Congress, Obama Toil to Help Jobless Get Health Care

Congress and the incoming Obama administration are contemplating profound shifts in the government's role in health insurance to try to alleviate a significant ripple effect of the damaged economy: Americans losing health coverage as they lose jobs. As part of a sprawling $825 billion strategy to heal the economy that House Democrats laid out this week, lawmakers and transition officials envision a two-prong approach to help unemployed people retrieve health benefits. One would reshape a basic entitlement program, allowing states temporarily to sign up jobless residents for Medicaid, with the federal government for the first time paying the entire cost. The other proposal would provide unprecedented federal subsidies to help people afford coverage under COBRA, a law that allows some laid-off workers to buy health benefits that they used to get through their jobs. The twin ideas, preliminarily estimated to cost $39 billion through the end of next year, would represent sharp departures in two long-standing programs and already are sparking debate along the ideological continuum on Capitol Hill and beyond. In Congress, several key Democratic House members and senators have endorsed the broad contours, while a few Republicans, including Senate Minority Leader Mitch McConnell (R-Ky.) have signaled that they are wary. Debate, however, will not solidify until lawmakers learn more precisely how much the proposals would cost and how many people they might help. Among outside health policy specialists, conservatives are critical of expanding an entitlement and are predicting that states would have a hard time shutting the spigot of help once the federal money stopped. Liberals are predicting that, even with the large federal investment, coverage could remain unaffordable for too many people.

Dallas police connect to statewide car insurance database

Dallas police have given no grace period to uninsured drivers this year as they enforce the new towing ordinance. Those pulled over for traffic violations get their cars towed on the spot. As of Friday, 256 vehicles had been towed as a result. Dallas police also say they've now connected to the Texas Insurance Database, which contains license tag information on those with insurance. "In cases where there is an "Unconfirmed" response, officers will continue to use additional measures such as contacting insurance companies directly to verify insurance," said a recent DPD news release.

Health insurance unaffordable for most who get laid off

The cost of paying for continuing family health insurance consumes most unemployment insurance payments for those laid off, according to a new report.
Continuing family health insurance coverage after being laid off consumes 84 percent of employment benefits nationally, according to a new report by Families USA, a health care think-tank.

In Wisconsin and 40 other states, paying for such health insurance coverage consumes 84 percent of unemployment benefits.

Single people do not fare much better. In Wisconsin and 16 other states, the cost of continuing single health insurance coverage consumed more than one-third of unemployment insurance income.

Des Moines area insurance companies plan merger

Two Des Moines area insurance companies have signed a letter of intent to merge.

West Des Moines-based Homesteaders Life Co. and American Enterprise Mutual Holding Co. of Des Moines will merge under the plan, with Homesteaders' seven board members joining American Enterprise's board.

American Enterprises is the holding company of American Republic Insurance Co. in Des Moines and Omaha-based World Insurance Co.

Homesteaders is the nation's second-largest provider of burial insurance. American Republic is a provider of health savings accounts and Medicare supplement insurance. American Republic has 548 employees in Des Moines. Homesteaders has 129 workers in the Des Moines area and 33 field employees nationwide.

Insurance denial can seem arbitrary

Three years ago, Ivy Emery left her job at Aveda Corp. to work as an independent hair stylist at an Uptown salon.

No longer covered by Aveda's group health insurance, Emery applied for individual coverage for her husband and herself. Her husband, a self-employed construction worker and a smoker, was accepted. Emery, then 32, was rejected.

The denial letter from Blue Cross and Blue Shield of Minnesota listed three reasons: She was using topical medication for acne, she had once sought emergency care for a migraine and she was on Paxil, a drug for anxiety and depression.

"It was just insane," she said, her voice rising at the memory. "They wrote 'acne.'"

An outraged Emery found herself a member of a club nobody wants to join: the Uninsurables.

It's a bigger club than you might think. Each year, one in six Minnesotan applicants for health insurance in the individual market is denied coverage because of a variety of pre-existing conditions.

The market is small but growing fast.

In 2002, there were 192,942 enrollees, or 3.8 percent of Minnesotans, in the individual market. By 2007, the number had climbed to 246,190, or 4.7 percent of the population.

Most Minnesotans have never ventured into the individual market, but if they did they might be surprised by its rules.

"Once you get individuals out there trying to shop for insurance, the [companies] will slice and dice those people, take the healthy people and charge them for whatever package," said Judy Waxman, a vice president at the National Women's Law Center in Washington. "This is why we want to get away from people being judged individually. It's not really insurance."

Ironically, the conditions that can cause a denial are sometimes the very reasons why consumers seek insurance in the first place.

In Minnesota, the most common reasons for denial are obesity, mental health conditions, hypertension, diabetes and cardiovascular disease. But there are less well-known reasons insurers consider on a case-by-case basis: chemical dependency, allergies that require costly injectable drugs, a previous C-section, previous use of infertility medicine or something as simple as being pregnant.

Blue Cross and other insurers say they face a dilemma. If they took in too many sick people, they'd have to raise everyone's premiums.

"We understand people are going to be very upset and surprised [when they get denied]," said Craig Ashby, director of individual products at Medica, the state's second-biggest health insurer after Blue Cross. Denials help ensure a "competitive price for the vast majority of people," he said.

In states such as New York, where insurers are required to take all applicants, healthy people sometimes put off buying insurance until they get sick. The result: Premiums tend to be higher for everyone, according to a study commissioned by America's Health Insurance Plans. The association is urging the Obama administration to consider a system in which insurers must accept all applicants but all consumers must buy insurance.

Group vs. individual

About two-thirds of Minnesotans get group coverage through their employers, where health is not a factor for coverage. The rest are covered by federal and state plans, by policies in the individual market, or simply are uninsured.

But many employers are asking employees to pay more of the cost, to the point where some employees are dropping company coverage and buying cheaper, leaner policies on their own -- or going without.

But the individual market isn't like group insurance.

"In the individual market, people can and do get denied for things that are automatically covered in the group market," said Bob Schmitz, president of Schreifels & Associates, a benefits consultant in Brooklyn Center.

Blue Cross and Blue Shield of Minnesota said its denial rate is 15 percent. Medica says it's in that range, while HealthPartners declined to be interviewed for this report.

To further complicate matters, underwriting guidelines vary by insurer and can change from one year to the next.

Denied applicants may appeal. Sometimes a letter from a physician can help. Or they can go straight to the insurer of last resort: the Minnesota Comprehensive Health Association, or MCHA, a state pool for sick people who have been rejected by at least one private insurer.

That's where Emery and her husband ended up. They now have a toddler and pay a monthly premium of $427 with an annual deductible of $15,000. (A Blue Cross spokeswoman said the insurer doesn't comment on individual clients as a matter of policy.)

Emery is now applying to nursing school in a quest to get a job with health insurance.

Gender bias?

Some think women applicants have it harder than men. Last year, the National Women's Law Center published a report titled "Nowhere to Turn: How the Individual Health Insurance Market Fails Women," citing disqualifiers such as pregnancy and a previous C-section.

Women in Minnesota fare better than elsewhere, said the center's Waxman. Unlike some other states, Minnesota prohibits plans from charging higher premiums for women compared to men of the same age and health status. It also has MCHA, where premiums are capped at 125 percent of comparable private plans.

Some worry, however, that as the weak economy pushes more individuals into the high-risk pool, MCHA will become overextended.

Already, MCHA members spend over $100 million more annually in medical bills than they pay in premiums. That shortfall is now covered by a 2 percent premium tax on certain other segments of the insurance market. MCHA may seek legislation to expand that tax to the rest of the market, said Lynn Gruber, MCHA's chief executive. "We have to," she said, "because it's not sustainable."

'Don't get mad'

Deborah Morse-Kahn, 56, of Minneapolis, applied for individual coverage three years ago after she lost her job at the University of Minnesota. She's not sure why the first insurer rejected her. "There was a veil of mystery over it," she said. But she's convinced that "age was the biggie."

She had a history of hypoglycemia, or low blood sugar, and was taking prescriptions for restless leg syndrome and for nausea associated with menopause. She had also sought psychiatric counseling in the past.

What she remembers clearly, though, is her insurance agent walking her through the process -- and predicting a rejection.

Her agent warned her ahead of time not to get mad, said Morse-Kahn, now self-employed as a public historian and writer. "She said: here's what they [the insurance companies] have to do, here's what we'll have to do [apply to MCHA], and you're going to get your coverage because this is Minnesota."

Insurance that worsens crunch

Taken fromBBC News that might give you an usefull information.

An essential element in the Government's forthcoming package to stem the pernicious shrinkage of credit in the economy will be measures to compensate for the devastating impact on many companies of the withdrawal of trade credit insurance.

That probably sounds deeply dull and technical. But please read on, because this stuff matters to all of us.

For smaller companies, the importance of trade credit insurance is often that they can't borrow from banks, unless they've insured their sales to corporate customers.

The banks make this stipulation because it absolves them from having to assess the credit-worthiness of their borrowers in detail - because at least part of the credit risk has been laid off to an insurance company.

So the availability of such insurance is literally a matter of life and death for many businesses.

Woolworths is one of the more extreme examples.

When insurers would no longer provide cover to Woolies' suppliers in the autumn, that was the penultimate nail in the coffin of the ailing general retailer - because suppliers insisted that Woolworth pay cash upfront to them for orders, which meant that Woolies was forced to draw on its borrowing facilities, which in turn took the retailer up to the limit of what its bankers were prepared to lend.

And the rest is the sorry story you know: the demise of a historic high street name that was forced to liquidate everything so that the bankers could get their money back.

The point is that trade credit insurance is central to hundreds of billions of pounds in trade and the provision of finance to companies of all sizes.

When it's withdrawn, as has been happening for months, small companies are unable to fulfil valuable orders placed by big companies and those bigger companies lose access to vital supplies.

So a rational decision by insurers to scale back their cover on sales to companies perceived as vulnerable to our economic contraction is rippling through the economy in a damaging way: cover is being withdrawn because we appear to be in a sharp recession, and its withdrawal is making that recession significantly worse.

Part of the problem is that the insurers seem to me to have massively under-priced the cover they provide. Just as banks charged ludicrously low rates of interest during the years of the credit bubble, so the trade credit insurers insured hundreds of billions of pounds of trade for tiny premiums.

According to statistics from the Association of British Insurers, there were £334m of premiums written by the insurers in 2007, covering £282bn of sales by British companies.

Or to put it another way, insurers were receiving premiums equivalent to the turnover of a medium size business to protect more than 20 per cent of the output of the entire British economy.

Scary or what?

Those aggregated premiums were equivalent to a minute 0.1 per cent of the sum insured - down from 0.26 per cent in 1995. Which would only make economic sense in a world where there are never recessions.

One illustration that the premium was too low is that claims received by insurers in 2008 are likely to have been rather more than total aggregated gross premiums received in the previous year, extrapolating from trends in the first nine months of the year.

But the insurers have been protecting themselves from the worst losses by simply withdrawing cover for new orders to companies seen as weak. In other words, unlike insurance provided to you and me on our homes, for example, the trade credit insurers have been able to withhold protection as soon as they detected stormy conditions.

To restate the painful paradox: insurance designed to give confidence to companies that they would be paid by corporate customers is being scaled back in a way that's magnifying the woes of businesses big and small.

What's to be done?

Well in France a new system is being implemented whereby taxpayers are sharing the insurance risk with private-sector insurers on supplies to viable companies.

And I would expect the Business Department and the Treasury to implement a similar system of co-insurance by taxpayers.

But that can only be a short-term solution.

In the longer term, the supply of finance to small and medium-size businesses has to be overhauled, so that the viability of those businesses is no longer dependent on insurance that's only available when the sun is shining.

Jobless, with no health insurance

One of the impacts from global crisis economy thaat occured. Many peoples is jobless without having their health insurance. Their job gone so is their health insurance. What is the solution of this manner?
Nearly 200,000 Minnesotans have one thing in common right now: They’ve lost their jobs and, in many cases, their health insurance. These historic unemployment numbers are just one symptom of the current economic crisis facing our state and nation. Families are losing their homes, bankruptcies are on the rise, and a lack of health insurance exacerbates both. When the Legislature undertakes its staggering task this year of balancing the state budget, we must do so with an eye to easing the pain job loss wreaks on our communities and families. We can start with short-term, affordable health insurance. Most of us can identify with the toll on families when they don’t have insurance. Cost-effective, preventive care is often delayed or skipped altogether; visits for injury or illness may be put off until more costly emergency care or hospitalization is required. A lack of health insurance may even compound the challenge of finding a new job when chronic conditions go untreated.In addition, there is a broader economic impact as fewer people seek care. More than one in eight Minnesotans work in the health care industry. As people put off routine care and delay treatment for more serious ailments, local clinics and hospitals suffer. We have already seen major health-care layoffs in recent months. We cannot afford to let rising unemployment and the subsequent loss of health insurance further weaken one of our state’s largest economic engines. The one option that is currently available to laid-off workers, Continuation of Health Coverage, otherwise known as COBRA, is too expensive for most families. Qualified individuals are required to pay 102 percent of both the employer’s and employee’s share of the cost of the policy. The cost of COBRA premiums is more than $1,000 per month on average for family coverage, simply unaffordable when unemployment benefits average about $324 a week. As a result of this high cost, only 20 percent of those individuals who qualify for COBRA actually buy it, leaving 80 percent of the newly unemployed uninsured. That is unacceptable. What can we do? One immediate option is to offer MinnesotaCare — the state’s health-care plan for working Minnesotans — to those who are approved for unemployment benefits. People would remain covered as long as they continue to receive unemployment benefits and pay the low-cost premiums. This unique program could sunset in two years, after the current economic crisis has passed. Using the MinnesotaCare fund, which currently has a surplus balance of dedicated health-care dollars, to help Minnesotans in this time of economic crisis is the right thing to do, will help Minnesotans get back to work even faster, and offers additional stimulus to our economy. Admittedly, this is a short-term solution. We must continue to move forward on more fundamental, broad-ranging reform of our health-care system. But right now there is a need for immediate relief. The Legislature can and should deliver it.