Auto Insurance Rates Zoom

Opening the Sunday paper, my eye caught the following headline.

Rates up for auto insurance

Trend follows Georgia’s passage of law that lets companies increase charges without state permission.

So now the carriers can increase rates at will with impunity.

At least that is the implication.

Many Georgia motorists have seen auto insurance rates rise this year, and the increases have accelerated since a new state law went into effect allowing companies to raise premiums without first getting state approval.

Until recently, auto insurance carriers had to first file rates with the DOI and wait for approval before the rates could go into effect. That changed in October when carriers were allowed to file rates without prior approval.

Since the Georgia law went into effect Oct. 1, many companies have filed to raise rates 5 percent to 10 percent. A few drivers considered more risky could see their bills jump as much as 81 percent.

So "risky" drivers are being asked to pay more.

I suppose this is unfair.

Not the way I see it. Why should I have to pay a higher rate just because someone else chooses to drive recklessly?

My good driving record should stand on its' own merit and those with bad driving records should be made to pay more.

Eddie Baker, director of building services at a Macon hospital, said he was surprised when his auto insurance came up for renewal earlier this year and his company raised the rate 27 percent. So he shopped around and switched companies.

Sounds like the free market it working.

If you don't like the rate, see if you can find a better one.

So what's the beef?

Hubert Welborn, a Warner Robins retiree on a fixed income, said his rates almost doubled this year when he turned 75.

Isn't most everyone on a fixed income?

Most folks work for a salary, or an hourly wage. They make the same each week (barring working more or fewer hours is you are compensated hourly).

Welborn couldn’t find a better deal elsewhere, so he increased his deductibles —- the amount he would pay out of pocket in case of an accident —- and stayed with the same company. That cut the cost of his coverage.

This is risk management.

“I have been involved in insurance regulation for 30 years,” Klein said. “I really have not seen any benefits to requiring prior [state] approval of rates. Competition in these markets is relatively fierce. That’s going to, by itself, regulate a company’s pricing.”

This is what you call a "duh" moment.

Dr. P.C.

Don't have a doc?

Don't have time to see a doc?

How about an online doc?

Now you can make an appointment, talk to or correspond with your doc via email all from the comfort of your home . . . or coffee shop.

For a monthly membership fee of $35, you can have a doc at your beck and call.

Prices are clearly marked on the site.

No surprises.

And, on top of being accessible and affordable, we focus on you, as a real live, busy person.

We can do all that because we love technology, the Internet, and especially our iPhones

An iPhone doc.

Imagine that.

Pay As You Go© Insurance?

Let me state at the outset that I am not a fan of American Community Mutual Insurance Company (ACM). Some years ago, we parted ways over an ethics issue: I had ethics, they did not. I have no idea whether or not that's changed, and I have no desire to find out.

However, this is an insurance blog [ed: nice of you to notice, Mr Swedish health care basher], and ACM is rolling out a new product which may have some value. Called "Community Flex," it starts out as an accident policy (major claims are only paid for injury, not illness), with some coverage for doc visits, preventive care, and a drug discount card. A rider is also available for maternity coverage (no word on whether that must be "accidental," too).

A two year rate guarantee is available for folks who choose higher deductibles ($5,000 and up).

Now, if you want more coverage, such is available through a "Gold Plan" buy-up. This gets you coverage for more doctor's visits, more preventive care, and better prescription drug coverage.

Perhaps I'm missing something here, but does anyone else notice a big, glaring hole?

A free, one-year's paid subscription to IB for the first person to call it.

UPDATE: Please click here for the latest on this product.

Sad News

Medical Mutual of Ohio (formerly Blue Cross of Ohio) doesn't get a lot of pixels here: they're not a large carrier, and haven't done much to either tick us off or make us shout "hurrah!" But they are part of our industry, and I just learned that their CEO, Kent Clapp, was killed in a plane crash this past Wednesday (the 3rd).

Kent was only 62 years old when he died. According to the carrier's website, he was a philanthropist who enjoyed giving back to the community: "In 2000, he was awarded the March of Dimes Franklin Delano Roosevelt Humanitarian Award, and in 2002 he was honored at the Northeast Ohio MS Society’s Dinner of Champions."

According to news reports, he was flying in a twin engine plane which crashed as he and his fiance were returning from a vacation. It was a last-minute charter flight (they had apparently missed their regular, commercial flight).

As FoIB Rick Byrnes notes, perhaps the saddest thing was this observation by company spokesman Jared Chaney:

"There is nothing that was that important...Looking back on it, he could have waited for another plane."

Our deepest sympathies go out to his family and co-workers.

Niche Marketing or Terror Enabling?

Recently, we reported on a unique niche marketing effort aimed at the gay demographic. And, of course, other such campaigns have targeted other buyer groups. It's how businesses grow.

World Net Daily reports that disgraced insurance giant AIG is developing (has developed?) a sharia-compliant homeowners insurance policy.

[ed: "sharia" is traditional Islamic law]

These particular plans are based on the Islamic concept of "Takaful," which apparently means "mutual assistance." We've seen similar "plans" in the health area, where folks join a group and are assessed when a member has a claim. Another aspect is that the carrier will only invest in companies or funds which are "sharia-friendly:" like "green" mutual funds (which invest only in companies buying into the global warming scenario), "sharia friendly" companies would be those that (for example) don't market pork products, or tobacco and the like.

On its face, this seems pretty innocuous: a market with a need (Muslims who own homes) and a solution (niche-friendly insurance). Assuming that the plans are adequately reserved and appropriately underwritten, where's the harm?

At least one organization, Family Security Matters is concerned that such a scheme opens the door to sharia-based law here, supplanting our own legal system. Since we taxpayers now own AIG, the argument seems to be, we have a right and obligation to see that this doesn't happen. They're concerned that we now own "part of [a] company with a business that promotes an Islamic supremacist ideology that is against equality, against liberty, and in support of discrimination."

I'm not sure I see that.

According to the carrier's site, the company sees its products as "an investment in the future of socially responsible insurance." Assuming that the profits flow back to the stakeholders (that would primarily be thee and me), I'm not sure I see a problem.

There are those who will object that the carrier will market only to Moslems, and that this is blatantly discriminatory.

D'uh!

Insurance is all about discrimination: we discriminate against speeders, and people with cancer, and teenagers...the list is pretty long. USAA sells only to folks associated with the military, Lutheran Brotherhood to their co-religionists, and so on. This seems to me to be no different.

If it turns out that this new carrier is, indeed, funneling its profits to terror groups, then of course the plug will need to be pulled, and fast. But there doesn't seem to be any evidence of that, merely speculation. Still, it seems prudent to keep a watch on this, to make sure that it is simply another niche marketing scheme, and nothing more sinister.

We'll keep you posted with any new developments.

Medicare (Dis)Advantage?

Both IB reader Jeff M and the folks at the bwell blog have tipped us that the first MMA (Medicare Modernization Act) casualty may be Medicare Advantage plans. While increasingly popular, they have also "added to Medicare's complexity and costs and...created potential inequities, without apparent improvements in quality.”

Ooops.

So if these plans are on their way out, what happens to all those seniors who've come to depend on them? There are a number of options, many (most?) of which are discussed at Medicare's website. Once you've gotten an idea of what's available, we recommend consulting with a local, professional, independent agent who specializes in health coverage, and who has experience with the whole gamut of Medicare options.

The Big Squeeze

What happens when demand exceeds supply?

Shortages.

Now compound the problem by an artificially stimulated demand coupled with a decrease in the number of suppliers.

A perfect storm.

Massachusetts has been a favorite punching bag here at IB mostly as an example of a good idea gone bad. So why stop now?

Now Kaiser reports a new problem in Taxachusetts.

Primary care providers are abandoning ship.

In most business environments having an influx of new clients with the ability to pay is a good thing.

Not so when it comes to health care.

The 440,000 or so folks with new insurance cards (many courtesy of the taxpayer) are showing up in droves looking for health care.

But therein lies the rub.

"It's entirely reasonable for somebody who's now got insurance and maybe has a whole list of things that's worried them and troubled them" to "expect that they should be able to go out in the market and get all of that care. There just aren't enough [primary care physicians] to give it to them." She said about 1,600 people currently are on the facility's waiting list and patients must wait an average of four months to be seen.

A 4 month wait.

Wonder how many politico's anticipated that?

Or . . . those who were screaming for "universal" health care?

And don't forget this.

The cost of providing this free & subsidized care has come at an additional cost.

Higher taxes.

Who knew?

Socialized Health Care: Busted!

Here at IB, we strive to keep our readers abreast of developments in nationalized health care systems. Recently, the boobs who run Sweden's Social Insurance Agency penalized a young lady for being out front with a particular condition:

"A Swedish woman injured in a car accident has had her disability benefits withdrawn after the country’s social insurance agency determined her large bust was to blame for the pain."

Although Jessica Andersson had never experienced back or neck pain prior to an auto accident some six years ago, the government agency decided that her over-abundance was primarily to blame for her continued discomfort, and has decided to discontinue her disability payments.

Her troubles began when, while driving to work, her car was hit from behind; there's no indication that her airbags were deployed. Adding insult to injury, the agency's consulting physician suggested that breast reduction surgery would enable her to return to work, although who would pay for such an elective procedure is unclear (she could be left holding the bag on that, as well).

Ms Andersson begs to differ with the good doctor:

"I’m 99.9 percent sure that it wouldn’t make a difference if I had surgery on by breasts. It’s not ideal to have neck injuries and at the same time have heavy breasts, I understand that. But the injury would still be there after an operation."

No doubt.

She's now considering filing an appeal, which may run into its own speedbumps:

"I had understood authorities to be impartial, but I don’t feel that way any longer. I see this as more of a political judgment than a medical one."

That sounds right. We don't wish to bust her balloon, but these systems don't have a particularly good track record vis-a-vis the patient. In the event, we wish her the best of luck, and certainly hope she keeps those bureaucrats in her headlights.

The Biggest Problem?

OK, this is touch and go.

No matter how I put this, I run the risk of sounding like the "white guy".

But when I read an excerpt of from an Ebony interview with Mr. Obama, it gave me pause.

This line in particular struck me as pandering.

"the biggest problem in the African American community is that they don’t have health insurance."

He can't be serious.

The BIGGEST problem?

Granted, he tempers his comment by saying the lack of health insurance crosses racial lines, but I found the comment to be over the top.

Bill Cosby got a lot of heat for giving his views on problems in the black community. He called on parents, and fathers in particular, to take personal responsibility for lifestyle issues that suppress opportunities for blacks.

I don't recall the lack of health insurance being mentioned anywhere in his comments.

if we put together a plan to deal with health care as a whole, then everybody benefits. African Americans may benefit even more because they’re more likely not to have health insurance

Guess I am missing the point. Why should government be expected to assume a role of personal responsibility?

I really have a problem with creating (or expanding) a nanny state. This has nothing to do with race. It has everything to do with acting like an adult and taking ownership of personal decisions and actions.

Insurance Insurance?

[Welcome Kaiser Network readers!]

VERY COOL UPDATE: Don't know how I missed this, but if you scroll down the story, you'll see our very own Bob Vineyard quoted extensively. WooHoo!

Not really sure what to make of this:

"UnitedHealth Group has a “first of its kind” product: the right to buy an individual health policy at some point in the future even if you become sick."

When one buys a disability insurance policy, one oft-included rider is a Guaranteed Purchase Option, which allows one to increase the policy down the road, regardless of health. And there are similar riders available on certain life insurance policies. But I've never seen such a benefit available on a "stand alone" basis like this one.

Like medical discount cards, this plan is not an insurance policy, so it's hard to say what it's value might be. For a fee, one buys the right to purchase some kind of health coverage if one becomes at once uninsured and uninsurable.

While I applaud the innovative thinking that went into this product, I can't help but question its usefulness. There are already all kinds of safeguards built into "the system:" HIPAA and COBRA come to mind, as well as state-mandated programs. It's not clear exactly what one's buying here, other than a vague promise to issue a non-underwritten policy should the need arise (and one qualifies under the terms of the deal).

It appears that, even though this is not insurance, it is still underwritten ("(t)hose who do pass a medical review"), and the price seems a little steep for such a vague promise ("20 percent each month of the current premium on an individual policy to reserve the right to be insured under the plan at some point in the future").

"(S)ome point in the future." Maybe.

The article examines the hypothetical case of a Columbus, OH gentleman who buys into the idea, paying "$32 a month for the right to eventually get that coverage — or 20 percent of a policy that now costs $159 a month." That's about $400 a year (which will most certainly increase) for what is, essentially, a "promise of a promise."

Color me unimpressed.

UPDATE (from Bob): I don't have all the details. UHC has called me a few times on this plan, so I am (and have been) aware of it. So far, it is not available in GA so I did not pay much attention to the nuances.

Here is a broad brush.

Continuity is a rider to an existing portfolio product. All the plans currently available (if approved in your state) come with the continuity rider option. You can pick a Copay plan, Saver plan, Plan 100/80 or HSA.

The product is underwritten like any other plan and works like existing shelf products until you become eligible for an employer group plan.

At that time, the policy goes "dormant" (my phraseology) until you lose employer coverage. At that time you reactivate the coverage at current premium.

The policy has application, but very limited in my opinion.

Also, I think the 20% dormant "premium" is a bit high.

It is a somewhat sophisticated product with (IMO) limited appeal. The product has been 3 yrs in development. It might have gotten more play had it come out a few years ago.

Under current economic conditions and with the threat of Obama-care, I think UHC misjudged the market.

[Hat Tip: Holly Robinson]

CF Update: Good News

"The student council at an Ottawa university has reversed its controversial decision to pull out of an annual fundraiser for the Canadian Cystic Fibrosis Foundation."

Looks like enough heat was brought to bear that the craven "student leaders" at Carleton University have decided to rescind their previous attempt to politicize innocents suffering from a devastating illness.

Good for them.

Cavalcade of Risk #66: Double Whammy Edition online

Perhaps best known for his On the Moneyed Midways features, "Ironman" presents two versions of this week's Cavalcade of Risk:

■ The "Investment Grade" edition, which features posts that are directly on topic, and

■ The "Kit and Caboodle" version, which includes all the submissions

Either way, you're sure to find something to suit your fancy.

If you'd like to host a Cav, just drop us a line (and no, you don't have to do two versions).

Food Pyramid Update: Space Cadet Version

It's been a while since we last updated our (in)famous food pyramid, one important component of which is that wonderful concoction of spring water, malt, barley and hops. Today's update comes to us from the International Space Station, not usually associated with such exotic liquids:

"Space beer, the result of a five-month mission to boldly grow, where almost no one has grown barley before, has landed in Japan...But the 100 liters of the 5.5 percent alcoholic brew are not for sale."

Boo!

To be fair, the astronauts grew wheat, lettuce and peas, as well, and plan to cultivate space-potatoes down the road. Unfortunately, Cosmonaut Boris Morukov conceded that "we would try to grow potatoes as food, not for vodka production."

Oh, well.

Wow, Just Wow: UHC Edition

FoIB Rick Byrne tips us to this blockbuster:

"Insurer UnitedHealth Group Inc. said Tuesday it expects enrollment in its commercial health plans for employers to drop by as many as 1.5 million members next year."

Never fear though, they have a plan:

"Partially offsetting the commercial weakness are expected gains next year for its Medicare plans for seniors and Medicaid plans for low-income Americans."

Of course, Medicare Advantage plans face their own obstacles, which makes this strategy a bit problematic.

One puzzler that has me stumped: to where, exactly, does UHC think these millions of (ex-)members are going? Competitors? Just go bare? The article doesn't say.

And there's this: with as many of our pixels as UHC's earned in the Stupid Carrier Tricks series, I don't feel too bad.

Get Your Fix

Seems these days everyone has a fix for what is wrong with health care. The most prominent proposal by politicians and health care pundits is to establish a giant pool for all.

Sounds great but does it work?

One of the largest risk pools is Medicare.

Medicare covers about 45 million "beneficiaries" of which around 7 million are under age 65.

A not so unexpected stat is the number of Medicare beneficiaries with chronic conditions. That figure turns out to be 99% of Medicare expenditures are for 1 or more chronic conditions and 68% of expenditures are for those with 5+ chronic conditions.

Generally, Medicare covers the "sickest of the sickest." So what can we learn from this ever growing group?

Medicare expenditures account for 20% of total health care spending in spite of the fact only about 14% of the population is covered. Medicare funding (through payroll taxes and premiums) consumes 11% of the total federal budget.

But here is where it all falls apart.

Over the years as the cost of health care rages out of control the federal government's response is to shift more of the cost of care to the beneficiaries.

Sound familiar?

Moreover, those who are spending the largest percentage of their income are those who can least afford it.

In 1970 Medicare beneficiaries in the lowest income percentile spent 10% of their income on out of pocket medical care while the top percentile spent 2% of their income.

By 2002 the lowest income group was spending 19% of their income for non-covered health care items while the top income group was spending . . . 2% of their income.

If "Medicare for All" is supposed to be a solution, particularly for those who cannot afford health care and health insurance then how is this disparity to be addressed?

Seems to me the fix for the uninsured is not a fix at all but another Washington boondoggle.

A Deadly Serious Grand Rounds

Based on a musical piece called "Death and Transfiguration," Mexico Medical Student presents this week's roundup of great medblog posts. It's an intriguing way of presenting a lot of interesting entries, and well worth reading through.

An Ounce of Prevention

First a confession. I am the poster child for the National Couch Potato Society.

Just ask my wife.

I don't eat right, I rarely exercise. Most of my day (and much of the night) is spent on the phone with clients while staring at a computer screen.

I don't smoke but I do enjoy a glass of wine on occasion. Sometimes I find two or three occasions to have some wine.

Genetics are on my side . . . at least that is my argument. Both sides of my family live well into their 80's. My maternal grandmother lived to be 96 and most of her brothers & sisters lived to 90+.

The folks at GE Healthcare are offering up some interesting stats.

Here are just a few.

Cardiovascular diseases are the leading cause of death in the world; however, at least 80% of premature deaths from cardiovascular heart disease and strokes could be prevented.

Alcohol, cholesterol and tobacco are the main risk factors driving disease incidence; all 3 of them are controllable by patients.

According to the World Health Organization, breast cancer is the second leading cause of cancer deaths in the world. Mammography could potentially save 47,000 lives over a 14-year period in a population of 58 million women aged 40-74 (US study).

Follow the link above for the rest of the list.

Carnival of Personal Finance is up...

John Wedding, proprietor of Mighty Bargain Hunter, hosts this week's collection of personal finance tips and info.

On Terrorism, Risk and Mumbai

[Welcome Hugh Hewitt readers!]

A few years ago, I realized that although there are "carnivals" (hosted collections of blog posts on a specific subject or issue) for sports, medicine, politics, even religion, there were none for posts related to "risk." Thus was born the Cavalcade of Risk, the next edition of which will be posted Wednesday.

And throughout the life of this blog, risk has been a fundamental theme, as well (e.g. IVF). We've examined risk through the prism of insurance, of course, and wondered whether or not it still held a place even there.

But risk is about more than mortality tables, player injuries and MRI side-effects: it's about life and death in the real world. And this past week has brought the issue into sharp focus (again) with the tragedy in Mumbai. One of the poli-blogs I regularly read is Hugh Hewitt's (in fact, it was Hugh's book, Blog, that got me started blogging). In addition to blogging, Hugh has a radio show, often inviting interesting guests to be interviewed. Last week, one of his guests was "Frank Dowse...the head of Agemus Group, a security-consulting firm. Frank's been in the business since his retirement as a Lt.Col from the Marine Corps a few years back."

Mr Dowse later emailed a follow-up to Hugh, with real, tangible advice for CEO's whose employees are, or could be, in such perilous straits. I'm posting a snippet, but I urge our readers to "read the whole thing."

And yes, it's that important:

#1: Initiate/Designate a Crisis Response Team: If this is not an inherent function or area of responsibility within your organization, then assign a Point Man (COO/Vice President Level, with PR reps to assist) who can lead, authorize, and decide on behalf of the management, in order to best affect plans and responses as events unfold, and information is gathered. This needs to be a 24 hour operation, and should be given top priority for resources, and manpower.

#4: Establish Contact with Families/Significant others: If information is forthcoming (from the Embassy, federal authorities), tell what you know, and ensure it is not premature, rumor, or simply press reports. Ensure the Crisis Response team is the “releasing” authority for all info coming from the team. Keeping the families in the proverbial “loop” is one of the most important and valuable things an employer can do in a situation like this. This is best accomplished if a “pre-trip” brief has been conducted, in which emergency info and contacts are acknowledged, and the (now) victims have agreed and know that the people who have the need to know their status will, in fact, be contacted.

This is the essence of risk-management: identify, quantify and qualify the potential danger(s) and how to deal with them. I suspect that, unfortunately, we'll be needing this kind of information a lot more now.

Cavalcade of Risk #66: Call for submissions

"Ironman" of Political Calculations hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 1rst), and he asks that you include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

You can submit your post via Blog Carnival or email.

Thanks!

We have hosting slots available for early '09 - just drop us a line to reserve yours.