Reforms to Ontario’s Dispute Resolution System Are Long Overdue

Full disclosure here. I worked with Justice Douglas Cunningham on his review of Ontario's Dispute Resolution System (DRS) and fully support his recommendations. In the process of coming up with his recommendations, Justice Cunningham listened to a lot of users of the system, ADR experts and other interest parties. He spent considerable time analyzing what he heard before making his conclusions and recommendations. Obviously, not everyone is going to agree with all the recommendations.

 The current system is definitely broken despite some suggesting to the contrary. The system is too slow, which adds unnecessary costs and hardship. The culture within the system contributes to the problems. Justice Cunningham's report proposes a culture change starting with pulling the DRS out of FSCO and significantly speeding up the process. Should all his recommendations be adopted, we will have a much more responsive and efficient system. In 1990, the government created the DRS specifically to provide accident victims with a cost effective and timely alternative to the courts. The proposed reforms are intended to return the system to those first principles.

A number of stakeholders have come out against Bill 171 which is unfortunate. Some have suggested that Justice Cunningham's report requires more consultation. I've been working in this system a long time and that is just a stall tactic to provide more time to lobby to protect your interests. Trial lawyers are opposed to Justice Cunningham's recommendation to end accident victims' ability to choose to go to court or arbitration to resolve a dispute. However, Justice Cunningham was of the view that a simpler and quicker DRS would provide appropriate access to justice and therefore, the court option would no longer be necessary.

Accident victim groups are understandably disappointed that Justice Cunningham did not address their long-term complaints regarding the independent assessment industry. They believe that unless independent assessment providers are regulated, all other reforms are pointless. I disagree. Many accident victims will benefit from the reforms. Settlements or the restoration of benefits will occur sooner. Justice Cunningham indicated that the type of regulatory system proposed by stakeholders was clearly outside the scope of his review. As such it will have to wait for another day.

The Opposition parties have been critical of Bill 171 but they have shown a willingness to allow the bill to pass at second reading and go to a Standing Committee for review. I believe beyond the rhetoric the Legislature recognizes changes are needed.

The Clock is Ticking [UPDATED]

Today is (currently) the last day of the initial Open Enrollment season. Ms Shecantbeserious has indicated that, if you've tried to sign up and met with no success, the actual final day is April 15th [ed: irony - how does it work?]. I have several clients in this boat right now, and am waiting with bated breath as to how it will play out.

Golden State readers are in a very different boat. Co-blogger Bill reminds us that:

"Under the latest deadline changes, an application has to be started on CoveredCA by MARCH 31. You have until APRIL 15 to complete it. Outside of a qualifying event, if you miss the March 31 date, you're out until next year. On the Federal Exchange, they allow you to check a box that says that you tried to enroll and couldn't and are then allowed until April 15 to start a new application. That's not the case in California!"

Best get crackin'!

UPDATED: Heh (from Bill H):

The latest (slightly edited) press release from CoveredCA:

"Record-setting numbers of people trying to sign up for Covered California™ health insurance plans overwhelmed the system on the final day of open enrollment. Because of the staggering demands on the system, Covered California announced the following policy this afternoon:

• Consumers who were unable to create an online account or start their online application because of technical difficulties can contact a Covered California Certified Insurance Agent to explain that they attempted to get through on March 31 and experienced difficulties. Those consumers will have until 11:59 p.m. April 15 to work with the Certified Insurance Agent to complete their application and choose a plan.
 

• Consumers who created an online account and completed the first page of the application by 11:59 p.m. March 31, 2014, will be able to complete their application for the open-enrollment period, either by themselves online or with the help of a Certified Insurance Agent. Consumers must complete the application and select a plan by 11:59 p.m. April 15, 2014. Those enrollees will receive coverage effective May 1, 2014."

Rumors that the entire system is running on two surplus Commodore 64 computers are unfounded. An Altair 8800 is also employed to dynamically balance the load.

Insurance News - Monday, March 30, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, March 30, 2015:

• Ontario may increase mandatory reporting limit for collisions with no injuries to $2,000, from the $1,000 level set in 1998.  Five provinces have already increased their limits.
• Toronto Uber provides drivers with little information about insurance, including the name of their insurer.  Consumers should be aware that drivers' insurance policy may not provide them with coverage.
• New York’s top financial watchdog warned insurers this week about charging higher prices to customers least likely to shop around, the latest state to raise questions about how the industry uses data when setting rates.
• Alberta road safety bill has been passed by Legislature and will introduce demerit points for drivers convicted of distracted driving.
• Google explains why they created the driverless car.

NDP Raise The Profile Of Auto Insurance As Ontario Gets Closer To An Election

At the Ontario legislature, Wednesday was set aside as Opposition Day which is a day the opposition parties are allowed to set the agenda.  Not surprising given the attention it has received, auto insurance was placed on the agenda.  Jagmeet Singh, MPP for Mississauga–Brampton South, on behalf of the NDP introduced a motion that FSCO mandate a 15% reduction in auto insurance premiums within the next 12 months.

The Liberal minority government supported this non-binding motion and perhaps not coincidentally on the same day the NDP voted in favour of the Throne Speech and Bill 33 - Supply Act, 2013.  Both votes were critical to the survival of the government.

The basis for the NDP motion is that according to data from the General Insurance Statistical Agency (GISA), the insurance industry's benefit costs dropped by $2 billion following the 2010 auto insurance reforms without any corresponding reduction in premiums.  The NDP contend that there is capacity in the system to drop rates.  In addition, the NDP note that a study was conducted by FSCO on profits in the industry following recommendations made by the Auditor General in 2011. That study has not been released and the NDP is concerned that profits in the industry are too high which is contributing to higher premiums paid by drivers.

The industry counters that rates are high because of fraud in the system and the mediation backlog at FSCO.  They would support rate reductions if both these issues were addressed as well as a number of other changes to the system.

The numbers do not lie.  There was a drastic reduction in benefit costs following the 2010 reforms.  Those reforms targeted abuse and fraud in the system.  So although fraud is a problem in the auto insurance system (as it is with every insurance system) it is likely not the problem is was prior to 2010.  The industry contends that the fraud costs the system $1.6 billion a year although they have not substantiated that figure post 2010 reforms.

So there probably is capacity to lower premiums although 15% may not be the right number.  Prior to the 2010 reforms, rates in the province were inadequate and many companies were carrying underwriting losses.  FSCO also has a statutory requirement to ensure that rates are adequate and therefore cannot approve rates that would create solvency problems for an insurer.

But the bottom line is that this is all political posturing leading up to provincial election expected within the next 12 months.  The government's public commitment to reduce premiums by 15% over the next 12 months could be interrupted by the election.  Whether it ever happens is very much up in the air.  However, auto insurance will become an election issue unless the government addresses the proposed premium reduction before the writ is dropped.  Auto insurance premiums are not paid to the government so a premium reduction does not impact on the provincial budget.  The government's only concern will have to be any reductions do not impact on solvency and the availability of insurance.

Happy 9th Blogiversary to the HBB!

Congratulations to my friend David Williams' Health Business Blog, which recently hit the 9 year mark (just a few months after IB did).

Kudos, David, and many more years of successful bloggetry!

Kreidler on Supreme Court case and the state health-care exchange

Commissioner Kreidler sat down with TVW's Christina Salerno yesterday for a Q&A on health care reform, including this week's three days of arguments in the U.S. Supreme Court and the shape of the state's upcoming Health Benefits Exchange.

From the discussion:

What would change if they overturned the act?

People are directly benefiting from parts of the act today. People can stay on their parents’ insurance until 26, they can get preventive care with no deductibles — all of that would go away. (Attorney General) Rob McKenna’s lawsuit would undo all of that. The entire law may go down. We’d be back to square one, which is a system that’s failing us as a country and as a state. For many individuals, it was making a difference between life or death decisions.

What's Behind the 2012 Budget Announcements

There are a few key things that we can take away from the 2012 Budget announcements yesterday. Should the minority government survive a number of significant auto insurance initiatives will occur. Note that the Budget also addressed on a number of initiatives that have already occurred or are underway. It is not unusual to repeat previous announcement in particular where they have no monetary impact on the government.

1. Auto Insurance Anti-Fraud Task Force

The section of the Budget document has nothing really new. The announced initiatives were included in Task Force's interim report that was released in December 2011. For example. the government notes that it has amended regulations (see Ontario Regulation 194/11) to ensure that treatments are provided as invoiced and issued a Superintendent’s Guideline to ensure that insurers are not being invoiced for medical devices at a significantly higher than market rate. The Budget document also sets out areas where the Task Force has committed to making recommendations.

2. Scientific and Evidence-Based Approaches

The government has signalled that it is moving ahead on two important projects. One is that minor injury guideline is to be developed the is evidence-based, that is, based on medical ad scientific research to be conducted by a consultant. FSCO released a Request for Proposals in November 2011 to hire the consultant but no announcement has been made regarding the successful bidder. This work should take two years to complete.

The second project is deals with the definition of catastrophic impairment found in the Statutory Accident Benefits Schedule (SABS). In December 2010 FSCO appointed a Expert Panel lead by Dr. Pierre Cote to review the SABS definition. That panel submitted two reports to the Superintendent which are both available on the FSCO website. The Budget document indicates that the Superintendent has made his final recommendations and his report will be made public. In addition, the government intends on making amendments to the SABS based on those recommendations. No time frame has been provided but regulation changes do not need to go to the Legislature for approval. Cabinet has the authority to amend the SABS.

The Expert Panel reports deal with such things as combining psychological and physical impairments, more objective tests for spinal cord, brain and psychiatric impairment and interim benefits for those waiting for a catastrophic determination. Hopefully the government will move quickly on this issue.

3. Other Initiatives

The government has signalled that it will review FSCO's Dispute Resolution System. Cracks have appeared in the system which has not undergone significant reform since it was first introduced in 1990. However just think about how much Ontario's auto insurance system has evolved over the past 22 years. Apart from the mediation backlog, a comprehensive review is likely overdue. No timeframe has been provided nor a mechanism for undertaking that review.

The government has signalled a willingness to work with insurers to explore voluntary usage-based auto insurance policies. I will likely address this issue in future postings. I feel that as traditional risk classification criteria are being chipped away at (ie, credit scoring, territories), usage-based policies may be the answer to predicting risk.

The government will harmonize the timing of statutory automobile insurance reviews. There are currently three statutory reviews in the Insurance Act. At least once every two years, the Minister is required to table a report before the Legislature in respect of the adequacy of statutory accident benefits and setting out changes made to the SABS (section 289). The Superintendent is required to undertake a review of Auto Insurance sections of the Insurance Act and related regulations at least every five years and recommend any amendments that the Superintendent believes will improve the effectiveness and administration of the Act and regulations (section 289.1). The Superintendent is also required, at least once every three years, to consult on the operation of those sections of Ontario Regulation 664 that deal with rating and risk classification and submit to the Minister a report containing the Superintendent’s recommendations for amendments to the regulations (section 417.1). A similar recommendation was made in the Superintendent's Five Year Review report in 2009 and the 2011 Auditor General's report.

The government intends to propose amendments to give the Superintendent the authority to impose administrative monetary penalties (AMPs) in the insurance sector. AMPs are monetary penalties viewed as a middle ground between a ‘slap on the wrist’ and quasi-criminal proceedings, enabling insurance regulators to issue a penalty proportionate to the infraction.

State website access.wa.gov among the top nationwide

Well-deserved kudos to the folks who run Access.wa.gov, a Washington state website that helps make much of what government is doing available on one easy-to-navigate site.

The Sunshine Review, a nonprofit group focused on government accountability, recently awarded the site with an A+ grade, meaning that it's one of the most accessible state government sites in the country. From the group's report card on the site:

Elected officials are listed with contact information
Budgets are posted
Audits are posted
Contracts are posted in a searchable database
The site includes information on requesting public records
Lobbyist lists and reports are posted in a searchable database
etc.

(And a hat tip to The HDC Advance for the heads up on this.)

Does the ICD 10 have the Metric Curse?

Headlines on all the health care outlets yesterday (3/27/2014): 

BREAKING NEWS: House approves temporary SGR fix

Bill also delays ICD-10, two-midnight rule and RAC audits

According to the article: “The House of Representatives on Thursday approved a temporary fix to the sustainable growth rate (SGR) for one year in a bill that also delays ICD-10 implementation until at least October 2015 and postpones hospital compliance with the controversial "two-midnight rule" and recovery audits of medically unnecessary claims until March 2015.”

While several items were approved, the excitement was due to yet another delay for the ICD-10. In 1996, the new HIPAA law mandated the acceptance of the ICD 10, and much like the poor metric system, it has been delayed and delayed in its implementation.

Why has it been delayed? Cost and complexity:

There are significant differences between ICD-9, what is used now and ICD-10, what is currently used in 25 countries, which this table demonstrates:

ICD-9	ICD-10
3-5 characters in length	3-7 characters in length
Approximately 13,000 codes	Approximately 68,000 available codes
First digit may be alpha (E or V) or numeric; digits 2-5 are numeric	Digit 1 is alpha; digits 2 and 3 are numeric; digits 4-7 are alpha or numeric
Limited space for adding new codes	Flexible for adding new codes
Lacks detail	Very specific
Lacks laterality	Has laterality (i.e., codes identifying right vs. left)

What has the medical community so upset about adopting the ICD-10: moving from around 13,000 codes to 68,000 codes. Why such an increase? Because in the ICD-10 the code tells a story. Instead of a code that says “Fracture”, the new code says “Fracture, left foot, first incident, middle toe, while a passenger in a car in a car crash”. In fact, the codes are so complex, they are unintentionally funny. Here are a few real codes:

T63.442S Toxic effect of venom of bees, intentional self-harm, sequela

W56.22xA Struck by orca, initial encounter

Z73.4 Inadequate social skills, not elsewhere classified

V91.07xD Burn due to water-skis on fire, subsequent encounter

And then there is the cost. I have already had some webinars on the glory that is ICD-10, and it is recommended to the physicians that they obtain a line of credit to keep their businesses open during the transition, as the new codes will cause delay in payments. In fact, on the CMS Website, a handout for physicians states, “Budget for time and costs related to ICD-10 implementation, including expenses for system changes, resource materials, and training. Assess the costs of any necessary software updates, reprinting of superbills, trainings, and related expenses.” Great, a new unfunded federal mandate, but at least this time they are stating it will be costly to transition.

Needless to say, the medical community is doing cartwheels over a possible delay. (The first question on a CMS ICD-10 webinar I attended at the beginning of March “Is there going to be a delay?” The answer was "no"). Let’s all hope that the Curse of the Metric System continues to plague the ICD-10 or the next time you go to the doctor your code could be “Headache before sex, subsequent occurrence, would rather read “10 Shades of Gray”, or at the least take a long hot bath, sheesh…”

What’s the “individual mandate”?

Our consumer advocates have been getting a lot of questions about the individual mandate, which is the penalty for failing to obtain health insurance under the Affordable Care Act (ACA), which is a federal law. In Washington, the last day to enroll in a health plan is March 31, only four days away.

If you qualify for free or subsidized health care, enroll through Washington Healthplanfinder at www.wahealthplanfinder.org.  People qualify for help if their income is less than 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four in 2013). If your income exceeds that threshold, you may wish to contact an insurance broker or agent directly.

Those who qualify for Washington Apple Health (Medicaid) may continue to enroll throughout the year. There are also certain events that allow you to enroll or change your enrollment throughout the year. Read more about qualifying events.

With a few exceptions, people who do not purchase an ACA-compliant health insurance plan will pay a penalty when they file their 2014 federal income taxes. The penalty is 1 percent of your income or $95, whichever is greater. The penalty increases yearly through 2016, when the penalty will be the greater of 2.5 percent of your household income or $695 per adult and $347 per child. If you lacked coverage for part of the year, your penalty will be prorated.

There are exemptions to the penalty:

• People who cannot afford coverage because the cost of premiums exceed 8 percent of their household income.
• People whose household income is below the minimum threshold for filing a tax return.
• People who are incarcerated.
• Members of federally recognized tribes.
• People who are eligible for care through the Indian Health Service.
• People who live in the United States illegally.
• People whose religious beliefs prohibit having health insurance and are recognized as such by the Social Security Administration.
• People who belong to a health care sharing ministry.
• People who experienced a health insurance coverage gap of fewer than three months.
• U.S. citizens who live outside of the country for at least 330 days during a 12-month period. However, once they return to the U.S., they need to purchase health insurance within three months.

People must apply for an exemption to the individual mandate through the IRS. The IRS created a section on its website about the mandate, exemptions to it, and how to file.

Cavalcade of Risk #205: Call for submissions

Nancy Germond hosts next week's Cav. Entries are due by Monday (the 31st).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like). And please only submit if you are willing to link back to the carnival if your submission is accepted.

Insurance News - Friday, March 28, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, March 28, 2014:

• The Ontario government is reconsidering the privatization of winter road maintenance in the province after questions are raised about road safety.
• Toronto Police are dressing up as panhandlers to catch people texting while driving.
• We all know distracted driving is wrong. So why don’t we stop? Well because these devices are addictive.
• This is an interesting prediction, self-driving cars will reduce the need to own cars and park them downtown. That frees up space downtown currently being used to park cars.
• In light of all those Toyota and GM recalls, how safe will self-driving cars really be?

Yo Quiero Obamacare?

The Obama administration has been helping to facilitate a series of events nationwide at

Mexican Consulate offices to enroll people in Obamacare – and a key activist says the efforts are “our responsibility” regardless of citizenship.

“Whether they’re Mexican nationals or whether they’re United States citizens or whether they’re in transition-- and if they’re there it is our responsibility within all of America to educate on the Affordable Care Act,” Enroll America Field Organizer Jose Medrano told Breitbart News on Wednesday.

Breitbart

Balancing consumer protection, innovation is focus of new health insurance rules

Balancing consumer protection with innovation is the focus of the new rules under consideration for new health insurance plans that will be available in 2015.

The Insurance Commissioner’s office has been working on the health insurance network rules for more than four months. The process began soon after the emergence of what are called “narrow networks.” That’s the common reference now to health plans that don’t always include the doctors and hospitals that insurance companies typically contracted with in the past before the Patient Protection and Affordable Care Act took effect this year.

While still providing access to a full range of medical providers, health insurers have said they have not contracted with some traditional doctors and hospitals because of the higher rates they charge for some services. It’s a key way that insurers have said they can keep premiums lower for consumers and still maintain comparable quality care – especially considering the often wide discrepancies in what providers charge for the same service.

Insurance Commissioner Mike Kreidler saw early on that consumers and providers needed more guidance in developing health plans for 2015. The new rules under consideration are heavily focused on providing more transparency – answering the common question: “Is my doctor and hospital in the network of the health plan I might buy?”

“Consumers have a right to know,” Commissioner Kreidler told the members of the Health Benefit Exchange at its monthly public meeting March 27. “It’s my job to ensure that consumers can access the care they need and that insurers live up to their promises.”

That hasn’t been as clear as it should have been through plans offered this year. The new rules are designed to give consumers more information on which to make choices in 2015.
The commissioner has heard from a wide range of interested parties, including insurance companies, doctors, consumer advocates, Indian tribes and more.

A public hearing on the rules is scheduled for April 22 in Olympia. They are set to take effect May 1, about the same time that insurers will begin proposing new plans. Considerable flexibility is built into the new rules to make sure that health plans for 2015 are given time to comply. The fact is, health insurers have been involved in the process for months. And much of what’s being asked for in the rules is already required.

The new rules are simply providing a formal and clearer roadmap for all to follow on behalf of consumers.

The 6 Million Person Question

So there's this:

"More than 6 million Americans have now signed up for private insurance under the [ObamaTax]"

But have they really bought insurance?

Consider that we already know that Ms Shecantbeserious counts plans left unpaid for as "sold." So one is left with the real question:

How many of these (alleged) new policyholders have actually paid for their new coverage?

And here's a couple more:

How many are young and healthy (and preferably male)?

How many are paying full freight, and how many are counting on the generosity of others taxpayers?

Inquiring minds want to know.

Landslides: Does homeowners insurance cover that?

There was a large landslide on Whidbey Island early this morning, reportedly knocking one home off its foundation, destroying a road and threatening multiple other homes. Photos from the scene -- like this one, or this one -- are pretty amazing.

Anytime this happens in the rainy Northwest -- and it does happen with some regularity -- we get phone calls from people wondering if their homeowners insurance covers landslides.

The answer: Sorry, but probably not.

Mudslides and landslides are NOT covered by a standard homeowners policy, which is what most people have. So it can be very difficult to collect for losses caused by any form of land movement.

So what can you do if you're worried about a potential landslide affecting your home? You may be able to buy a special rider -- i.e. an add-on -- to your homeowners policy that includes coverage for contents for all perils, including earth movement, unless the policy specifically excludes it. But these types of riders typically only cover the contents of your home, not the structure, and some insurers don't offer this option at all.

For the structure, you may be able to buy separate earth-movement coverage from what's known as the "surplus lines" market, meaning insurers who specialize in risks that the traditional insurance industry doesn't cover. But know that if your home is on a steep hillside, it may be difficult to get this kind of coverage.

For the folks affected by the slide this morning, it would be worth checking with their lenders. Mortgage lenders in some cases require earth-movement coverage as a condition of a loan. Although such insurance protects the lender, rather than the homeowner, it could help if the home is no longer useable.
Complicating things for folks close to a landslide, insurers often declare moratoriums on new coverage until a particular event is completely over. We've seen this with earthquakes (due to the fear of aftershocks) and sometimes during wildfire season in parts of Eastern Washington.

Auto Insurance Annoucements in the 2012 Ontario Budget

Insurance

In 2010, the government made major changes to the auto insurance system. As a result, premiums are stabilizing for drivers across Ontario. Building on the success of the 2010 reforms, the government is taking action to tackle fraudulent and abusive practices, base insurance benefits on scientific and medical principles, and ensure its regulator continues to identify and respond to new and emerging issues. The government’s ongoing work in the area of auto insurance, including fraud, should continue to reduce the pressure on premiums.

Auto Insurance Anti-Fraud Task Force

The government remains committed to combating insurance fraud and continues to support the Auto Insurance Anti-Fraud Task Force. The Task Force was announced in the 2011 Budget and delivered an interim report in December 2011. The government is working with stakeholders to address the Task Force’s early recommendations and has already:

• enhanced auto insurance fraud training for police officers;
• started a pilot project using the Health Claims for Auto Insurance database, which will allow health care providers to flag clinics that are misusing their credentials and cut down on identity theft;
• amended regulations to ensure that treatments are provided as invoiced;
• issued a Superintendent’s Guideline to ensure that insurers are not being invoiced for medical devices at a significantly higher than market rate;
• encouraged the industry to communicate the issue of fraud across a number of media platforms, and measure the current state of consumer engagement and awareness on the issue; and
• required CEOs of automobile insurers in Ontario to annually attest that their accident benefit cost controls are effective and that legitimate claimants are treated fairly.

The Task Force recommended that the government should provide the Superintendent of Financial Services with the power to impose administrative monetary penalties for contraventions of legislation and regulations. The government is proposing amendments that will provide this authority in order to enhance regulatory effectiveness.

The Task Force is continuing its important work this year. Since the interim report, it has been building relationships with the Workplace Safety and Insurance Board (WSIB) and Crime Stoppers to share best practices in fraud prevention.

The Task Force’s final report will provide recommendations on the following:

• regulation of health clinics;
• other gaps in regulation;
• establishment of a dedicated fraud unit;
• consumer education and engagement strategy; and
• a single web portal for auto insurance claimants.

Scientific and Evidence-Based Approaches

Scientific and medical knowledge on how to identify and treat a variety of injuries has improved remarkably over the last decade. The government will ensure, where possible, that insurance regulations reflect the most relevant science on identifying and treating injuries from automobile accidents. Clarity will help minimize disputes in the auto insurance system, ensure people get the treatment they need and ensure that treatments provided are based on medical evidence.

Newer scientific and evidence-based approaches can be applied to serious and minor automobile accident injuries. Recommendations on a new Minor Injury Guideline, based on the latest research on successful treatment, are being developed. The government has also received the report of the Superintendent of Financial Services on catastrophic impairment based on the work of an expert panel. The government will make the Superintendent’s report public and will move forward to propose regulatory amendments in this area.

Modern Insurance Regulation

Ontario’s insurance regulator, the Financial Services Commission of Ontario (FSCO), will continue to modernize to meet today’s challenges. The government has welcomed the recommendations of the Provincial Auditor General, which will strengthen the oversight of the auto insurance system in particular. The government will further enhance the effectiveness of FSCO regulation of the insurance sector by proposing to:

• engage in a review of the automobile insurance dispute resolution system;
• strengthen the Superintendent’s authority regarding Unfair or Deceptive Acts or Practices;
• clarify the Superintendent’s authority regarding rate and risk classification approvals;
• support a Superintendent’s review of the profit provision benchmark in auto insurance rate change approvals;
• work with insurers to explore the implications of voluntary usage-based auto insurance policies;
• harmonize the timing of statutory automobile insurance reviews; and
• improve solvency supervision of Ontario insurers.

Analysis and comments to follow.

Insurance News - Wednesday, March 27, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, March 27, 2013:

• According to the Star, Liberals will support NDP call for 15% auto insurance cut.  No plan on how rates will be cut but this is a no brainer for the government.  Premium reductions won't be funded by the government.
• According to Finance Minister Charles Sousa, Ontario motorists may be allowed to pay an extra fee to drive solo in HOV lanes.  This must be part of the Liberals' plan to fund transit expansion.
• A new slate of maximum fees and disbursements payable for services, activities or functions under Nova Scotia’s Automobile Insurance Diagnostic and Treatment Protocols Regulations will take effect on April 1.  Yes fees are lower than those in Ontario.
• Inflation surges most in 20 years as gas prices spike.  February rise in CPI was 1.2% and the annual rate was 1.4%.  This is not expected to be a trend. 
• OnlineAutoInsurance.com study on territorial rating suggests that wealthier, less-diverse areas of New Jersey tend to see lower auto insurance premium.

Health Wonk Review: March Madness edition

The bad news is that this week's HWR host Chris Fleming missed a total of (sweet) 16 posts by that much.

The good news is that there are plenty of great posts from which to choose, from HWR founder Joe Paduda on ideology and business decisions to David Williams ground-breaking interviews of all 9 candidates for governor of Massachusetts - pretty amazing. And our favorite health care economist, Jason Shafrin, offers some surprising insight into genetic testing and adoptions.

Do check it out.

"Wait a minute -- I thought insurance companies can't have waiting periods for pre-existing conditions!"

We’re hearing this a lot these days, because people are aware that the federal health care reform law affects pre-existing condition waiting periods.
For kids under 19, this part of the health care reform law has already gone into effect. So insurance companies cannot apply pre-existing condition waiting periods when kids go on health insurance policies.
Here's where the confusion comes in: the rules are different for adults. But not for long.

Starting Jan. 1, 2014, the same rule that now applies to kids -- no waiting period for pre-existing conditions -- will apply to adults. For now, however, insurance companies can, and do, apply pre-existing condition waiting periods when adults go on policies.

So hang in there. Starting in January, health insurance companies have to cover treatment for pre-existing conditions starting as soon as you go on the policy.

Buyers Remorse

Did you ever have one of those moments when you realize a decision you made, or a choice, was a really, really, really stupid idea?  

Now you know how some of our Congress critters feel.

Like roaches that scatter when the light comes on, vulnerable Representatives and Senators are running away from Obamacare as fast as they can.

Several Democratic senators reportedly plan to introduce as soon as Thursday a set of principles and legislation aimed at fixing parts of ObamaCare amid concerns the law could cost Democrats House seats and possibly the Senate in November.

Fox News

They were for the law before they were against it.

Begich and Warner have called for allowing "copper" plans on the government-run health exchanges. The new insurance plans would offer lower premiums and higher out-of-pocket costs than the "bronze," "silver" and "gold" options currently offered.

Higher deductible plans?

Most people I talk to think the current deductibles are too high. Pushing them higher won't work. Just shows how out of touch Congress zombies are.

Warner, who faces a formidible midterm challenge from Republican National Committee Chairman Ed Gillespie, said on Fox News earlier this week that he supports allowing Americans to purchase health insurance across state lines.

Buying across state lines never made any sense. Even less so now with the pricing guidelines of Obamacare.

Report: Claims cost of individual health insurance in WA likely to rise 13.7 percent by 2017

A new report by the Society of Actuaries predicts that medical claims costs for individual health insurance plans -- meaning coverage that people have to buy on their own, rather than get through an employer or government program -- will rise 13.7 percent in Washington by 2017. That's substantially less than in many other states.

About 300,000 Washingtonians now buy their own insurance on the individual market. That number's expected to increase sharply next year as people who are now uninsured start buying coverage.

It's too soon at this point to say what the final rates will be. We don't expect to see the first rate proposals for these policies until next month, and premiums include more than just medical claims costs.

There is, however, some good news for many of these folks. The report does not attempt, for example, to factor in the federal subsidies that many people in the individual market will qualify for, starting in January. Under federal health care reform, a family of four earning up to $94,200 could qualify for help paying for their insurance.

Also, under health care reform, the vast majority of policies will cover much more than they do today. It's rare, for example, to find an individual health plan that covers prescription drugs. Many don't cover the birth of a child. Starting in January, most policies will have to cover those things and more.

Lastly, the sad fact is that the individual health insurance market is no stranger to big increases in rates. In 2009 -- well before health care reform -- those policies in Washington rose an average of 16.5 percent. That's in a single year. And the year before that was even worse: an average increase of 18 percent.

One Ringy Dingy

The latest excuse for not enrolling in #Obamacare? 

According to Dirty Harry . . .

Senate Majority Leader Harry Reid (D., Nev.) said the fault of struggling to sign up on the Obamacare exchanges didn’t lie with the faulty website, but with the people who weren’t “educated on how to use the Internet.”

Explaining the reasoning behind the latest Obamacare delay, Reid said too many people just didn’t know to use their computer properly and needed more time. 

Free Beacon

Guess they don't know how to use the telephone either.

Tacoma man arrested for insurance fraud

A 24-year-old man facing multiple charges in an insurance fraud case was arrested this morning by the King County Warrant Team at a residence in Tacoma.

Andre Romeo Zamora Sarmiento was charged last year with second-degree theft, forgery and insurance fraud for allegedly filing altered and fake medical bills after a car accident. He failed to appear for arraignment on Dec. 24, 2012, resulting in the warrant that led to his arrest this morning.

The fraud case involves a November 2011 auto collision in Tacoma. A car turned in front of Zamora's car, cutting him off, and leading to the crash.

Zamora subsequently filed a claim with the other driver's insurer for injuries to his back and $2,542 for vehicle damage to his vehicle. For the medical claims, Zamora filed several bills totalling $14,857.

A subsequent investigation by our anti-fraud Special Investigations Unit revealed that several bills were altered and grossly inflated. A bill for $360, for example, had a "9" added, to make it look like a bill for $9,360. A bill for $33.50 was turned into what looked like a bill for $3,358.80.

All told, Zamora submitted claims for $13,236 more than he actually paid. The insurer paid Zamora $5,497 before discovering that the bills were fraudulent.

If I have a child care business in my home, can my insurer cancel my homeowner policy?

An insurer cannot decline to issue a homeowner policy, cancel or fail to renew a homeowner policy for the sole reason that the customer operates a home-based child care, in accordance with state rules (WAC 284-30-700). However, insurers may exclude liability coverage for any liability that arises related to the child care business. People in Washington who operate home-based child care businesses should talk to an insurance agent or broker about seeking a separate business liability policy to insure themselves and their business in the event of a liability issue. Find a licensed agent or broker.

People who care for children in their homes typically require a license from the Department of Early Learning. Read more on DEL’s website.

People who run other home-based businesses should contact their insurance agent to find out what types of coverage they may need.

Read more about insurance and home-based businesses.

How to appeal when your health insurer says no

Seattle's KING 5 TV recently did a story on the case of a Tacoma man diagnosed with stage 4 cancer. After trying other treatments, his apparent only remaining option is an experimental anti-cancer drug that his insurer refuses to cover.

He contacted our office, and we're helping him navigate the appeals process. Many people don't realize that a denial by your health insurer is not the final word on the matter. There are multiple rounds of appeals available, including to what's called an "independent review organization," which is a group that has the power to require your insurer to cover a treatment or procedure. And more than a quarter of the people who appeal to an independent review organization win.

How to appeal the decision? We've put together a detailed appeals guide with sample letters to send your insurer. Take a look -- and don't give up.

Here's the story from KING 5:

Deadline? *What* deadline?!

Earlier this morning, Bob noted that the Obamastration itself has acknowledged that it has no "statutory authority to extend the open enrollment period in 2014."

But that was then, and this is now:

"Federal officials confirmed Tuesday evening that all consumers who have begun to apply for coverage on HealthCare.gov, but who do not finish by Monday, will have until about mid-April to ask for an extension."

Now, leaving aside the legal challenge that this poses (as if legalities were of any interest to this regime), one needs ponder a simple question:

Why?

That is, why would they extend the enrollment period, after so vehemently denying that they would do so?

I think a good part of the answer lies here:

"The results were bleak—just two-thirds of the overall respondents knew that they had to get health insurance this month or face a penalty .. Clearly some of those most likely to be affected by the ACA were ill-prepared to navigate the new health insurance environment"

We already know that the vast majority of those who have enrolled are either folks who have lost their previous insurance or who are being shunted to Medicaid.

And we know that the uninsured are staying away from ObamaPlans in droves.

Seems to me, this extension means one thing: the ObamaTax enrollment numbers must be truly, epically dreadful.

Still not convinced?

Then how 'bout this little nugget, buried inside the  WaPo story linked above:

"Under the new rules, people will be able to qualify for an extension by checking a blue box on HealthCare.gov to indicate that they tried to enroll before the deadline."

Seems harmless enough: simply show that you've made a good faith effort to enroll and ... wait ... What's this:

"This method will rely on an honor system; the government will not try to determine whether the person is telling the truth."

What could possibly go wrong?

Insurance News - Tuesday, March 26, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, March 26, 2013:

• On April 1, Chinese medicine practitioners and acupuncturists will have to be licensed in Ontario. This also means they meet they SABS definition of "regulated health professional" and will be able to complete treatment plans.
• Auto insurance and automated vehicles: So who is the consumer? 
• Keeping to the same theme: Your car may be invading your privacy. 
• Montana panel considers ending unisex insurance rates - this would be a reversal of a current trend on prohibiting rating based on gender.
• New Yorkers are calling their state lawmakers’ offices to blow the whistle on neighbours who are illegally registering their cars out of state to save money on auto insurance.
• You know you're ultra-rich when you hire fake ambulances to drive you through traffic.

Pants on Fire

The Obamacare open enrollment deadline is just around the corner. March 31, 2014 in case you are wondering.  

If you haven't applied by then you can't buy coverage until 11/15/14.

Unless you have a qualifying event that creates a special enrollment period.

Many wonder if the deadline will be extended.

Here is your answer.

"We have no plans to extend the open enrollment period," HHS official Julie Bataille said. "In fact, we don't actually have the statutory authority to extend the open enrollment period in 2014."

Weekly Standard

When has that stopped anyone?

This from an administration that said everyone must have coverage, and then granted over 1200 exemptions. Said you had until 12/15/13 to apply for a 1/1/14 effective date . . . and then changed it. Originally started the 2015 open enrollment in October, 2014 then delayed it until after the 2014 elections. Said the mandate applied to everyone and then modified it for business.

Good thing they lack the statutory authority to modify the law.

Oops!

A newly discovered glitch in the main ObamaCare website reportedly is

giving thousands of people the wrong information about whether they qualify for premium subsidies. 

Because of the glitch, some people may be initially told they qualify for subsidies when they don't. Others may be told they don't qualify when they do. 

Fox News

Can you say clawback?

Preview

Care to take a stab at where premiums will be on 2015 Obamacare plans? Here is a preview of things to come.   

Two months before health insurers must submit rate proposals for 2015 to government regulators, WellPoint Inc. fired a surprising shot across their bow by predicting it may ask for “double-digit-plus” increases.

BenefitsPro

Double digit.

As in 10% and higher.

My money is on higher.

Of course this rocket surgeon has his own thoughts.

“The double-digit increase surprised me,” said Stephen Zaharuk, a New York-based analyst at Moody’s Investors Service, in a telephone interview. “If everything’s working according to plan, then the increases should be where the medical trend is, which should not be double-digit.”

Seriously?

Obviously Mr. Zaharuk has no clue how health insurance rates are determined. Maybe he should stick to predicting grocery prices.

“The rules of the road keep changing,” said Dan Mendelson, chief executive officer of Washington-based consulting firm Avalere Health. “These companies have to hedge their bets.”

Rule changes?

No kidding.

Expect DC to call for broader networks and expanded formularies, just to name a few.

About that *Other* Big ObamaTax case

Cato's Michael Cannon has been following the Halbig case for quite some time. Last we checked, it looked like a US District judge had shot down this case, which argues that IRS enforcement of the (Evil) Mandate was illegal in 34 of the 58 states.

Reports of the case's death, however, are greatly exaggerated. As Michael reports today:

"[A]ppellate Judge Thomas B. Griffith clarified that an Exchange established by the federal government is not “established by the State.” When the government’s lawyer argued that federally established Exchanges meet that requirement, Judge A. Raymond Randolph cut him off: “That is a leap. That is not statutory interpretation.”

Interesting development.