Insurance Quotes & Advice

Healthcare reform has been slow to take shape at the federal level.  For example, last year the President and Congress were unable to come to a compromise on the expansion of the State Children’s Healthcare Insurance Program, which provides affordable insurance for low income families with children.

The battle over the increased ”federalization” of healthcare is at a standstill, at least until the next administration takes office.  Thus the states have begun to try their hands at dealing with the issue of healthcare reform.

State approaches to reform vary considerably, often depending on the political and fiscal environment; demographic characteristics, insurance market dynamics, and other economic variables also affect a state’s capacity to act.

“More and more often we’re seeing states attempt to address health reform with a balance of coverage expansions, quality improvement efforts, and cost-containment strategies,” said Martinez-Vidal. “They continue to take the lead in addressing the problems of the uninsured.”

The number of uninsured continue to grow as the nation’s economy enters a difficult period.   The general decline in employer paid health coverage has also made a large impact.

For decades the focus of the nation’s healthcare policy was centered on the elderly but as the uninsured reached epic proportions that policy has shifted somewhat.  There is still the looming fiscal difficulties facing the Medicare program in the upcoming decade.

The problem with healthcare reform has always been the cost.  The healthcare system in this country is the most expensive in the world with the highest per capita cost.  Government dollars spent at all levels account for nearly half of the total money spent on healthcare in this country.

The states face a difficult challenge ahead of them and with the many different approaches being taken, the results I’m sure will vary considerably.

On Wednesday, congressional hearings were held on the insurance industry’s controversial use of credit scores in their risk models for calculating premiums.

At a lengthy congressional hearing in Washington on Wednesday, Florida Insurance Commissioner Kevin McCarty brought the state’s long-running battle with the insurance industry over these issues to the forefront. He argued that credit scores are not “fair and valid” criteria for setting insurance rates.

“Studies do show that credit scores can be predictors of future claim activity,” he noted in his prepared testimony. “But the same studies also show that the use of these scores disparately impacts certain classes of people.”

The auto and property insurance sectors have long used credit scoring as a basis for premiums, as it is allowed in much of the country.  The use of patient’s credit reports has also started to appear in the healthcare industry.

Consumer advocacy groups have been up in arms over the practice and claim that it is discriminatory.  The insurance industry meanwhile has fought strongly against any type regulation that would limit it’s use.

It wouldn’t surprise me if the bills banning the use of credit scores were passed.  The industry has faced a large public backlash ever since the aftermath of Hurricane Katrina over their claims paying practices.

Last week a California Superior Court denied Allstate’s appeal on an auto insurance rate reduction ordered by the state’s insurance regulater.

“The court rejected Allstate’s efforts to delay immediate savings to consumers,” said state Insurance Commissioner Steve Poizner in a news release. The insurer sought a delay from the court while it appeals a state decision “that Allstate’s existing passenger automobile rates are 15.9 percent in excess of what the law permits”

Allstate, which is the fifth largest auto insurer in the state was disappointed with the court’s ruling and released this statement.

“Allstate wants to lower its auto rates and reduce the cost of auto insurance in California, especially during difficult economic times for our customers,” said spokesman Peter DeMarco in a news release. “However, the proposed auto rate reduction Allstate is being asked to take is neither fair nor reasonable. We are reviewing the details of the Court’s ruling and will continue to explore our options going forward.

California’s auto insurance regulatory structure requires state approval before any rate changes can be implemented.  California was cited as glowing example, in a study released last week by the Consumer Federation of America, which claimed that states which used prior approval for auto insurance rates had premiums rise more slowly over a sixteen year period.

The state ordered rate reduction is expected to save California drivers an average of $124 annually per vehicle.