Kreidler: Premera doesn't want you to see what's behind your health rates

 

 

Insurance Commissioner Mike Kreidler called out Premera Blue Cross for attempting - again - to gut a bill that would give the public access to health insurance rate filings.

 

"I'm extremely disappointed in Premera," said Kreidler. "Their latest attempt to gut our legislation is very troubling. What don't they want the public to see?"

  

Kreidler's proposal (ESHB 1220) makes the information in a health insurance rate filing public shortly after his office receives it. This includes how much of the proposed rate will go to:

  

• Pay medical claims
• Cover administrative costs -- including salaries
• Profit

 

Kreidler added, "People who pay their premiums year after year -even when their rates go up - deserve to see what's behind those increases. Today, state law prevents me from sharing that information with the public. Now, more than ever, people struggling to pay for health insurance deserve full transparency."

 

Under the latest amendment sought by Premera, the public would see only summaries of rate filings, and only for those filings with increases greater than 10 percent. They could not see the entire rate filing.

 

"Premera's latest attempt to water down transparency is nothing more than a cruel charade on the public," said Kreidler. "Giving people a pre-canned summary of only certain rate filings is meaningless. Washington consumers deserve better."

 

A vote on the bill could come as early as tomorrow.

 

Read the full release and see letters of support from two other major health insurers.

WA insurance commissioner issues more than $167,000 in fines against insurers

Insurance Commissioner Mike Kreidler has fined insurance companies more than $167,000 for violations including wrongly denying medical claims and overcharging customers.
“It’s important that companies follow the law, and when they don’t, we’ll hold them accountable,” said Kreidler. “Consumers, competitors and the marketplace all rely on insurers following the rules.”
In 2010, Kreidler’s office levied $583,750 in fines. Fines collected by the state insurance commissioner’s office do not go to the agency. The money is deposited in the state’s general fund to pay for other state services.
Fines and disciplinary actions so far this year include:
■Aetna Life Insurance Co., of Hartford, Conn., was fined $65,000 for violations, including unreasonably denying 220 claims for acupuncture treatment. The company also refunded $16,427 to policyholders.

■Ace American Insurance Co., of Philadelphia, Penn., was fined $50,000 for violations, including using rates that it had not filed with the state.

■Progressive American Insurance Co., Progressive Northwestern Insurance Co, and Progressive Max Insurance Co, all of Mayfield Village, Ohio, were fined $30,000 for improperly deducting sales tax and fees from cash value calculations in more than 1,700 auto claims. The company also refunded $415,299 to customers.

■Homesite Insurance Company of the Midwest, of Mandan, N. Dakota, was fined $12,000 for overcharging more than 300 policyholders for renter’s insurance. The policyholders are receiving refunds.

■Austin Mutual Insurance Co., of Maple Grove, MN, was fined $10,000 for issuing insurance policies that weren’t in accordance with the rates it had filed with the state. As a result, 324 policyholders were overcharged a total of $26,200. The company also agreed to refund the overcharges to policyholders within 60 days.

■Doctors and Surgeons Benefit Association, of Charlestown, Nevis, West Indies; and several related entities were ordered to stop selling unauthorized insurance in Washington state.

In addition, Kreidler also took the following actions against agents or brokers:
■Mitchell A. Steitz, of Cashmere: License revoked, effective March 31, for misappropriating $12,500 from clients and spending it himself, rather than investing it.

■Allen D. James, of Sumner, agreed to pay a $1,000 fine for failing to promptly pay a premium refund to a client.

For details on cases, please see the agency's disciplinary orders site.

Action dismissed due to failure to comply with Municipal Act notice provision

Zogjani v. Toronto (City), [2011] O.J. No. 1002 (S.C.J.)

In this slip and fall case against the City of Toronto, the City brought a motion for summary judgment on the basis that the plaintiff failed to comply with the 10 day notice period provided by section 44(10) of the Municipal Act. The plaintiff slipped and fell on December 22, 2005 on snow and ice on a Municipal sidewalk. She consulted a lawyer in February 2006 and notice was provided to the City on March 1, 2006. The plaintiff swore that until she met with the lawyer on February 28, 2006, she was not aware of the 10 day notice requirement in section 44. Since the plaintiff failed to comply with section 44(10), it was her onus to show that she fit within subsection 44(12) of the Municipal Act, which provides that the failure to give notice is not a bar to the action if a judge finds that there is reasonable excuse and the Municipality is not prejudiced in its defence.

The City’s argument was that because it did not receive notice of the claim in a timely manner, the City’s investigator was unable to investigate the location promptly and could not observe or record the conditions of the location at the time of the accident. The plaintiff’s response was that snow would have melted in the days immediately following the incident and so even if the 10 day notice period had been met, there was no practical prejudice to the City.

The City’s field investigator swore an Affidavit indicating that he patrolled the area 4 days before the date of loss and 6 days after the date of loss. If he had been notified immediately, he would have been able to recall what the road and sidewalk conditions looked like during his patrols; however, because the City did not receive notice until 2 ½ months later, he was unable to recall what the location looked like at the time of his patrols.

Justice Lauwers was satisfied that the Municipality was practically prejudiced by the effect of the delay on the field investigator’s memory. He granted summary judgment.

At times it may seem that section 44(10) is a limitation period without teeth; however, in the right circumstances and with the right evidence proffered on a motion for summary judgment, section 44(10) can be a useful tool with which to dispose of an action at an early date.

Tom Hanks sues his insurance broker

Actor Tom Hanks and his wife, Rita Wilson, are suing their former insurance brokers of 20 years, alleging that the brokers:

-falsely inflated and overcharged the couple, "misrepresenting the amounts of the premiums on insurance policies"
-"altering insurance documents and related records to conceal their fraudulent scheme"
-"and...taking other acts to engage in, and conceal, their embezzlement scheme through manipulation and deceit."

(All these quotes are from the Hanks' legal complaint.)

How much, you ask? The complaint says "hundreds of thousands, if not millions, of dollars."

How'd they find out? The couple last month got a new broker, who promptly told their business managers "that he was concerned that the insurance premiums from policies in the last year to two years appeared extraordinarily high for the coverage provided."

The complaint also alleges that the brokers illegally issued certificates of insurance without appointments, charged the Hanks for insurance that was never procured (or overcharged them), and bought "unecessarily duplicative insurance coverage," among other things.

Free app helps you create a home inventory

If you're like most of us, you know you need to create a home inventory, but you haven't taken the first step.

The National Association of Insurance Commissioners has just made it easier. They've developed a cool app for your iPhone - and it's free.

The myHOME app helps you capture photos, bar codes and serial numbers of your items. It also organizes the information for you, room by room, and creates a back-up file for e-mailing.

Need health insurance for your kids?

If you'd like health insurance for your kids - don't wait to enroll! You have until April 30 to get an individual health plan or add them to your coverage. (Individual plans are for people who don't get health insurance through their employer).

Until April 30,you can get health insurance for your kids without having them take a health screen.

Use this map to see which companies are available in your county. Then, contact the company directly to enroll. If you have any problems, call our Insurance Consumer Hotline at 1-800-562-6900.

The next chance to get an individual plan for your kids is Sept. 15-Oct. 31. There are some exceptions for people to enroll outside of these time periods. You must apply 31 days after one of the following events:

• You no longer qualify for a state program.


• You lose your coverage due to a divorce.


• You lose your employer's health plan (including COBRA).


• You move and your plan is not available where you live.


• Also, parents or guardians can apply year-round for a health plan with 60 days of birth, adoption.

More tips and what if you miss an enrollment period?

The test for compensable psychological injury

Thank you to Jennifer Stirton for this week's contribution.

The Ontario Court of Appeal has recently confirmed that plaintiffs seeking damages for psychological injury independent of any claim for physical injury are required to show that they suffer from a “recognizable psychiatric illness”.

In Healey v. Lakeridge Health Corp., [2011] O.J. No. 231 (C.A.), the plaintiffs received notices to be tested for tuberculosis as a result of exposure to two infected patients at the defendants’ facility. The plaintiffs alleged that these notices caused them mental anxiety, depression, fear, shock, anger, distress and sleeplessness. They feared for the health and safety of friends and family and temporarily disrupted their social and family lives.

The plaintiffs admitted that the harm suffered fell short of a “recognizable psychiatric illness”. Rather, the plaintiffs alleged that the 2008 Supreme Court of Canada decision in Mustapha v. Culligan, in which the plaintiff found dead flies in an unopened bottle of water and was very upset by the idea that his family had been consuming tainted water, lowered the threshold for compensable psychological injury.

The Court of Appeal concluded that although there were some academic and judicial opinions to the contrary, there is a strong line of authority that to recover damages for psychological injury independent of physical injury, plaintiffs are required to show that they suffer from a recognizable psychiatric illness. The Court of Appeal concluded:

“As has been repeatedly stated in the case law, there are strong policy reasons for imposing some sort of threshold. It seems to me quite appropriate for the law to decline monetary compensation for the distress and upset caused by the unfortunate but inevitable stresses of life in a civilized society and to decline to open the door to recovery for all manner of psychological insult or injury. Given the frequency with which everyday experiences cause transient distress, the multi-factorial causes of psychological upset, and the highly subjective nature of an individual’s reaction to such stresses and strains, such claims involve serious questions of evidentiary rigour. The law quite properly insists upon an objective threshold to screen such claims and to refuse compensation unless the injury is serious and prolonged.”

The Court of Appeal acknowledged that the threshold for compensable psychological injury is the subject of debate and that it could be revisited on a proper factual foundation. For the moment, however, the test for compensable psychological injury remains unchanged.

How do you get tsunami insurance?

How do you get tsunami insurance?

Buy a flood policy.

Earthquake coverage generally doesn't include damage and flooding from a tsunami. But flood policies under the National Flood Insurance Program, a federally run program that insures millions of homes and businesses, do cover tsunami damage. The surge of water is treated the same way as a storm surge from a hurricane would be.

We double-checked this with the NFIP, which steered us to the following definition of flood in the National Flood Insurance section of federal law:

Sec. 1370 (42 USC 4121)

(1) The term “flood” shall have such meaning as may be prescribed in regulations of the Director and may include inundation from rising waters or from the overflow of streams, river, or other bodies of water, or from tidal surges, abnormally high tidal water, tidal waves, tsunamis, hurricanes, or other severe storms or deluge.

The federal flood program has issued more than 5 million policies across the country, insuring more than $1.2 trillion in property. Here in Washington state -- a quake-prone region with hundreds of miles of coastline -- some 51,000 policies are in force. Coverage is particularly heavy in places like Centralia, Aberdeen, King County and Snohomish County.

Here's a plain-language summary of federal flood coverage.

And we should also point out that the federal program does not cover things like business-interruption coverage, which can be crucial for businesses. Also, NFIP commercial coverage maxes out at $500,000 for a building and $500,000 for contents. The good news: insurance brokers can find additional flood coverage for you, often through what are called surplus line insurers.

The Appraisal Process in s. 128 of the Insurance Act

Letts v. Aviva Canada Inc., [2010] O.J. No. 5801 (S.C.J.)

This case deals with the appraisal process in s. 128 of the Insurance Act.

The plaintiffs made a fire loss claim and prepared a 56 page Request to Admit which contained an inventory of items they allege were destroyed or damage by the fire. They argued the insurer was required to specify the items took issue with as a condition precedent to the appraisal process.

Justice James disagreed:

While this may make sense in an appropriate case, I do not agree with the insureds that the insurer must provide a detailed response to the claim of the insureds before being able to invoke the appraisal mechanism contemplated by Section 128 of the Insurance Act.

Section 148 of the Act sets out what needs to be done prior to the appraisal process: a specific demand must be made and proof of loss delivered. Nothing else is required.

WA insurance agent arrested in alleged $1 million theft

Investigators from the Washington state insurance commissioner’s office on Tuesday arrested a King County woman on suspicion of stealing more than $1 million in retirement funds from five elderly insurance clients.

Jasmine Jamrus-Kassim, of Kent, was arrested in Factoria by members of the insurance commissioner’s Special Investigations Unit and the Washington State Patrol. She was booked into the King County Jail on 21 counts of first-degree theft.

“This is an appalling abuse of trust,” said state Insurance Commissioner Mike Kreidler. “Vulnerable people trusted this agent with much of their life’s savings. And she just pocketed the money.”

A months-long investigation by Kreidler’s office found that several of Jamrus-Kassim’s clients repeatedly cashed out large portions of their annuities with Bankers Life and Casualty. Jamrus-Kassim was an agent for the insurer.

“We want to see justice done,” said Kreidler. “We also want to see if there’s any way to make these victims whole. We’re still investigating to what extent Bankers Life may have any liability for the actions of their agent.”

The victims, who ranged from age 74 to 90, typically made out their checks to “S.A. Saad” and gave them to Jamrus-Kassim. Several said they believed that S.A. Saad was an insurance company official. They thought their money was being reinvested.

In reality, Jamrus-Kassim has two daughters, both with the initials and surname “S.A. Saad.” Most of the money was deposited briefly in the girls’ accounts, then moved to Jamrus-Kassim’s personal credit union account. Jamrus-Kassim’s financial records show thousands of dollars spent on clothes, jewelry, and a trip to Mexico. They also show large payments to online psychic advisors, including $20,000 in charges from one psychic website in one month.

In total, Jamrus-Kassim is believed to have stolen at least $1,052,088 from the five victims between late 2007 and late 2009. She returned $25,503 to a 90-year-old Renton woman after the woman complained to the insurance commissioner’s office. That’s one of two complaints that triggered the state investigation.

Jamrus-Kassim submitted a letter of resignation to Bankers Life on Jan. 13, 2010.

Subsequent investigation by state insurance officials found three other victims. Last week, investigators interviewed an 83-year-old Seattle man who had no idea that Jamrus-Kassim had taken his $352,000.

Want a health plan for your kids? Enrollment starts today

If you're looking to add your children to your own individual health plan or want to buy health insurance for your children, you have from today through April 30 to do so.

Be sure to apply early. In most cases, applications received after March 20 will not have coverage until May 1.

This is the first of two open-enrollment periods this year for children in the individual health insurance market -- the second is from Sept. 15-Oct. 31. During these times, health plans cannot screen children or deny them coverage because of a pre-existing medical condition.

Federal health care reform prevents health insurers from deny coverage to children because of a pre-existing medical condition. However, individual plans -- like most employer-sponsored health plans -- can create open-enrollment periods.

If you need a health plan outside of the enrollment dates, you can apply either to the Washington State Health Insurance Pool (WSHIP), or if you qualify, to the new Pre-existing Condition Insurance Plan (PCIP-WA).

Exceptions where you can apply for individual coverage anytime include the birth or adoption of a child or if a child or parent:
No longer qualifies for a state program.

• Loses coverage due to a divorce.
• Loses employer-sponsored coverage (including COBRA).
• Moves and their plan is not available where they live now.

In 2014, when the full federal health reforms take effect, no one of any age can be denied health insurance because of a pre-existing condition.

What a Seattle tsunami would look like

Due to a spike in visits, we're reposting this post:

The experts say it's inevitable that the Seattle area will be hit with another tsunami similar to the one from 1,000 years ago. Here's a computer-generated video of what a tsunami hitting Seattle would look like:

(video courtesy of NOAA's Center for Tsunami Research)

The animation assumes a magnitude 7.3 quake on the Seattle Fault.
Here are similar projections, based on a 9.1 quake, for Long Beach, Ocean Shores, and Bellingham, all modeled on a quake similar in size to what Japan experienced last week. (These are very big files; give them plenty of time to load. Smaller, less-detailed versions are at the NOAA link above.)

Daylight savings time: Move your clocks AHEAD 1 hour

OK, so this has nothing to do with insurance. But just a friendly reminder: Daylight Savings Time begins at 2 a.m. Sunday.

Don't forget to move your clocks ahead 1 hour.

Why to wear your seatbelt

A British team put together this extraordinary video to encourage people to wear seat belts. It's a big change from the scary crash ads we've all seen -- and it's probably more effective.

What a tsunami would look like in Seattle

The experts say it's inevitable that the Seattle area will be hit with another Tsunami similar to the one from 1,000 years ago. But now we have the technology to show you what it would look like.

(video courtesy of NOAA's Seattle Inundating Mapping Project)

Tsunami and insurance - what's covered

A Tsunami advisory was issued today in response to Japan's 8.9 earthquake. An advisory means that a tsunami capable of causing strong currents or waves dangerous to people near the coast is expected --- although widespread flooding is not expected.

What counties are affected? Check Washington's Emergency Management Division site for specific county information.

If you're concerned about property damaged by flooding or high waves, the National Flood Insurance Program has helpful information on:

Preventing flooding around your home
Sandbagging
Pumping out a flooded basement
Protecting your home from back flow
Cleaning up and drying out your home

Unfortunately, if your home, business or property is damaged by increased waves or flooding, your typical homeowner's policy or commercial policy most likely will not cover it. You must have a flood insurance policy from the National Flood Insurance Program

Learn more about flood insurance, See if your home or property is in a flood zone and if so, what's your level of risk.

"My dog was hit by a car. Will the driver's auto insurance cover the vet bills?"

Here's what happened: A woman was walking her dog. Both got hit by a car. Both survived.

The woman's medical bills were covered by the driver's Personal Injury Protection (PIP) coverage. (This is a little-known fact, by the way: PIP also covers pedestrians.)

But for the dog, the insurer only offered what it considered the animal's value: $75. The company wouldn't pay the veterinary bills for the badly injured dog.

The sad fact for pet owners is that under insurance law, pets are considered personal property. An auto policy's medical coverage doesn't cover pet injuries. Under the law, it's as if the driver had struck a mailbox. The company estimates the value of the personal property, then offers to pay that amount.

That said -- and this is not legal advice -- the owner might be able to sue the driver for the dog's medical expenses, as they are part of the dog owner's damages and may be covered under liability for property damage. But the owner would have to weigh the costs involved.

And if the animal was a fancy show dog, for example, the owner could likely prove a higher value for the dog. Our Consumer Advocacy folks once helped intervene to get a higher insurance payment for a dead goat.

The key point, however, is probably this: It often pays to buy health insurance for a pet. Here in Washington state, 11 insurers sell a total of 39 different policies covering pets. Some cover accidents only. Others include annual physicals, vaccines and cancer coverage. Most cover only dogs or cats; one company also offers coverage for birds and exotic pets. Every policy offers a multi-pet discount, and some offer discounts for pets with a microchip, etc.

What's it cost? According to the rates they've filed with our office,

• Coverage for cats ranges from $83 to $926 a year; most policies are $150-$250 annually.
• Coverage for a dog ranges from $107 to $1,059 a year, but most coverage is between $225 and $400 annually.

Proportionality in Discovery

Master Short recently conducted an exhaustive review of the principles of proportionality in discovery. In Warman v. National Post (2011), 103 O.R. (3d) 174 (S.C.J.), the defendant brought a motion seeking production of a mirror copy of the plaintiff’s computer hard drive. The action was a libel action brought under the Simplified Procedure.

Master Short held that the new rules changing the test from “relating to” to “relevant to” a matter in issue signal a shift away from the broad and liberal discovery practice that has existed in Ontario. The default rule should start with proportionality and a recognition that not all conceivably relevant facts are discoverable in every case. Master Short adopts an eight factor proportionality test for e-discovery used in an American case (Rowe Entertainment v. William Morris):

1. The specificity of the discovery requests;
2. The likelihood of discovering critical information;
3. The availability of such information from other sources;
4. The purposes for which the responding party maintains the requested data;
5. The relative benefit to the parties of obtaining the information;
6. The total cost associated with production;
7. The relative ability of each party to control costs and its incentive to do so;
8. The resources available to each party.

Master Short held that although relevancy should remain a threshold requirement, proportionality should replace relevancy as the most important principle guiding discovery.

This decision will no doubt garner attention as a guideline for discovery. It will be interesting to see if the eight factors become the new standard for discovery in general or limited to e-discovery.

Bill to end secrecy of health insurance rate info passes WA House

A bill that would let the public see far more health insurance rate information has passed the Washington House of Representatives.

Under state law, Washington Insurance Commissioner Mike Kreidler's office is now barred from releasing virtually all the information that insurers submit to justify premium increases. House Bill 1220 -- requested by Kreidler -- would end that secrecy.

"In today's tough econmic climate, people deserve to see where their money's going," said Kreidler

Here's a link to a press release about the bill.

Power restored at our main building

Just fyi: Our main office in Tumwater, lost power at about 9:19 this morning. It's still out. Many of us are working on backup power.

UPDATE: Power's back on. (10:30 a.m.) This post headline originally said "Power's out at our main building."

Washington to get $500,000 from AIG settlement

Washington state will receive $500,000 as part of a multi-state settlement with American International Group, Inc., better known as AIG.


The settlement includes a $100 million fine, divided among the 50 states and the District of Columbia. The company will also pay roughly $46.5 million in additional taxes and assessments. It also agreed to follow a compliance plan designed to fix the problems uncovered in a multi-state probe.

At issue was the company’s pattern of failing to comply with laws related to their handling of workers’ compensation programs. An examination team found a pattern of widespread violations, including using rating plans that hadn’t been filed with regulators and false reporting of the insurance premiums from workers compensation.

Although Washington state provides workers compensation coverage through a state-run program, it became part of the process because it was uncertain if the premium re-allocation would affect the state.

The $500,000 settlement does not go to the insurance commissioner’s office. The money will be deposited in the state’s general fund to pay for other state services.

Job opening: Receptionist

Due to a retirement, we have a job opening for a receptionist.

The person will greet and help visitors and customers visiting our building, as well as answering the main phone line and provide first-tier assistance for people. The person will also analyze service-of-process papaerwork, assist with mail, scan documents, and other duties.

For a more detailed description, please see the job description. Applications are due by Monday, March 7, at 5 p.m.