an opinion one way or another on these or any of the other bills that were introduced this week, now is the time to contact your representative.

When our son was born, we opted for a homebirth with two registered midwives.  We had to pay for their services ourselves, since we have an individual health insurance policy that doesn’t cover maternity (none of the individual carriers in Colorado that offer maternity coverage will pay for a homebirth – this is also the case with most group plans that cover maternity).  We received fantastic prenatal care throughout my pregnancy and delivery, and the $3000 that we paid was well worth it.  And since we don’t pay for maternity care on our health insurance policy, it made sense that we would pay for our midwives’ services ourselves.  If complications had arisen, our health insurance policy would have kicked in, as all policies in Colorado – individual and group – cover complications of pregnancy.

New mothers and infants account for nearly a quarter of all patients discharged from hospitals, c-sections are the most commonly performed surgical procedure in the US, and maternity and newborn care amount to more hospital charges than any other type of care.  If health care reform ends up mandating that maternity care be included on all individual health insurance policies, there is no doubt that it will lead to increased premiums.

If we decide to have another child, we will most definitely opt for another midwife-attended homebirth.  We would expect to have to pay for it ourselves, but I would be extremely frustrated if we were also having to pay for maternity care on our individual health insurance policy at the same time.  I hope that if maternity care becomes a requirement on individual health insurance policies, it will cover both OBs and midwives, wherever a woman chooses to give birth (hospital, birth center, or home).

Amy Romano has written an outstanding article comparing modern American maternity care with SUVs.  Since maternity care takes up such a huge portion of our health care budget, this article is a worthwhile read for anyone concerned about the spiraling cost of health care.  Hopefully the points that Amy makes will be taken into consideration when lawmakers decide what services should be covered by all health insurance policies.

I found Amy’s article in Grand Rounds, very creatively hosted at Florence dot com.

I’ve been thinking about this for the last couple days.  First of all, health insurance companies have some work to do in the public opinion department.  So it is a bit of a mystery to my as to why the executives who met with congress were so adamant that rescission not be limited to cases of intentional fraud.

But the flip side of the issue is that it’s tough to really differentiate between intentional fraud and accidental omission.  The only person who really knows what an applicant’s intentions are is the applicant.  Do we use the “reasonable and prudent person” idea here?  Would a reasonable and prudent person forget that she had been hospitalized or taken to the ER?  Probably not.  Might she forget that she had been treated for a sinus infection six years ago?  Perhaps.

When I was new to the health insurance business, I remember hearing a story about a lady who “forgot” to mention on an application that she had emphysema.  She was later diagnosed with cancer and her policy was rescinded.  There is no part of me that believes that a person with emphysema could answer “no” to the question about lung/respiratory conditions and chalk it up to an accidental omission.  Health insurance applications are designed to eliminate accidental omission as much as possible.  There are health questions relating to pretty much every body part and organ system.  And then there’s a catch-all question at the end, asking for details about any conditions not specifically mentioned.  Any illness that required more than a passing glance from a doctor would be tough to forget when answering such specific questions.

Some people do lie intentionally when completing health insurance applications.  These people might not realize that rescission is a possibility, and might not understand what a dicey situation they’re putting themselves in.  In Colorado we have a high risk pool health insurance policy that is available for people who don’t qualify for individual health insurance.  Cover Colorado is far superior to getting an individual policy based on a fraudulent application.

Another problem is bad agents.   Over the years we’ve spoken with numerous clients who tell us that they have condition XYZ, but mention that their last agent told them that they didn’t have to list it on their application.  I have no idea what these agents are thinking.  All of us know about the possibility of rescission – it’s a basic part of health insurance license training and continuing education.  I don’t know if these agents are just trying to secure their own commissions, or if they honestly think that the condition is minor enough that it doesn’t need to be listed, or if they think that not listing it will make the process easier for their clients.  But no agent should ever tell a client to leave anything off of an application.  If a condition is minor enough to not be an issue, the underwriters will dismiss it.  But that is a decision for underwriters, not agents or applicants.  Any other course of action is way too risky.

The waters get pretty murky when it comes to looking at an application and determining what an applicant’s intentions were.  Did the person set out to deceive the insurance company?  Were they completing the application at the end of a long day, with a crying baby and a kid who needed help with homework?  Did one person complete the application for an entire family, and forget to mention a treatment that a spouse had several years ago?  Did they ask their agent for advice and get told that they could just not mention the condition on the application?

Several years ago, I spoke with a representative from Anthem Blue Cross Blue Shield about the issue of policy rescission.  She told me that – at least here in Colorado – rescission is reserved for serious cases where significant conditions are left off of applications, and that had the conditions been revealed during the application process, coverage would have been declined.  To me, this seems fair.  If a pre-existing condition is revealed after the approval process is complete, it should be underwritten just as it would have been if it had been noted on the application.  Trying to determine whether an applicant intentionally lied or genuinely forgot would just be speculation anyway.

Electronic medical records that allow underwriters to see complete medical histories at the time of application would greatly reduce the number of policy rescissions.  Then again, there’s a lot of talk on the table right now about eliminating medical underwriting all together, which would solve the problem once and for all.

The point is, there really is no one-size-fits-all when it comes to health insurance.  In terms of health care reform, unless someone just starts handing out free health care (without tax increases or premiums…), it will be tough to get people to agree on a single plan, or even a handful of coverage options.

Each state has its own regulations in terms of what all policies in that state have to cover.  The rules are different for group and individual health insurance.  In Colorado, for example, all policies have to cover well-child care, PSA testing and mammograms (based on age).  All group plans have to cover maternity, but individual plans do not.  There are a handful of individual carriers in Colorado that do offer maternity as an optional benefit (Assurant, United HealthOne, and Rocky Mountain Health Plans) but the majority of individual plans do not.  This is because the state doesn’t require it, and the market won’t support it (the premiums are expensive, and very few people choose to pay the extra premiums for maternity care on individual health insurance policies).

For people who get their health insurance coverage from their employer, there aren’t likely to be a lot of choices in coverage, but the employer is probably subsidizing a good chunk of the premiums, which makes it easier to accept whatever is offered.  For people buying health insurance in the individual market, there are lots of options, but pricing and medical underwriting can often limit the choices.

Bill Kramer has written an article about the issues involved in designing a national benefit plan.  Overall, the process and compromises involved sound a lot like what goes into designing private health insurance policies: a delicate balance between cost and coverage, targeting the widest consumer group possible.  The major advantage that the private health insurance market has in this regard is that it can implement a wide range of options, with policies ranging from bare-bones catastrophic coverage to very comprehensive “gold-plated” coverage.

If health care reform ends up involving a public, national health insurance option, it would be wise for them to offer multiple plan designs in order to give people choices in terms of premiums and coverage.  Otherwise, it’s unlikely to appeal to a large number of people.

I found Bill’s article in the Health Wonk Review, hosted this week at Health Care Policy and Marketplace Review, written by Robert Laszewski.

Jaan points out that state health insurance regulations have thus far kept health insurance carriers from getting too big; they tend to be somewhat fragmented by states or by regions, rather than being national entities.  But his concern is that if a public plan were introduced to compete with private health insurance, there would likely be a rash of mergers in the private health insurance sector, leading to bigger, national companies that might indeed become “too big to fail.”

From the perspective of working in the health insurance industry, I can say that there are already plenty of national health insurance companies.  Companies like Cigna, Aetna, United Healthcare, and Humana are all national carriers.  This doesn’t mean that they offer policies in every state, but they have policies in many states – typically all of the states with regulations that fit their business model.  The Blue Cross Blue Shield plans are often misunderstood in that people think of them as one national company when this is not the case.  The “Blue” name is licensed by health insurance carriers in different states or regions, with the carriers being entirely separate companies from one state (or region) to the next.  For example, here in Colorado, Anthem is the health insurance company that has licensed the Blue Cross Blue Shield name.  So in Colorado, Anthem is synonymous with Blue Cross Blue Shield.  There are several other states where Anthem BCBS offers health insurance, but in each state the policies are different to comply with the state’s specific regulations.

In addition to the smaller, regional health insurance companies, there are plenty of national carriers.  A HumanaOne policy in Colorado will have different underwriting guidelines, different pricing, and different coverage than HumanaOne policies in other states.  But all Humana policies are issued by the same company.  So while the Blue Cross Blue Shield name is licensed by numerous health insurance carriers across the country, and while there are plenty of small state and regional health insurance companies in operation, many of the big name health insurance carriers are already national corporations.

I think that Jaan’s prediction of mergers following the introduction of a public health insurance program is probably very accurate.  Since a public health insurance plan would have an economies of scale advantage over private carriers, it would make sense that the private carriers would want to emulate this model as much as possible.  Mergers and buyouts would be the obvious way for big private health insurance companies to rapidly increase their membership numbers.  Although such mergers would have to comply with anti-trust regulation, which might limit their scope.

I would argue that instead of being considered too big to fail, major health insurance carriers might be seen as too important to fail.  A behemoth  like AIG can be seen as too big to fail simply because of the scope of their reach – nearly all Americans would have been indirectly impacted by the failure of AIG.  But while AIG’s collapse would have been primarily indirect (ie, it would likely have delivered a devastating blow to the financial industry as a whole), health insurance companies work directly with individual Americans.  Even when a group policy is set up through a large employer with thousands of employees, the individual employees are the ones who carry the id cards with the insurance carrier’s logo on them.

As Jaan pointed out in his article, health insurance carrier profits aren’t as healthy as they once were.  But overall the companies are still doing all right, despite the pounding that the economy has been taking for the last year.   Now imagine for a minute that this were not the case.  If a small health insurance company were to fail (leaving its insureds high and dry), it would certainly create regional ripples, but might go largely unnoticed on the national radar.  But I honestly cannot imagine a large, national health insurance carrier going under.  If any of them seemed to be heading in that direction, I have to assume that the government would intervene, either arranging a merger with another health insurance company or providing some type of bailout.  With more than 47 million people currently uninsured, I doubt that the government would stand by and watch the number of uninsureds spike upwards because of the failure of a major health insurance carrier.

I think that at this point, the taxpayers are sick of the idea of bailouts, and corporations know that getting them in the future will be much more difficult.  There will be more concessions involved, and companies will likely see bailouts as a last resort.  I’m glad that health insurance carriers have weathered the economic storm better than some of the rest of the insurance industry, and I hope this continues to be the case.

I found Jaan’s article in the Health Wonk Review, hosted last week at Pizaaz.  Not only are there plenty of great articles, but the introduction to the HWR deserves a read as well.

A friend of mine who lives in a smallish Colorado town had a c-section with her first baby after 45 hours of labor.  She wanted to try for a VBAC with baby number two, but was told that she would have to go to Denver a month before her due date and stay near one of the big metro hospitals until she gave birth.  Between her job and taking care of her toddler, that wasn’t a particularly viable option, and so she had a repeat c-section.  In fact, several of my friends had c-sections with their first babies, and all have gone on to have repeat c-sections.  They were all warned ominously that they could suffer uterine rupture if they opted for a VBAC, but none of them mentioned anything about the issues that Kathy raised in her article.

United HealthOne has changed the way they underwrite applicants in Colorado who have had a c-section.  They now charge an additional 30% on top of the standard premiums in these cases.  All health insurance carriers in Colorado cover “complications of pregnancy”, but most of them do not consider c-sections to be complications.  United does consider c-sections to be complications, but only if they are emergency c-sections (ie, not scheduled).  Since most OBs schedule repeat c-sections, it’s rare that a woman would end up with an unplanned, emergency repeat c-section.  So I was a bit perplexed by the new underwriting actions.  But after reading Kathy’s article and learning about the problems that can occur in a subsequent pregnancy following a c-section, it makes more sense.

I found Kathy’s article in the Cavalcade of Risk, hosted last week at Healthcare Manumission.