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Monday, November 01, 2010

Ind. Gov't. - Three health insurance stories of interest

(1) "Insurance 'death spirals' remain full of life: State seems at a loss to keep companies from closing plans, which drives up premiums" is the headline to a lengthy, front-page story today by Daniel Lee of the Indianapolis Star. A few quotes:

Nicholas Peppler, Fort Wayne, was healthy and only 23 years old, but he appeared to be in the beginning of a death spiral. * * *

Peppler discovered evidence of a death spiral in January, when Anthem, part of Indianapolis-based health insurance giant WellPoint, notified him that his premium payment would rise by 32 percent -- far more than the estimated 17 percent or less for similar Anthem plans.

His father, an actuary who understood the inner workings of the individual health insurance market, filed a complaint with the Indiana Department of Insurance.

Said the father, David Peppler: "I just kind of wanted them to hold Anthem's feet to the fire."

But the Department of Insurance upheld Anthem's hefty rate hike.

The decision reveals weaknesses in the way Indiana and many other states regulate the individual health insurance industry. Untold thousands of Hoosiers are paying a price for the state's inability or unwillingness to deal with closed-block death spirals.

Insurance regulators here are aware of the problem, but they admit they do not have the answers. And even if they did, some say they are not adequately staffed to carry them out. * * *

So, for the foreseeable future, death spirals appear to be a fact of life in Indiana. * * *

The individual insurance market will fundamentally change as part of health-care reform -- including in 2014 the creation of exchanges for consumers to buy policies and the requirement that insurers accept applicants with pre-existing conditions.

"Ideally that should make that a problem of the past," said Alwyn Cassil, spokeswoman for the Center for Studying Health System Change. "What you're doing is creating a marketplace where underwriting is not the name of the game any more."

That is, if the law survives attacks from those who would repeal or alter it. Much could happen before 2014.

(2) "Insurance Commissioners Loom Large In Health Law" is the headline to an NPR Morning Edition story today by Sarah Varney. Some quotes:
Voters don't give much thought to who runs their state department of insurance. But as key provisions of the new federal health law begin to take effect, the insurance commissioner will become the king of a much bigger kingdom. * * *

"With the insurance market reforms, it's really going to be important for states to take a proactive role in responding to any problems that come up and making sure plans are complying with the law," says Sabrina Corlette, a health policy researcher at Georgetown University.

She says that under the federal health law, state insurance chiefs will have a long list of new consumer protections to enforce. For example, starting in 2014, health plans can't charge women or sicker people more.

They're also helping to write the regulations for their own expanded powers. Congress left it up to an obscure group — the National Association of Insurance Commissioners — to essentially decide critical details, such as what health plans can claim as actual medical care vs. administration and profit.

Corlette says this decision made these humble regulators very popular with industry lobbyists at their spring meeting.

"I was stunned to discover that there were about 17 consumer representatives that were focused on health care, compared to over 1,000 different insurance industry representatives," she says.

Consumer advocates and industry officials say once the rules are written, state regulators will have to crack down on health plans looking to exploit fuzzy rules or weak enforcement. At the same time, if they're too heavy-handed, the plans might leave the market.

All of which means state insurance chiefs could very well play a key role in whether the federal health overhaul flies or flops. Laurie Sobel, a senior attorney with the consumer advocacy group Consumers Union, says it matters how the insurance commissioners view the new federal health law.

"If you have one that really doesn't want to enforce it, then consumers are going to need to fight it every step of the way," Sobel says.

(3) "Indiana AG Sues WellPoint Over Breach: Civil Suit Alleges Delay in Notification." This story has appeared locally and appears today at HealthcareInfoSecurity.com. It begins:
Indiana Attorney General Greg Zoeller has sued health insurer WellPoint Inc., alleging the firm took too long to notify Indiana residents affected by a health information breach.

The attorney general alleges that about 32,000 people were not notified of the breach in a timely manner as required under state law. Indiana law requires businesses to notify both the individuals potentially affected by a data breach, as well at the attorney general, "without reasonable delay."

Zoeller is seeking $300,000 in civil penalties. * * *

Applications for insurance policies submitted to WellPoint Inc., which contained Social Security numbers as well as financial and health information, were potentially available to the general public through an unsecure website for at least 137 days between October 2009 and March 2010, according to a statement from the attorney general.

WellPoint was notified on Feb. 22 and again March 8 that the information was available on the site, but it did not begin notifying customers of the breach until June 18, the attorney general says. Following news reports of the breach in June, the attorney general's office submitted an inquiry to WellPoint and received a response on July 30. The attorney general is calling the delays in notice to customers and its office "unreasonable."

The office confirms, however, that it has not received any consumer complaints relating to identity theft as a result of the breach. But it's continuing an investigation of the incident.

Posted by Marcia Oddi on November 1, 2010 01:19 PM
Posted to Indiana Government