Posts Tagged ‘health insurance’

Annals of Insurance: The Battered Need Not Apply?

Tuesday, October 6th, 2009

I’m guessing that you never thought of domestic violence as a pre-existing condition. Well, you haven’t tried to file a claim in one of the seven states that permit health insurers to deny coverage for the battered. The seven are Idaho, Mississippi, North Dakota, Oklahoma, South Carolina, South Dakota and Wyoming, plus the District of Columbia.
The aptly named Ryan Grim at the Huffington Post has developed a thorough chronology on this bone rattling demonstration of insurance logic. This is simply one example among many that when it comes to determining what qualifies for coverage, private insurers should definitely not be left on their own. The phantom “death panels” be damned: we already have health care rationing and premature deaths due to carrier rescissions of coverage, routine denials of (expensive) treatment, and exorbitant tier 4 drug charges.
To be sure, there is a logic at work in the insurance thinking: “We do not have to cover pre-existing conditions. You were beaten up before coverage began. You were beaten after coverage went into effect. Therefore, we deny your claim.” I wonder if the subsequent beating involves a new beater, does that create a new – as opposed to pre-existing – condition? Using the same logic, if I fell down and broke my arm prior to my current coverage and broke the same arm again in another fall, would that be a pre-existing condition?
State Farm used to be among the carriers that at least considered denying claims from battered women (and men, for that matter). Spokesperson K. C. Eynatten put it this way:

State Farm no longer rates or denies life or health insurance to battered women, even if there’s a history of domestic violence.

We realized our position was based on gut feelings, not hard numbers. And we became aware that we were part of the reason a woman and her children might not leave an abuser. They were afraid they’d lose their insurance. And we wanted no part of that.

It’s great that State Farm changed the policy, but you have to wonder how their “gut feelings” led them to deny coverage in the first place. Victims of domestic violence need prompt medical treatment, counseling (yes, adjusters, pay for the counseling!) and a little chat with the police. One would hope that insurance companies would figure this out for themselves. They don’t really need new state and federal laws compelling them to do the right thing, do they?

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Attention Shoppers: Walmart is Expanding Health Care options for Workers

Monday, October 24th, 2005

The Insider has tracked the impact of Walmart, the nation’s largest retailer, with considerable interest. We have no idea what happens to employees who file workers compensation claims, but we would guess that the company is ferociously aggressive in applying claims management/denial techniques. As with many employers, the company’s workers comp problems are compounded by the fact that more than half of their employees lack health insurance. That is about to change.
The Good News
We read in today’s New York Times (registration required) that Walmart is significantly expanding the health insurance options for its workers. The good news concerning the company’s new health insurance plan is its cost. This is a relatively inexpensive plan — as low as $11 month for individual coverage, $37 for a single parent and $67 for families. Individuals could visit a doctor three times before paying a deductible, an arrangement aimed at encouraging workers to seek preventive care. In the past, workers have had to pay a deductible before their insurance kicked in.
The Squeeze
That’s the good news. This being Walmart, we better look at the details. When Walmart says that monthly premiums would cost between 40 percent and 60 percent less than those for any existing Wal-Mart insurance policy, we need to find out why. The plan carries a $1000 deductible — a big number for most people and one which represents over 5% of the annual income for many Walmart workers. In the first year, total payments under the plan are capped at $25,000, so workers had best plan their catastrophic illnesses only after they are beyond their one year anniversary. In addition, out-of-pocket payments range from $300 for prescriptions to $1,000 for hospital stays.
As with many types of insurance, this plan works best for people who don’t need it. It’s a good fit for workers who are young and healthy, as opposed to those who are older and more vulnerable to illness. It’s one thing to have an annual check up with no follow up visits. It’s quite another for an older Wal-Mart employee, who might visit a doctor three times in a one month and then need to pay $1,000 before the company would share the cost of care. The last time I wandered through a Walmart, I saw more people likely to run up against the deductible than those who would not.
Bottom Lines and Health Care
Perhaps Walmart has taken the recent spate of bad publicity to heart. Sure, their prices are low, but consumers may have begun to balk when a company hires illegal immigrants to clean their facilities and then locks them in to prevent theft, or when many company employees end up on public assistance because they lack health insurance.
The Walmart model will be closely watched from all sides. Wall Street and Wal-Mart investors will scrutinize the bottom line, tracking the impact of the new benefits on Walmart’s profitability. There are a number of analysts hoping that the Walmart plan will prove a useful model to others in controlling spiralling health costs. On the other hand, consumer and worker advocates will focus on the impact of the premiums and the deductibles on the quality of health care available to workers. We are a long way from resolving this problem, but it is encouraging to see Walmart step into the health care arena. Whether it’s a step in the right direction remains to be seen.

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Left and Right Converge on Health Care Coverage

Tuesday, May 31st, 2005

We continue to track the national crisis in health care coverage. we’ve blogged it before and we’ll blog it again. As of 2003 about 45 million Americans lacked health insurance. Of these, there are about 20 million American workers without health coverage, which comprises a seismic undercurrent in workers compensation. Health care coverage tends to follow income: the lower your income, the more likely you cannot afford health insurance. The Kaiser study, which we cited back on April 6, notes that 40% of the workers without health insurance have less than a high school diploma. Twenty two percent of the uninsured report their health as “fair or poor.” In addition, about one third of uninsured workers rely on physical labor for their living. These three overlapping groups are at especially high risk for prolonged disability under workers comp. It’s probably no coincidence that Texas, the state with the highest incidence (27%) of non-covered workers is also the state where workers with a low education are most likely to receive permanent disability payments.
A recent article in the Boston Globe (registration required) by Theo Emery of the AP notes that Massachusetts has joined the ranks of the states singling out large employers who fail to offer coverage to all their employees. The state pays more than $52 million a year to cover workers in a broad range of jobs, from universities and hospitals to the U.S. Postal service. Four employers — Dunkin Donuts, Stop & Shop, Walmart and McDonald’s – have more than 1,000 employees each who received public health benefits. Now there is talk of surcharging these and similarly situated employers. Any such surcharge would provide political fireworks indeed!
Coalition of the Stymied
So I was pleased to read Robert Pear’s article in in the New York Times (registration required) that a group of 24 leaders representing health care, business and workers has been meeting quietly to hash out a concensus for providing coverage to the uninsured. The participants range from the liberal Families USA to the conservative Heritage Foundation, the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM). The group also includes the AARP, the A.F.L.-C.I.O. and the American Medical Association. I am encouraged that, first, they agreed that there is a major problem; second, that they can meet in a room together and just talk and listen to each other; and third, that despite their ideological differences, they might be able to agree on some solutions.
So far they are focusing on proposals to expand coverage to as many people as possible, as quickly as possible. They recognize that there are many reasons for people being uninsured, so rather than trying to come up with a “one size fits all” solution, they are exploring more flexible models.
Neil Trautwein, assistant VP for NAM, compares the talks to medieval alchemy, bringing together disparate and volatile ingredients: “It could produce some wondrous proposal, or could blow sky-high.”
Thus far, here are some of the options they are exploring:
Tax credits to help parents provide insurance for children.
Deduction programs for employees whose employers do not offer health insurance; the employee contributions would be matched by other sources to provide coverage.
Tax credits to small businesses to help pay for insurance.
Expansion of Medicaid.
Federal grants to states to help them establish insurance purchasing pools.
Aggressive Timetable
The working group hopes to have a specific proposal by the end of the year. They have no illusions about the scale of this effort. As Stuart Butler of the Heritage Foundation says, “it’s a coalition built of frustration. True believers on the left and the right have been stymied on this issue.” Here’s wishing them the best of luck in this essential endeavor. We’ll keep you posted.

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Number of uninsured workers at large employers growing

Tuesday, March 9th, 2004

Human Resource Executive’s Workindex reports that the ranks of uninsured workers at large firms – companies with 500+ workers – have been growing at a rapid rate. According to a recent report – The Growing Share of Uninsured Workers Employed by Large Firms – issued by the Commonwealth Fund, the proportion of uninsured workers at large firms increased from 25 percent to 32 percent in recent years, while the proportion of uninsured workers in small and mid-sized firms declined.

The study calls the rising rate of uninsured workers in large firms an “unreported phenomenon.” While there is widespread awareness that smaller firms have high numbers of uninsured workers, the report states that:

” … features other than size also affect whether an employer offers coverage; in fact, recent research suggests that workers’ income is a better predictor of lack of health benefits than firm size … In addition, the likelihood of an establishment offering health coverage is 20 percent higher in manufacturing than in service jobs, and 60 percent higher if some workers are union members, according to the National Center for Health Statistics (1997).”

The report elaborates on the relation of income to insurance:

“Indeed, the problem of uninsurance in large firms is concentrated among low income workers. While 46 percent of low-income workers in large firms are uninsured for some time during the year, only 14 percent of middle- and 8 percent of high-income workers in large firms are uninsured at any point during the year.”

Meanwhile, as the ranks of the uninsured swell, Maine is experimenting with universal access to affordable healthcare in a program called Dirigo. “The goal is to insure 31,000 people this summer and cover the state’s remaining 130,000 uninsured by 2009.” It’s a laudable effort that bears watching, although other state initiatives such as “pay or play” programs have met with limited success.

The issue of uninsured workers should be of great interest to risk managers and human resource practitioners, particularly in relation to workers comp. While there are few studies documenting the practice, conventional wisdom holds that medical cost shifting often occurs when workers lack insurance – the so-called “Monday morning” claims. The Workindex article suggests:

“Low employee morale and absenteeism could become issues … as well as false workers’ comp claims resulting from injuries an uninsured employee actually sustained outside the workplace, but didn’t have the health-care insurance to cover it.”

The healthcare situation is likely to get worse before it gets better. Recent reports indicate that healthcare costs continue to grow, but at a slower rate.

“Healthcare spending in the United States is projected to grow 7.8 percent in 2003, down from the 9.3 percent growth experienced in 2002, according to a report issued by the Centers for Medicare & Medicaid Services (CMS). A slowdown in health care spending growth in 2003 would follow six consecutive years of acceleration. As a percentage of Gross Domestic Product (GDP), healthcare spending is expected to continue to grow, reaching 15.3 percent in 2003, up from 14.9 percent in 2002, according to the report.”

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