August 12, 2009
Nope. Not according to the Colorado Association of Health Plans and the Colorado Association of Insurance Underwriters.
The Health Care Task Force reconsidered the practice of gender rating in the individual health insurance market on August 10th. The initial effort to repeal the gender discrimination provision was carried last session in HB 09-1224 (Schafer – M. Carroll) but the insurance lobby was successful in rolling back into a study instead.
Here's what we know:
- Gender rating has been a prohibited practice of gender discrimination in the small and large group employer-provided insurance markets since the Civil Rights Act of 1964 as confirmed by the United States Supreme Court.
- Women are charged as much as 30 – 40% more than men for the same coverage in individual health insurance plans.
- Maternity coverage is not included in any of Colorado's individual health insurance plans.
- As of 2007, 18% of Colorado women had no health insurance.
- More than 130,000 Colorado women aged 19 – 64 received health insurance through the individual market in 2006-2007 and paid more than men.
- Under current Colorado law, a woman may pay more than a man for comparable coverage, even if she has less medical claims history.
- Women on average still earn less than men (approximate $0.77 to the dollar) and are less able to absorb the unjustified premiums increase.
- When women are disproportionately priced out of the individual market, we are are often taking their children with them to the roles of the uninsured.
- One in five Colorado women aged 18 – 44 had no health insurance. Among them, 46% worked full time and more than half reported having a household income of less than $25,000.
- In Colorado women (age 25) will pay between 1o% – 56% more than men for similar coverage.
- In Colorado women (age 40) will pay between 15% – 59% more than men for similar coverage.
- In Colorado women (age 55) will pay between 9% less and 2% more than men for similar coverage.
- A non-smoking woman will still pay more than a smoking man despite the evidence of increased health risk and therefore cost exposure.
Around the country, where states allow gender discrimination in individual health insurance markets:
- Women (age 25) are charged anywhere from 6% – 45% more than men for similar plans.
- Women (age 40) are charged anywhere from 4% – 48% more than men for similar plans.
- Women (age 55) are charged anywhere between 22% less and 37% more than men for similar health plans.
- The wide variability demonstrates that it is not based on actuarial data or the ranges would be closer.
If a person does not have access to health insurance through their employer and they are not otherwise legally indigent, the ONLY place he or she can get coverage is in the individual health insurance market where:
- They can refuse to underwrite people (for any price) for pre-existing conditions (and some carriers count pregnancy as a "pre-existing condition".
- The rates are already significantly higher than in the small or large group market.
- The more the individual health market fails women the more uninsured women and children we have at a greater cost to the system.
Insurance rating should be fair to men and women. Even though women are paying much more than men for the same coverage, it is important to note that coverage remains unaffordable and inaccessible to hundreds of thousands of men too.
Perhaps the strangest comments came from the insurance underwriters who when asked suggested that we "blame God" because men's parts were on the outside and women's parts were on the inside. Seriously? Perhaps his brain is on the outside. Rep. Joyce Foster thanked him for the visual but thought that basic fairness in paying similar price for similar coverage ought to rule the day.
And there is nothing like a policy discussion about gender to evoke a comment like, "women like to shop" from Rep. Jim Kerr who suggested that this "universal fact" should be put to use for women to do a better job shopping for insurance.
Maybe they should talk to their wives, daughters, sisters and women constituents about what they think about that stereotype.
That aside, the committee reviewed an enormous amount of data and research including testimony from NCSL where the other states that prohibited gender rating did not report any related problems with rate increases due to this or carriers leaving the market.
There are a lot of issues in health care that are complicated or hard to solve, but not this. The solution is easy. We just need to decide if we want to solve it.
August 11, 2009
If you haven't been following the Interim Committee on Pinnacol Assurance, you may want to. The state workers compensation insurance fund has the largest market share in the state (57%) and as a result directly or indirectly impacts most businesses and employees in Colorado, whether they know it or not.
The committee was created by SB 09-281 to "study, make recommendations and report findings on all matters relating to the operation of Pinnacol Assurance."
The purpose of this committee is to ensure that policyholders are getting the best deal, that injured workers are being treated appropriately and that our workers compensation insurer of last resort is solvent and stable.
There will be 6 committee meetings. The first was held August 4th which gave a history and overview of Pinnacol and Colorado workers comp.
Below is a short description of what we will be covering each day:
August 14 – Rates, Compensation, Expenses, Policyholders
August 31 – Medical Providers, Injured Workers
Sept 4 – Different Future Models (Private, Public, Risk Pool, Hybrid etc)
Sept 18 – Recommendations, Drafts
Oct 16 – Final Votes
You can obtain information about our schedule, who is on the committee, when and where we will meet and get copies of all documents reviewed by the committee by going to: http://www.state.co.us/gov_dir/leg_dir/lcsstaff/2009/comsched/09PinnacolAssurance.html
The state compensation insurance fund was first created in statute in 1915. It was created as a political subdivision of the state and operated as a state agency until 1987 when the SCIF was removed from the state agency and the State Compensation Insurance Authority was created. In 1990 the legislature changed the SCIA to the Colorado Compensation Insurance Authority and modified the governing board and in 2002 the legislature changed the name of CCIA to Pinnacol Assurance, funds were transferred from the state treasury to the board and while they remained a political subdivision of the state, they were further directed to operate like a domestic mutual insurance company.
Almost every state has a mechanism for the "residual market", sometimes known as an insurer of last resort. Historically, this was because of a lack of available insurance to cover workers compensation. Also, as states began mandating that employers provide workers compensation insurance to cover all employees, many carriers would refuse to underwrite higher risk industries. In order to make sure that all employees are covered and at a reasonable rate to employers, states saw the need awhile ago to have a residual market mechanism.
The Legislative Intent of the Workers Compensation Act in CRS 8-40-102 provides that,
"It is the intent of the general assembly that the "Workers Compensation Act of Colorado be interpreted so as to assure the quick and efficient delivery of disability and medical benefits to injured workers at a reasonable cost to employers, without the necessity of any litigation, recognizing that the workers' compensation system in Colorado is based on a mutual renunciation of common law rights and defenses by employers and employees alike."
The committee will be deciding if the current structure of Pinnacol in law has sufficient clarity, and will evaluate models used by the 50 states for their residual workers compensation markets, evaluate the pros and cons for injured workers, policyholders and the people of the State.
Questions began to emerge as people questioned why a non-profit political subdivision of the state could amass over $2 billion in assets, $1.2 billion in reserves and $700 million in surpluses (4 -6 time more than levels recommended by the Division of Insurance). Because surpluses have been generally growing at a rate of $100 million per year some people began wondering if policyholders were being over-charged or if injured workers were being wrongly denied treatment and benefits. Of course, there are some people who don't there is any role for oversight here at all.
While the committee has up to 8 bills available, we will not know what, if any, changes are appropriate until we hear the testimony and input. All ideas are welcome and will be considered.
Frequently Asked Questions:
Q: Is the committee considering reviving the prior discussion of cash transfer from Pinnacol?
Q: Are there other models for how states operate their workers compensation carrier of last resort?
A: Yes, several.
Q: Is Pinnacol Public or Private?
A: Pinnacol is a quasi-government state compensation insurance fund. It is a creation of state statute, a political subdivision of the state, pays no state / federal / property taxes or court fees. It's employees participate in the Public Employee Retirement Account (PERA) and its Board is appointed by the Governor and confirmed by the Senate. However, it is directed to operate LIKE a domestic mutual insurance company, so it will have features like a domestic mutual such as: being regulated by the Division of Insurance, filing lost-cost multipliers, and their ability to pay dividends to policyholders. It is legally different than a true domestic mutual insurance company in that it can only underwrite one line of business, that it is subject to the state auditor, and that it can not refuse to underwrite high risk business. The status of Pinnacol is not easy to understand and that very ambiguity has prompted some to recommend we clarify that status.
I am attaching a chart that clarifies the status:
July 09, 2009
Reprinted from the 50 State Report released by the Center for American Progress, I am re-printing below some relevant numbers for Colorado.
Colorado Needs Health Care Reform
Colorado citizens are losing health care every day. In Colorado, 100 people are losing their health care every day during this economic crisis. Nationally, 14,000 people are losing their health insurance every day. [Center for American Progress Action Fund, 3/5/09]
Colorado has seen a 14 percent increase in the number of uninsured since 2007. [Center for American Progress, 5/4/09]
Our broken health care system is hurting the Colorado economy. The Colorado economy loses between $2.1 billion and $4.19 billion every year due to lost productivity stemming from the uninsured. And we are losing between $124 billion and $248 billion nationwide every year. [Center for American Progress, 5/29/09]
The average family premium in Colorado costs $1,100 more because our broken health care system fails to cover everyone. Nationally, the average family premium costs $1,100 more. [Center for American Progress, 3/24/09]
Colorado consumers have little choice in health care. Wellpoint Inc. holds 29 percent of the market. They control 53 percent of the market together with one other company, UnitedHealth Group Inc. [Center for American Progress, 6/16/09]
Colorado doctors support health care reform. Dr. Mark Earnest of Denver, CO says, "In the current system, what frustrates me the most is inequities in care and coverage. The tremendous amount of resources spent on denying care rather than providing it and improving it. The disproportionate voice of Pharma and the insurance industry over the needs of individuals. The perverse incentives for providing more of what's expensive and ineffective over primary and preventive care." [Doctors for America, Voices of Physicians, http://www.voicesofphysicians.org/]
Reforming our health care system is key to economic recovery. Half of all people filing for home foreclosure nationwide in 2008 cited medical problems as a cause. [Christopher T. Robertson, Richard Egelhof, and Michael Hoke, "Get Sick, Get Out: The Medical Causes of Home Foreclosures," Health Matrix 18 (2008): 65-105.]
Health care costs for small businesses have grown by 30 percent since 2000, and our manufacturers spend more per hour on health care than manufacturers in Canada, Japan, and the United Kingdom combined. [RAND, "Economic Burden of Health Insurance Increasing for Small Employers Providing Health Insurance," 4/4/08]
Health system modernization can save $600 billion over 10 years. [Center for American Progress Action Fund, 5/11/09]
June 23, 2009
I have the honor of Chairing the Interim Committee on Pinnacol Assurance. For those of you who are interested in the committee, the final appointments have been made in compliance with the statute and by the leadership of both the Democrats and Republicans. The committee will consist of the following:
Members of the Pinnacol Interim Committee:
Chair: Sen. Morgan Carroll (D-Aurora)
Members: Sen. Mary Hodge (D-Brighton)
Sen. Lois Tochtrop (D-Thornton)
Sen. Ted Harvey (R- Highlands Ranch)
Sen. Shawn Mitchell (R-Broomfield)
Rep. Sue Ryden (D-Aurora)
Rep. Joe Miklosi (D-Denver)
Rep. Sal Pace (D-Pueblo)
Rep. Cheri Gerou (R-Jefferson)
Rep. Bob Gardner (R-Colorado Springs)
Gary Johnson, Board Chair, Pinnacol Assurance
Pete Meersman, Pinnacol stockholder
Marcy Morrison, Division of Insurance
Dr. Lynn Parry, fmr President CO Medical Society and Pinnacol policyholder
Ken Ross, CEO, Pinnacol Assurance
Mark Simon, injured worker
Purpose: The purpose of this interim committee is to ensure Colorado policyholders are paying the lowest premiums possible, that injured workers are getting the medical care and benefits they need to get back to work, and that Colorado's "workers compensation insurer of last resort" is stable, successful and solvent.
August 4 (State Capitol, 200 E. Colfax Ave, House Committee Room 0112)
August 14 (HCR 0112)
August 31 (Legislative Services Building, 14th & Sherman, LSB-A)
September 4 (HCR 0112)
September 18 (HCR 0112) and
October 16 (HCR 0112)
The hearings will be held 9:00 – 5:00 PM with a break from 12:00 – 1:30 PM.
If you or anyone you know is interested in the treatment of injured workers, employees, policyholders, employers or the future of Pinnacol Assurance please contact me at email@example.com. Input from the public is welcome.
Each hearing day will include a formal agenda with expert witnesses designed to help explore the different issues involved to help make fully informed public policy decisions. There will also be a designated portion for open public testimony on each hearing day.
May 30, 2009
Most people already realize that our current health care "system" is no system at all and isn't working. But I think below are some key statistics to understand the scope of the problem and therefore better inform how we solve it!
• 792,000 Uninsured Coloradoans (Co Health Institute 2006)
• We are getting sicker, not healthier
• We are spending more money for less coverage
• Insurance companies make their profit in over-charging premiums and denying necessary health care.
• Insurance industry can use people who are not licensed and qualified to interfere and deny necessary medical treatment in Colorado.
• Medical errors are now the 8th leading cause of death in the US with 98,000 preventable deaths every year.
• 2000 – 2007 Premiums Rose by 98% (Kaiser Family Foundation)
• Insurance Companies Spend $98 Billion in excess administration per year (McKinsey & Co 2007)
• From 1998 – 2007, Insurance Industry Spent over $1 Billion in lobbying, the Pharmaceutical industry spent over $1.3 Billion in lobbying, for profit Hospital and Nursing Homes spent $530 Million on lobbying (Open Secrets.org)
• That $3.95 Billion in lobbying activities would have been enough to pay for an entire year of insurance premiums for over 1 Million people. (Kaiser Family Foundation)
• The insurance industry is sitting on over $600 Billion in surpluses, which is more than the gross domestic product of 193 countries. (Consumer Federation of America 2007, CIA World Fact Book)
• The Insurance and pharmaceutical industries remain in the top 10 industries for making political contributions and for hiring and use of lobbyists to influence policy.
• Health Insurance companies made over $12 Billion in profit in in 2007 (not counting executive salaries, stock options, administration, reserves or surpluses) Forbes
• $ 3 Billion paid in insurance executive compensation and stock options (Forbes)
• U.S. spends $216.7 Billion in prescription drugs in 2006, 5 times the amount in 1990. (KFF, Prescription Drug Trends, 2008).
• From 1997 to 2007 the number of prescriptions purchased increased by 72%, where population growth was only 11%.(KFF, Prescription Drug Trends, 2008).
• The push to prescribe is driven as much or more by feeding the bottom line of pharmaceutical companies as for our health, has increased the number of medication errors, increased the amount of prescribed uses not approved by the FDA, and is consumed in such high numbers pharmaceuticals have now contaminated our drinking water.
• Drug companies spend $30 Billion per year in marketing and advertising controlled their controlled substances and $7 Billion per year in industry gifts to providers, hoping to influence prescribing.
• The top 12 pharmaceutical industries reported a combined profit of $79.4 Billion in 2007 and $78.6 Billion in 2008. (Fortune 500, CNN Money 2008)
• Consolidation of Ownership & For Profit Mergers are spiking costs and reducing choices for consumers.
• Hospitals have moved from non-profit to for-profit and there are now only 3 for-profit companies who own access to Colorado's hospitals.
• The concentration of ownership in few corporate hands in health care is triggering concerns by the US Department of Justice and is raising real anti-trust concerns.
• According to a Harvard study 54% of bankruptcies were medical bankruptcies caused by the high cost of health care.
This is not acceptable, this is not sustainable, this is not moral, this is not sane.
• It would cost $77 Billion to provide full medical coverage to ALL Americans (McKinsey & Co 2007)
Taxpayers are presently subsidizing these for profit- corporations in the form of tax breaks, deductions for advertising and deductions for their lavish salaries, costs and trips. If we removed the current tax breaks for these industries we could fund universal health care for all.
If we moved from for-profit to a non-profit delivery model of health care we could fund universal health care for all.
The amount of insurance surpluses alone could fund total coverage to every American for 8 years.
We have spent billions more on wall street bailouts that it would cost to provide health care to every single American for decades. The question is, where are our priorities?
Under the 208 Commision on Health Care report, The Colorado Single Payer Proposal was the only one of five state proposals evaluated by the Lewin Group in 2007 that demonstrated the ability to cut net state health costs – by $1.4 billion — and to provide comprehensive health coverage for all residents of Colorado. Savings include $2.8 billion reduced administrative costs and $2.6 billion reduced out-of-pocket expenses.
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