Who gets coverage?. THE HEALTH INSURANCE INDUSTRY VIEWPOINT ONLY PARENTS WITH SICK CHILDREN WILL...
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Transcript of Who gets coverage?. THE HEALTH INSURANCE INDUSTRY VIEWPOINT ONLY PARENTS WITH SICK CHILDREN WILL...
THE HEALTH INSURANCE INDUSTRY VIEWPOINT
ONLY PARENTS WITH SICK CHILDREN WILL BUY COVERAGE. SO, IT’S TOO EXPENSIVE TO COVER OKLAHOMA NEWBORNS IN THE INDIVIDUAL MARKET.
Medical Loss Ratio
Total Claims Paid / Total Premiums Collected
What percentage of earned premiums are paid out in medical claims
Medical Loss Ratio
If an insurance company collects $100 in earned premiums and pays out $70 in total claims, its medical loss ratio is 70%.
$70/$100 = 70%
COMPANY MEDICAL LOSS %
BLUE CROSS 73.9%
COVENTRY HEALTH
67.5%
ASSURANT 65.5%
AMERICAN MEDICAL
58.4%
GOLDEN RULE 45%
FEDERAL LAW 80%
RISK BASED CAPITAL RATIO
NUMERATOR -- NET WORTH
(CAPITAL PLUS SURPLUS)
DENOMINATOR – ADJUSTED NET WORTH
ADJUSTED DOWNWARD BY VARIOUS RISKS – ASSET RISK, UNDERWRITING RISK, CREDIT RISK
RISK BASED CAPITAL RATIO
NET WORTH/ADJUSTED NET WORTH
MINIMUM LEVEL – 200%
NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS, MODEL ACT 315
COMPANY RBCRBLUE CROSS 1084%COVENTRY HEALTH
656%
ASSURANT 595%AMERICAN MEDICAL
883%
GOLDEN RULE 654%NAIC LEVEL 200%
THE HEALTH INSURANCE INDUSTRY VIEWPOINT
ONLY PARENTS WITH SICK CHILDREN WILL BUY COVERAGE. SO, IT’S TOO EXPENSIVE TO COVER OKLAHOMANNEWBORNS IN THE INDIVIDUAL MARKET.
HOW MANY BABIES?
OKLAHOMA BIRTH55,000
COVERED BY MEDICAID (64%)35,200
COVERED BY GROUP INS18,900 (extrapolation from Dept. of Health)
UNINSURED OR SELF-PAY 900 NEWBORN BIRTHS
WHAT DID THESE 900 BABIES COST?
FROM DEPARTMENT OF HEALTH, THE HOSPITAL CHARGES WERE $3.5 MILLION OR ABOUT $4,000 PER DELIVERY.
HOW MUCH DOES THIS INSURANCE INDUSTRY OWE OKLAHOMANS IN PREMIUM REBATES
$12 MILLION
EXISTING COVERAGE
LOW-BIRTH WEIGHT BABIES
FOR BABIES WEIGHING LESS THAN 2 POUNDS, 10 OUNCES, MEDICAID PROVIDES COVERAGE REGARDLESS OF FAMILY INCOME.
UNDER FEDERAL LAW, UNINSURED BABIES WILL BE ELIGIBLE FOR LOW COST PLANS BY THE AGE OF 6 MONTHS. (OKLAHOMA HAS RECEIVED $66 MILLION IN
FEDERAL MONEY FOR THE HIGH RISK POOL)
WHO IS EXCLUDED
PARENTS OF APPROXIMATELY 1,000 NEWBORNS (NOT LOW BIRTH WEIGHT) FOR THE FIRST SIX MONTHS OF LIFE.
APPROXIMATELY 5% WILL HAVE HIGH COST DELIVERY.
WHAT WOULD IT COST TO PROVIDE COVERAGE FOR THIS POPULATION.
INDIVIDUAL MARKET – ACTUARIAL REVIEW
EXPECTED CLAIMS FOR OKLAHOMANS FROM BIRTH TO AGE 19
MINUS
EXPECTED CLAIMS FOR OKLAHOMANS FROM AGE 1 TO AGE 19
EQUALS
COST TO COVER OKLAHOMANS FROM BIRTH TO AGE 1
INDIVIDUAL MARKETNEWBORNS
SUPPOSE, YOU HAVE THE FOLLOWING INFORMATION:
COST TO COVER INFANTS MLR WELL BELOW FEDERAL REQUIREMENT RBCR 4-5 TIMES ABOVE REGULATORY MINIMUMS WITHOUT A WAIVER FROM FEDERAL LAW, YOU OWE
ABOUT $12 MILLION IN REBATES TO OKLAHOMA POLICY HOLDERS.
WHAT DOES IT SAY ABOUT YOUR CORPORATE CULTURE TO EXCLUDE INFANTS?
INDIVIDUAL MARKET – NEWBORNS
IF INSURANCE FIRMS ARE REQUIRED TO COVER FROM BIRTH TO AGE 1, WHAT IMPACT WOULD THIS HAVE ON THEIR MEDICAL LOSS RATIOS?
WOULD THIS GET THEM TO THE 80% REQUIREMENT?
INDIVIDUAL MARKET – NEWBORNS
IF INSURANCE FIRMS ARE REQUIRED TO COVER FROM BIRTH TO AGE 1, WHAT IMPACT WOULD THIS HAVE ON THEIR RISK BASED CAPITAL RATIOS?
WOULD THEIR SOLVENCY BE JEOPARDIZED UNDER NAIC TEST?
INDIVIDUAL MARKET – NEWBORNS
DOESN’T THE DEPARTMENT OF INSURANCE HAVE LEVERAGE THEY DID NOT USE?
USE OF BULLY PULPIT
PUBLIC ADVOCACY
REFUSAL TO REQUEST WAIVER FROM MLR (THAT’S $12 MILLION CURRENTLY OWED TO OKLAHOMA POLICY
HOLDERS)
IS IT RIGHT TO MAKE A DEAL THAT LEAVES OUT BABIES?
INDIVIDUAL MARKET – NEWBORNS
WE DON’T KNOW WHAT HEALTH REFORM WILL LOOK LIKE OVER THE NEXT 3 YEARS, UNTIL FEDERAL LAW IS EITHER OVERTURNED OR IMPLEMENTED?
WHY NOT COVER INFANTS FOR THIS 3 YEAR PERIOD AND JUST MONITOR THE IMPACT ON MLR AND RBCR?
INDIVIDUAL MARKETNEWBORNS
SOME INSURERS WANT TO DO THE RIGHT THING
"Insurers said…[w]e'll stay in the marketplace and offer the coverage, but only if our competitors do,' …But when everybody else started pulling out, it had a domino effect.”
Robert Zirkelbach, America’s Health Insurance Plans
http://insurancenewsnet.com/article.aspx?id=226607&type=newswires
INDIVIDUAL MARKETNEWBORNS
SO – LET’S MAKE THEM DO THE RIGHT THING.
THERE’S A SIMPLE SOLUTION THAT PROTECTS OKLAHOMA NEWBORNS
MANDATE COVERAGE!