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May 29, 2008

Health Insurance Company Paid its Workers Bonuses to Cancel Patient Policies

Health insurance company Health Net Inc. rewarded employees for finding ways to drop customer policies and not pay for their medical expenses, according to an investigation by the California Department of Managed Health Care (DMHC).

Since 2005, the DMHC has been investigating five of the seven insurance companies that provide health care plans to individuals in California. The department is attempting to crack down on the practice among insurers of dropping people's coverage based on often accidental errors in their enrollment applications. In many cases, people's policies have been dropped after they submitted medical claims.

The DMHC has fined Health Net $1 million for failure to disclose a program in which employees received bonuses for meeting or exceeding quotas for health insurance policies to be dropped. The department continues to investigate Health Net and has yet to determine if the dropping of policies or the bonus program are illegal.

The DMHC describes itself as the only stand-alone watchdog agency for managed health care in the country. Since 2005, it has fined Blue Cross $1 million for rescinding its members' health plans and $200,000 for rescinding one person's plan in particular. It has also fined Kaiser Permanente's Kaiser Foundation Health Plans $325,000 for illegally rescinding two policies.

"None of the plans that we are investigating thus far have had an adequately fair process" for dropping policies based on application errors, said DMHC Director Cindy Ehnes.

Health Net's employee bonus program was revealed in the course of a lawsuit by a breast cancer patient who had her health insurance policy dropped by the company after she became sick. The company dropped 1,600 policies between 2000 and 2006, avoiding paying $35.5 million in medical fees.

Ehnes and California Insurance Commissioner Steve Poizner have proposed new regulations that would require health care providers to find that customers deliberately misrepresented information on their applications before dropping their coverage.

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Posted by healthinsurance at 11:31 AM | Comments (0)

May 26, 2008

Polls show health care a growing concern for Californians

A new poll shows concerns over rising health care costs have kept pace with other major economic worries - second only to skyrocketing gas prices and tied with getting a job or raise that pays enough to cover increased living expenses.

The survey by the Kaiser Family Foundation, being released today, found that 44 percent of the more than 2,000 adults interviewed April 3 to 13 ranked paying for gas as a serious problem, compared with 29 percent for jobs and 28 percent for health care.

Difficulties paying for rent or mortgage followed at 19 percent, with food and credit card or personal debt close behind at 18 percent.

Health experts said the Kaiser poll, along with other studies released this week, show that health care remains in the forefront of Americans' concerns despite the mortgage crisis and growing overall economic woes. A Field Poll released Monday showed nearly 75 percent of Californian voters would have approved a health reform package brokered by Gov. Arnold Schwarzenegger and Democratic leaders that failed in the Legislature earlier this year.

"It is surprising to see that problems paying for health care are right up there with the top pocketbook issues that average Americans are facing and are much higher than some of the other problems you'd expect to see at the top of the list," said Drew Altman, president of the Kaiser Family Foundation, a health philanthropy in Menlo Park.

The poll showed that health care also plays a significant role in lifestyle decisions. Twenty-three percent of those surveyed said they or a member of their household either switched or stuck with a job because of health care benefits. Seven percent said that health care was a factor in their or a household member's decision to marry within the past year.

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Posted by healthinsurance at 02:26 PM | Comments (0)

May 22, 2008

California Insurance Department Encouraging Residents to Use Online Personal Health Records

Not enough California residents are using online personal health records offered by insurers and managed care groups in the state, according to a report released on Tuesday by the state Department of Insurance, the Sacramento Bee reports. The report was based on a survey of California's major insurers. The report states that PHRs are secure and efficient and allow people to better manage their health care and handle their health insurance claims. Based on the report, the state is encouraging residents to use PHRs. The department also is expected to announce the creation of a working group that would aim to ensure patients can keep their PHRs when they switch insurance companies.

Some privacy advocates have expressed concern about PHRs. Sue Blevins, founder and president of the Institute for Health Freedom, said, "While providing information is essential when seeking services, one shouldn't be forced to give up privacy and the freedom to withhold consent." Blevins said, "In fact, as the nation moves toward interoperable electronic medical records, it's important for citizens to gain greater privacy and control over their health care information." However, state officials on Monday said that the PHRs available through insurers in the state are securely managed (Glover, Sacramento Bee, 5/20).

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Posted by healthinsurance at 09:33 AM | Comments (0)

May 15, 2008

Kaiser patients to receive health coverage again

Kaiser Permanente today became the first California health plan to reinstate the individual insurance policies of consumers who were improperly dropped, often after running up expensive medical bills.

The California Department of Managed Health Care announced that Kaiser will offer coverage to 1,092 consumers whose policies were rescinded from 2004 until 2006, when Kaiser stopped the practice. The state has been investigating the five largest health plans for retroactively dropping consumers for making minor mistakes about their medical histories on their health insurance applications.

Kaiser will also pay a $300,000 fine.

One of those dropped consumers, Denise Fenton of Lake Forest said she bought an individual Kaiser policy because she’s self-employed. While insured, she was diagnosed with diabetes. Kaiser then dropped her, she says, calling her diabetes a preexisting condition.

“I was suddenly left with no insurance and now knowing I had diabetes I was going to have to disclose it, basically making it impossible for me to get health insurance from anyone else,” she said.

Fenton said she was able to form a corporation and then qualify for Kaiser insurance again, but at double the price.

Cindy Ehnes, director of the agency, said Health Net will be the next insurer to approve a similar plan to reinstate 85 consumers.

In addition to the offer to repurchase their insurance, Kaiser will reimburse those dropped for medical expenses accrued while they were insured, but that were not paid by Kaiser once their policies were canceled. Kaiser will also pay for medical bills incurred after consumers lost their health coverage.

Ehnes estimated that roughly 4,000 more Californians were rescinded by the other major health plans. The state is undertaking a review of patients from other health plans who were rescinded to determine if insurers should be ordered to reinstate them.

William Shernoff, a Claremont attorney representing several Orange County patients who are suing other insurers who dropped them, said though Kaiser wasn’t a big player, he hopes the other health plans will follow suit.

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Posted by healthinsurance at 01:59 PM | Comments (0)

May 13, 2008

California polls show health care a growing concern

A new poll shows concerns over rising health care costs have kept pace with other major economic worries - second only to skyrocketing gas prices and tied with getting a job or raise that pays enough to cover increased living expenses.

The survey by the Kaiser Family Foundation, being released today, found that 44 percent of the more than 2,000 adults interviewed April 3 to 13 ranked paying for gas as a serious problem, compared with 29 percent for jobs and 28 percent for health care.

Difficulties paying for rent or mortgage followed at 19 percent, with food and credit card or personal debt close behind at 18 percent.

Health experts said the Kaiser poll, along with other studies released this week, show that health care in California remains in the forefront of Americans' concerns despite the mortgage crisis and growing overall economic woes. A Field Poll released Monday showed nearly 75 percent of Californian voters would have approved a health reform package brokered by Gov. Arnold Schwarzenegger and Democratic leaders that failed in the Legislature earlier this year.

"It is surprising to see that problems paying for health care are right up there with the top pocketbook issues that average Americans are facing and are much higher than some of the other problems you'd expect to see at the top of the list," said Drew Altman, president of the Kaiser Family Foundation, a health philanthropy in Menlo Park.

The poll showed that health care also plays a significant role in lifestyle decisions. Twenty-three percent of those surveyed said they or a member of their household either switched or stuck with a job because of health benefits. Seven percent said that health care was a factor in their or a household member's decision to marry within the past year.

Click here for your free California health care quote now!

Posted by healthinsurance at 11:54 AM | Comments (0)

May 08, 2008

Bush Administration Suggests Leeway on Kids' Health Coverage

The Bush administration on Wednesday sent letters to state health officials to clarify a policy directive issued last year that restricts states' ability to expand eligibility for their versions of the State Children's Health Insurance Program, CQ HealthBeat reports (Carey, CQ HealthBeat, 5/7).

According to guidelines issued in August 2007, before expanding SCHIP eligibility to children in families with incomes greater than 250% of the federal poverty level, states first must demonstrate they have enrolled at least 95% of eligible children with family incomes below 200% of the poverty level (California Healthline, 4/21).

According to the Wall Street Journal, most states do not meet the requirements, which has meant that several states, including New York and Ohio, have had to abandon their SCHIP expansion plans.

The letter sent Wednesday will qualify "many" of the states that did not meet the 95% requirement by using data from the Current Population Survey, according to Herb Kuhn, deputy administrator and acting director for the Center for Medicaid and State Operations at CMS (Zhang, Wall Street Journal, 5/8).

The recent letter says that states can use data on Medicaid, SCHIP or private insurance to demonstrate they had reached the 95% requirement.

"This is an achievable, goal and based on conversations with states, we are convinced that a number of states have already reached this goal," Kuhn wrote in the letter.

The letter also clarifies that the guidelines do not apply to children already enrolled in SCHIP. It also says that state health officials can recommend other ways to prevent families from substituting SCHIP coverage for private insurance, CQ HealthBeat reports (CQ HealthBeat, 5/7).

The guidelines currently say that states seeking to expand SCHIP eligibility must establish a minimum of a one-year period of uninsurance for individuals in families with incomes greater than 250% of the poverty level (California Healthline, 4/21).

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Posted by healthinsurance at 01:59 PM | Comments (0)

May 06, 2008

California health care workers sue state over pay-cut plan

A coalition of health care groups sued the state Monday to prevent pay cuts to doctors, dentists, pharmacists and others who treat the poor, elderly and disabled.

The lawsuit filed in Los Angeles County Superior Court on behalf of California health care providers seeks an injunction to halt 10 percent cuts to Medi-Cal and Denti-Cal reimbursements scheduled to take effect July 1.

"These specific cuts strike at the core of the safety net," said Erica Murray, vice president of the California Association of Public Hospitals and Health Systems. "These are the trauma centers, the burn units, the places where people go not only when they don't have insurance or they have Medi-Cal, but if they have an automobile accident, their house burns down or another tragic event."

The state Legislature approved the cuts in February as part of Gov. Arnold Schwarzenegger's plan to trim a $16 billion budget deficit. Health care providers objected and said reimbursements already fell short of their costs for treating 6.7 million Medi-Cal patients.

The governor's office projected in January that the program would cost $36 billion, including $13.6 billion from the state's general fund, but health care associations expect those numbers to grow by the time a budget is passed. Most of the program is paid for by the federal government.

"The governor fully understands the devastating impact of these cuts which is why he continues to push for comprehensive health care reform and structural budget reform," said Lisa Page, a spokeswoman for Schwarzenegger.

The coalition, which is seeking class-action status, is optimistic it will prevail in its case against the Department of Health Care Services, said attorney Craig Cannizzo. He said lawmakers need to understand that Medi-Cal is not "a pot of money that they can steal from any time."

A similar lawsuit five years ago halted a 5 percent Medi-Cal cut proposed by Gov. Gray Davis.

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Posted by healthinsurance at 12:15 PM | Comments (0)

May 01, 2008

California Can Learn Health Care Lessons From Down Under

The health care reform is still on the table in California, which should consider carefully the achievements and failings of foreign systems. Canada is the usual candidate but Australia’s health care strategies deserve a closer look.

The negative effects of Australia’s government-run health system are predictable and apparent: limited distribution of technology, restrictions on the number of medical students and Medicare providers, and waiting lists. Recognizing this, the country recently reformed private health insurance – which is not mandatory – in order to attract more Australians to sign up.

Australian taxpayers finance almost 70 percent of total health care expenses, including a subsidy for private health insurance, under which almost half of the Australian population is now covered. Taxes fund a 30-percent rebate on private insurance premiums for Australians under the age of 65. Rebates go up to 40 percent for older patients.

Australia phased in a Private Health Insurance Incentives Scheme (PHIIS) to improve citizens’ access to care, which caused the number of privately insured Australians to rise from 31 to 46 percent. The plan incorporated several reforms. Most importantly, it allowed age-rating in private health insurance, which was previously forbidden.

With age-rating, insurers started charging lower premiums for younger people, attracting them to purchase policies. To manage the transition, those above 30 who signed up before a cut-off date in 2000 were also given a discounted premium. Those who did not sign up in time would pay higher premiums equal to the base discounted premium plus 2 percent for every year after age 30.

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Posted by healthinsurance at 02:29 PM | Comments (0)