Wednesday, March 02, 2016

Wednesday LinkFest, FoIB edition

As we've noted, the issue of agent compensation (commissions) for writing new Obamaplans has become quite the issue. More than a few carriers have decided to stop paying agents, and thus staunch the flow of claims dollars pouring out the door. Kentucky has put carriers on notice that in the Blue Grass State such practices are a no-no.

Thanks to FoIB David Williams, we learn that California is considering outlawing this practice, and for the very reason we've long put forth:

"California’s health exchange may require its health plans to pay sales commissions to insurance agents to keep insurers from shunning the sickest and costliest patients."

Of course, by next year it may be a moot point.

■ Next, SoIB Gail S tips us to the latest in the struggle to find lost life insurance policies:

"Smaller insurers balk at searching databases to check if policyholders have died; ‘It wasn’t priced in’"

Which is true, of course, but belies two other more pressing issues: the fact that it's the insured's responsibility to make sure his or her beneficiaries know about any policies and, two, even if they *could* afford to track down who's currently at room temp, there's no effective means to do so. As we reported almost 4 years ago:

"[T]he SSA has itself acknowledged, the DMF [Death Master File] is itself rife with potential errors and misinformation"

Oh, I'm sure they'll get right on that.

■ Finally, longtime FoIB Jeff M alerts us that North Carolina Blue Cross/Shield's woes aren't going away any time soon:

"Blue Cross and Blue Shield of North Carolina finished 2015 with just $500,000 in net profit, due largely to losses associated with Affordable Care Act plans."

But that's only part of the picture:

"Reserves" are the insurance company's "cushion" against future claims [Correction: as Mike points out in the comments, it would be more accurate to say that reserves are amounts held back from current premiums to pay for certain past claims, not future claims]. It's important that they be sufficient to handle not only anticipated claims (which follow  generally predictable trends) but unexpected ones as well (say a major listeria outbreak). Jeff points out this little nugget on that article:

"The insurer reported having 3.2 months of reserves, a measure of how long it could operate if it did not collect any more in revenue, down from 3.6 months at the beginning of 2015"

Seems a little light, no?
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