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‘Multiple-Employer’ Health Plans: Using Federal Law As A Shield From State Insurance Investigators

Federal officials hope to crack down more effectively on operators of “multiple employer” health plans  that have defrauded small businesses and their workers of hundreds of millions of dollars, often leaving them stuck with unpaid medical bills, according to new rules proposed Monday by the Obama administration under the health care legislation.

Known as Multiple Employer Welfare Arrangements, or MEWAs, such plans have a checkered history under operators who used federal law in the past as a shield from state insurance investigators. The plans are set up for small businesses to provide their workers with lower cost coverage by pooling premium contributions from the employers and workers together for benefits that are paid from the arrangement.

Yet an unintended consequence of the Employee Retirement Income Security Act of 1974, which has restricted states from regulating multiple employer arrangements, allowed these plans to dodge state insurance examiners, often after high fees were paid and money was then unavailable to pay medical claims and other benefits.

In the last two decades, the Department of Labor said it had initiated 800 civil and more than 300 criminal investigations, but often had been unable to prevent the operators of the plans from draining assets of the plans through a variety of schemes that included “excessive administrative fees or outright embezzlement resulting in harm to participants and their families,” the agency said in a statement.

Under the rules proposed Monday, the Secretary of Labor would have the authority to issue a “cease and desist order” when federal officials believe fraud is taking place. The secretary can also freeze assets, stop marketing and certain other business practices.

“For the first time, the federal government has some tools that we have never had to get at these MEWAS early before the money is gone and everybody is left in the lurch,” said Phyllis C Borzi, assistant secretary of labor for the Employee Benefits Security Administration. “Once we have these new tools, hopefully the losses will go down because we will be able to intervene before the money is gone.”

There have been many high profile cases of defrauded MEWAs, like that of TRG Health Plan, which had more than 11,000 plan subscribers and operated in more than 40 states and left behind more than $17 million in unpaid medical claims when it was terminated 10 years ago. The labor department alleged TRG’s operators diverted assets to accounts of an affiliated marketing firm, failed to charge adequate premiums and did not have sufficient assets to pay benefits.

Often, small employers, unions or trade associations will turn to a MEWA for affordable benefits because an insurance company will not cover those who may have an older population of workers or employees who might be in poor health. So analysts say operators of MEWAs bilked the most vulnerable of Americans in search of affordable coverage for themselves and their workers.

Take the National Writers Union, which turned to a MEWA known as Employers Mutual when their insurance carrier dramatically raised rates. The plan, based in Nevada, sold benefits to 22,000 policy holders and was unlicensed in states, claiming its structure did not require it to be licensed. The plan left behind more than $24 million in unpaid claims, a 2004 General Accounting Office report said.

“Whenever people are desperate for affordable coverage, they look for alternatives and unscrupulous individuals target those kinds of people,” said Mila Kofman, the former superintendent of insurance for Maine who is professor at Georgetown University’s Health Policy Institute. “Many have been hauled into federal court but the U.S. Department of Labor didn’t have tools to act quickly.”

Federal officials estimate more than 2 million Americans are enrolled in hundreds of MEWAs but they cannot be certain because they don’t know.

Another crucial part of the proposed regulations are that MEWAs have to register with the Department of Labor before operating or be subject to various penalties. The lack of licensure or registration made MEWAs a fertile opportunity for frauds.

“We don’t even know how many of these there are,” Ms. Borzi said.

Following a 90-day public comment period, the proposed rules will become final, probably by mid-2012.

The insurance industry, which is not known for welcoming new regulations, welcomed the labor department’s proposals.

“We are pleased the government is going to have these added powers,” said Alissa Fox, senior vice president of the Blue Cross and Blue Shield Association. “These entities are avoiding oversight and harming consumers. It hurts consumers and we are concerned when consumers are being hurt by entities that are not going to be paying these bills.”

 

By: Bruce Japsen, The New York Times Prescriptions, December 5, 2011

December 6, 2011 Posted by | Health Care, Insurance Companies | , , , , , | Leave a comment

Sharp Rise In Premiums Exposes Health Insurers’ Greed

According to a study released today by the Kaiser Family Foundation, 2011 health insurance premiums for employer-sponsored family healthcare benefits rose 9 percent over last year’s prices, leaving employees to pay, on average, $4,129 and employer contributions at $10,944. The number represents a surprising rise given that increases experienced in 2010 were just 3 percent.

So, why the sudden increase?

We know that Americans are using fewer medical services since the economy took a dive as people are staying away from the doctor and putting off non-life saving surgeries, such as knee and hip replacements, until they have more confidence that they will have the money required to pay deductibles and co-pays. We also know that fewer medical services are being utilized as a result of the increased popularity of Health Safety Accounts which require deductibles in excess of $2,000 per family, and employer provided policies that have increasingly large deductibles and co-pays.

As a result, can it possibly make sense that medical costs are increasing by the 9 percent reflected in the hefty premium hikes? In a word, no.

That will not stop the  anti-Obamacare forces, of course, from putting  the blame squarely on healthcare reform. In a sense, I suppose the Affordable Care Act does bear some of the responsibility—if you can consider motivating the  health insurers to falsely inflate their prices, by forcing them to do  the right thing, to be a blamable offense.

Beginning  next year, health insurers will be required to justify any increases in  premium rates above 10 percent. They will further be obligated to refund money to customers if an insurer is found to have spent less than  85 percent of their premium income on medical expenses. Thus, it is  hardly a stretch to conclude that the insurers are simply taking their  last chance to raise premium rates before they find themselves having to be more accountable to the government, particularly when they are pretty much admitting to as much.

As noted by Reed Ableson in The New York Times:

Throughout  this year, major health insurers have defended higher premiums—and  higher profits—saying that their expenses would rise once the economy  recovered and people believed they could again afford medical care. The struggling economy will probably keep suppressing demand for medical care, particularly as people pay a larger share of their own medical bills through higher deductibles and co-payments, according to benefits  consultants and others. About three-quarters of workers now pay part of  the bill when they go see a doctor, and nearly a third have a deductible  of at least $1,000 if they have single coverage, up from just one in 10  in 2006, according Kaiser.

So, the insurance  company defense is that they expect prices to rise sometime in the  future (clearly an undefined period) and they want to be ready. Somehow,  this justifies them to dramatically raise their premium prices now, at  time when their costs are actually less and their profits are through the roof.

Not only is such behavior astoundingly predatory, the insurers are playing a major role in keeping the economy in the dumps, as it is precisely this sort of unnecessary premium increase  that causes employers to avoid hiring more employees.

For those  who believe that we should leave it to the free market to establish the prices  in the medical system (of which insurance will always be a necessary  part), maybe they can explain how the system is working in this instance? In a time where patient control has risen dramatically as consumers decide if and how they will—or will not—spend on medical services now that they have greatly increased responsibility for the familiy medical bills as a result of much higher deductibles, and at a moment where there are substantially reduced claims coming  onto health insurers’ balance sheets due to diminished use of medical  services, exactly what is the free market concept that justifies an  insurance company raising their premium rates? What’s more, at a time when fewer people are using physician’s services, why would costs go up?

Free market principles would suggest that lower demand should produce lower  prices. But that is clearly not what is happening.

I know what some of you are thinking—but before you say it’s all the government’s fault, I would hasten to point out that, with an apples-to-apples comparison,  there are no substantial new regulations hitting physicians this year  that did not exist last year. And before you blame the president’s health care reform program for the  insurance companies’ usurious behavior, note that the two million young  people who have been added to the insurance roles as a result of  Obamacare’s permitting these people to stay on the family insurance  policy, would not increase an insurance company’s costs by 9% over last  year’s prices. Indeed, adding all of these healthy kids to the insurance pools  should help insurers spread risk more effectively while collecting  additional premium revenues.

The bottom line is that there is  absolutely no justification whatsoever for the health insurance industry hitting employers with a 9 percent increase. It is a simple matter of greed and it is  precisely that greed that has long made access to healthcare continuously more  difficult for middle class Americans.

By: Rick Ungar, Mother Jones, September 27, 2011

September 29, 2011 Posted by | Conservatives, Consumers, Economic Recovery, GOP, Government, Health Care Costs, Ideology, Insurance Companies, Middle Class, Politics, Republicans, Right Wing, Teaparty | , , , , , , , , | Leave a comment

Koch Industries Buys Anti-Koch Web Addresses

In the eyes of the American public, Wichita-based Koch Industries is coming to stand more for right-wing string-pulling than for its blockbuster oil and gas business. For years, David and Charles Koch spent millions mostly behind the scenes to advance anti-environmental and anti-labor policies and to attack Democratic candidates for office. In the last two years, however, their expenditures have routinely made news. In the wake of the high-profile standoff in Wisconsin– where Gov Scott Walker was caught explaining to a prank caller impersonating David Koch his plans to break public employee unions– Koch Industries has dedicated time and money to mitigate fallout from the politics of the men in charge. The company’s website includes an op-ed and a video defending Koch politics. Today comes news that the company has been buying up anti-Koch web addresses as part of its new brand-management strategy.

Researchers at the progressive group One Wisconsin Now found that, on August 17, the day after the last of the recall elections in the state forced by Democrats aghast at Walker’s politics, Koch Industries bought up “at least three anti-Koch domains: StopKoch.com, StopKochIndustries.com, and AntiKoch.com.”

The domain name “StopKoch.com” for example has now been “parked” by an “online brand protection” firm called Melbourne IT on behalf of an administrator working from 37th Street in Wichita, Koch headquarters, and connected to a @KochInd.com email address.

“After spending over $40,000 to get Gov. Scott Walker elected less than a year ago and $250,000 on Republicans in Wisconsin’s recall effort, the billionaire Koch Brothers are already on the defensive against the ‘Stop Koch, Save Wisconsin’ buzz on the internet,” writes One Wisconsin Now.

One of the groups the Kochs presently bankroll is the activist organization Americans for Prosperity. AFP was a major pro-insurance industry player in the anti-health reform push last year, organizing tea party rallies and funding literature and commercials that made wild claims about the proposed legislation being a totalitarian assault on liberty.

Today, AFP is touring Colorado to rally support for favorable policies for big oil and gas companies. In a release announcing the “Running on Empty Tour,” AFP Foundation President Tim Phillips resurrects the kind of reaching anti-Obama rhetoric that characterized AFP’s contributions to the health care debate, where the president was viewed as a statist dictator seeking to euthanize Americans through “death panels.”

“Obama’s hostility toward domestic production and his desire to use high gas prices to change Americans’ driving behavior are contributing to the escalating cost of fuel,” Phillips is quoted to say in the release.

In fact, the Obama administration has made bold moves to open up drilling in the U.S. and has drawn criticism for doing so. Oil and gas companies own leases on tens of millions of acres onshore and offshore that they have yet to develop. A recent study by the Interior Department reported that half of all onshore federal leases are not currently being utilized by the industry.

At the top of the “newsroom” section of the Koch Industries website, the company runs a quote by Charles Koch that, to an increasing number of people, may serve mostly to bring to mind the sketchy political strategery funded by the brothers over the years.

“A positive reputation is built by behaving consistently with sound principles, creating real value, achieving compliance excellence and living up to commitments.”

By: John Tomasic, The Washington Independent, August 24, 2011

August 25, 2011 Posted by | Businesses, Class Warfare, Collective Bargaining, Conservatives, Corporations, Elections, Energy, Environment, GOP, Health Reform, Ideologues, Ideology, Insurance Companies, Jobs, Koch Brothers, Labor, Politics, Public Employees, Republicans, Right Wing, States, Teaparty, Union Busting, Unions, Voters, Wisconsin | , , , , , , , , , , , , | 1 Comment

President Rick Perry’s America: No Country For Women

Rick Perry has been governor of Texas since before I was old enough to vote. As a native Texan born in the millennial age, I put Rick Perry in the same category as a cassette player or an AOL subscription — something that has seemingly always been around, but has long since lost its purpose. Coming of age as a woman in Rick Perry’s Texas is sort of like living in the wild, wild west, like an Annie Ovary of women’s health, dodging old men wielding vaginal probes and vaccine mandates. With a governor who has a women’s health record that’s a bumpy country mile long possibly becoming our next president, what would it mean for women across America? Allow me.

First order of business in the Perry presidency would be the creation of the Department of Interior Contraception, or DIC. DIC would oversee approved contraceptive devices under Perry’s watchful eye, the top item on the list being the most widely accepted, reliable option available to God-fearing Americans these days: abstinence. Now, while it’s true Texas has the 3rd highest teen birth rate in the country and also true that a 2005 study found teens in Texas were actually having more sex after undergoing an abstinence-only program, Rick Perry still stands by the practice. Why? Not because there are actually any studies backing him up but “from my own personal life,” Perry told the Texas Tribune’s Evan Smith in an interview earlier this year. Comforting, isn’t it? Rather than President Perry making decisions based on studies and figures, the free world will instead hinge on the regularity of his wife’s cycles.

But don’t take Rick Perry’s word for it. Starting in 2012, women (and their partners — suddenly that cowboy vote doesn’t sound so good, does it gentlemen?) will get their very own chance to practice an abstinence-only approach when the recent law that requires health insurance companies to cover birth control will no doubt be rolled back by President Perry.

That brings us to the question of how Perry plans to punish women who don’t fall into line with his tried and true abstinence methods. After all, without threat of punishment, I think it’s safe to say Perry will probably be the only person in America abstaining from sex. For the sinners, Perry has already started a little pilot program right here in Texas.

The state now requires mandatory transvaginal sonograms for women who are 8 to 10 weeks pregnant and seeking abortions. The bill, which Perry declared a piece of “emergency legislation” during the last legislative session, requires the doctor to describe the fetus and play audio of the heartbeat prior to the abortion procedure. President Perry’s version of this bill will include an amendment to play Lee Greenwood’s “God Bless the U.S.A.” during the procedure.

Alas, if all of this has you feeling down, ladies, don’t fret. Think of all those cute babies we’ll get to have. But in Rick Perry’s America, you may want to home school. Texas ranks first in the nation in adults without high school diplomas. The future also doesn’t look so bright for all those precious little ones when it comes to health insurance and potential jobs: Texas boasts another first in the nation in the percentage of children without health insurance and, in 2010, Texas tied with Mississippi for the highest percentage of workers employed in minimum-wage jobs. No wonder Governor Perry wants Texas to secede. It’d sure make us look less stupid.

At a speech given to the United for Life group in June, Perry bragged about Texas’s recently-passed sonogram law and told attendees, “In Texas we have pursued policies to protect unborn children whenever possible.” And you can bet your left Fallopian tube that, if elected, he’ll continue to do the same for the unborn children of America. I just hope there’s a Plan B pill for what happens when all these children grow up — because President Perry, just like Governor Perry, certainly doesn’t plan to care for them.

After all, where Rick Perry comes from, that’s women’s work.

By: Rachel Farris, AlterNet, August 19, 2011: This essay originally
appeared
at MeanRachel.com.

 

August 22, 2011 Posted by | Class Warfare, Conservatives, Education, Elections, Equal Rights, Freedom, GOP, Governors, Ideologues, Ideology, Insurance Companies, Jobs, Politics, Republicans, Right Wing, State Legislatures, States, Teaparty, Women, Women's Health, Womens Rights | , , , , , , , , , , | Leave a comment

New Health Insurance Rules Would Let Consumers Compare Plans In “Plain English”

What would your health insurance cover if you got pregnant? How much could you expect to pay out of pocket if you needed treatment for diabetes? How do your plan’s benefits compare with another company’s?

Starting as soon as March, consumers could have a better handle on such questions, under new rules aimed at decoding the fine print of health insurance plans.

Regulations proposed by the Obama administration on Wednesday would require all private health insurance plans to provide current and prospective customers a brief, standardized summary of policy costs and benefits.

To make it easier for consumers to make apples-to-apples comparisons between plans, the summary will also include a breakdown estimating the expenses covered under three common scenarios: having a baby, treating breast cancer and managing diabetes.

Officials likened the new summary to the “Nutrition Facts” label required for packaged foods.

“If you’ve ever had trouble understanding your choices for health insurance coverage . . . this is for you,” Donald Berwick, a top official at the Department of Health and Human Services, said at a news conference announcing the proposal.

“Instead of trying to decipher dozens of pages of dense text to just guess how a plan will cover your care, now it will be clearly stated in plain English. . . . If an insurer’s plan offers subpar coverage in some area, they won’t be able to hide that in dozens of pages of text. They have to come right out and say it.”

Industry representatives said complying could prove onerous for insurers. “Since most large employers customize the benefit packages they provide to their employees, some health plans could be required to create tens of thousands of different versions of this new document — which would add administrative costs without meaningfully helping employees,” Robert Zirkelbach, press secretary for the industry group America’s Health Insurance Plans, said in a statement.

Insurance shoppers would also have to keep in mind that their actual premiums could change after they finalized their application, particularly in the case of plans for individuals, which can continue to adjust benefits based on detailed analysis of members’ health history over the next three years. (After 2014, the health-care law will essentially limit insurers to considering only three questions about applicants: how old they are, where they live and whether they smoke.)

The regulation, which is subject to a 60-day public-comment period, essentially fleshes out details of a mandate established by the the health-care law. But it also clarifies a question that the law left somewhat ambiguous: How soon into the application process can shoppers get the summary from insurers?

The regulations would require insurers to provide the summary on request, rather than waiting until someone applies for a policy or pays an application fee, a position that drew praise from consumer advocates.

“If consumers are really going to be able to compare their options, they should be able to easily get this form for any plan that they would like to consider,” said Lynn Quincy, senior health policy analyst for Consumers Union, the nonprofit publisher of Consumer Reports.

In addition to supplying the summary on demand, insurers would have to automatically provide it before a consumer’s enrollment, as well as 30 days before renewal of their health coverage. Plans must also notify members of any significant changes to their terms of coverage at least 60 days before the alterations take effect.

The summary form, which can be sent by e-mail, must be no longer than four double-sided pages printed in 12-point type. In addition to listing a plan’s overall premiums, co-pays and co-insurance amounts, it must include charts specifying the out-of-pocket costs for a range of specific services. A copy can be viewed at www.healthcare.gov/news/factsheets/labels08172011b.pdf.

By: N. C. Aizenman, The Washington Post, August 17, 2011

August 19, 2011 Posted by | Affordable Care Act, Consumers, Corporations, Government, Health Care, Health Reform, HMO's, Insurance Companies, Pre-Existing Conditions, President Obama, Public, Regulations | , , , , , , , , , , , , | Leave a comment

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