WA insurers and agents fined $2 million in 2012

From a news release we issued minutes ago:

Insurance Commissioner Mike Kreidler issued more than $2 million in fines against insurers, agents and brokers in 2012.

“Ideally, we’d have full compliance and no fines,” said Kreidler. “But the reality is that sometimes it takes a fine to get a company to address problems. And in many cases, these fines were accompanied by compliance plans aimed at making sure the problems don’t recur.”

The fines totaled $2,033,990. Violations included charging customers for coverage they’d never agreed to, charging unapproved rates, allowing unlicensed staffers to sell policies and failing to register with the state.

“Fortunately, these cases are the exception,” said Kreidler. “Most companies, agents and brokers follow the rules.”

The agency posts all disciplinary orders – including those that don’t include fines – at www.insurance.wa.gov/orders/enforcement.asp.

The total for 2012 was higher than the previous year’s $1.4 million.

Fines collected by the insurance commissioner’s office do not go to the agency. The money is deposited in the state’s general fund to pay for other state services.

Over the past 12 years, Kreidler has issued more than $15 million in fines for violations of Washington’s insurance laws.

Hearing set to consider request to buy Soundpath Health

We've scheduled a hearing on March 1 at 10 a.m. to consider Catholic Health Initiative's request to acquire Washington-based Soundpath Health Inc.

From our public notice about the hearing:

Catholic Health Initiatives (CHI) through its subsidiary, CollabHealth Plan Solutions, is proposing to acquire common shares of Soundpath Health from Soundpath’s current owners, Northwest Physicians Network and Physicians of Southwest Washington. The acquisition would allow CHI and CollabHealth Plan Solutions to own approximately 56 percent of common shares of Soundpath Health and become controlling entity of Soundpath Health.

Catholic Health Initiatives is a national nonprofit health system with headquarters in Englewood, Colo. The faith-based system operates in 19 states and includes 81 hospitals; 40 long-term care, assisted, and residential-living facilities; two community health-services organizations; two accredited nursing colleges; and home health agencies. In fiscal year 2012, CHI provided more than $715 million in charity care and community benefit, including services for the poor, free clinics, education and research. With total annual revenues of more than $10.7 billion and approximately 86,000 employees, CHI ranks as the nation’s second-largest faith-based health system.

If approved, CHI through CollabHealth Plan Solutions, Northwest Physicians Network and Physicians of Southwest Washington would be co-owners of Soundpath Health.

The public is notified that all interested parties may submit letters of support or concerns or objections and/or may participate in the hearing by appearing in person or by telephone at no charge.

To view the Notice of Hearing, which includes advice on how to participate in the hearing process, and to view all documents filed in this matter including the Purchase Agreement between the parties, and all other documents such as organizational charts and finances, current and past states’ regulatory actions and other litigation filed in this proceeding, go to Soundpath Health #13-0039 at

First steps of using googleVis on shiny

The guys at RStudio have done a fantastic job with shiny. It is really easy to build web apps with R using shiny. With the help of Joe Cheng from RStudio we figured out a way to make googleVis work on shiny as well. This allows you to make use of the Google Charts Tools in your shiny app directly from R. What I present here are three initial examples which seem to work in most browsers. The third example even uses a neat trick to create an animated geo chart.

However, before we upload the next version of googleVis to CRAN we decided to present a preview of version 0.4.0 here, asking for feedback. It would not be fair on the guys behind CRAN to release something into the wild, only to be told by users within a few days that we missed something. Hence, you can get the new version of googleVis only from the download page of our project site for the time being.

You may have read the post on RStudio's blog that the shiny API changed slightly: the reactivePlot and reactiveText functions have been renamed to renderPlot and renderText with simplified input parameters. Thanks to Joe, there is now also a renderGvis function as part of the googleVis package, which works in very much the same way as the other two.

To run the following examples you need shiny version 0.4.0 and googleVis version 0.4.0 or higher. Note that the charts below are not screen shots, but real apps hosted on RStudio's infrastructure.
Read more »

We Interrupt This Blog To Bring You An Important Message

One of the key points of this blog is that the health care debate has never been about health care. Never. Money isn’t the prime driver. Money is the only driver. How do the hospitals, doctors and other medical providers get paid, and how much, are the real issues.

Except for a couple of purists, no one really cares who pays the doctor or hospital as long as it isn’t you, the patient. Do you really care if your $300,000 bill from the Cleveland Clinic or University Hospital is paid by Anthem Blue Cross or the federal government? Honestly? No. All you really want to know is how much, if anything, you will owe once the dust settles. And the providers? The insurers pay more, but have a lot of paperwork. Medicare pays less, but quickly. Based on the number of medical providers that accept Medicare (darn near everyone), I’m guessing that there are no serious complaints. The hospitals may even like having two major funding sources to play against each other.

I have tried to teach my clients what I know of the game. My senior clients learn about the origins of Medicare Parts A and B, the backroom deals that gave us Part D (Rx), and why costs are out of control. Countless clients have been clued in that those obscene charges are negotiable before and after services have been rendered.

Your perception of our system changes today thanks to Time magazine. Blessed with budget, time, and amazing persistence, Steven Brill has given us Bitter Pill, Why Medical Bills Are Killing Us. Mr. Brill tracked claims and laid bare the abomination that is our system of billing for services – real or imagined. Straightforward in his prose, laborious in his detail, Mr. Brill presents a system of overpaid executives and hyper profitable not-for-profits.

The real issue isn’t whether we have a single payer or multiple payers. It’s whether whoever pays has a fair chance in a fair market. Congress has given Medicare that power when it comes to dealing with hospitals and doctors, and we have seen how that works to drive down the prices Medicare pays, just as we’ve seen what happens when Congress handcuffs Medicare when it comes to evaluating and buying drugs, medical devices and equipment. Stripping away what is now the sellers’ overwhelming leverage in dealing with Medicare in those areas and with private payers in all aspects of the market would inject fairness into the market. We don’t have to scrap our system and aren’t likely to. But we can reduce the $750 billion that we overspend on health care in the U.S. in part by acknowledging what other countries have: because the health care market deals in a life-or-death product, it cannot be left to its own devices. Steven Brill – Bitter Pill, Why Medical Bills Are Killing Us

You won’t agree with all of Brill’s conclusions. I certainly don’t. But read his work. This should be the new starting point of our national conversation.   DAVE   www.bcandb.com   ***  

Insurance tips: "My insurer wants more money due to an 'audit.' What's that?"

Q: I paid my business policy premium, and now, after the policy period is over, the insurer wants more premium because of an "audit." What's going on?

This is a common question.

This issue deals with the audit provision found in the typical commercial policy. Because businesses may experience both decreases or increases due to business cycles, estimated premiums are commonly used in commercial policies when they are first issued, with an annual audit option to identify any premium that needs to be added or subtracted due to the business cycle. Insurers may or may not decide to exercise their right to audit.

The good news is that the audit, while it may increase your premium for the prior business period, could also decrease it.

Water Falls From Sky. People Get Wet.

Cause and effect. Stand in the rain and you will get wet. We get that. We aren’t surprised, normally, when 1 plus 1 gets us 2. But human nature will, at times, have us rooting for a different result. There are times when we desperately want to be able to walk between the rain drops or somehow add 1 plus 1 and get 5. Or even 6! And we are surprised, shocked, when we get wet.
The Cleveland Plain Dealer carried a wire story yesterday by Noam N. Levey. The P.D. headline was Health care premiums to rise? In the Los Angeles Times it was States worry about rate shock during shift to new health law. You’ll want to read the Times’ version. It is fifteen paragraphs longer.

Some of the biggest proponents of the Patient Protection and Affordable Care Act (PPACA) have suddenly realized that health insurance premiums are about to increase. A lot. How much? No one really knows for certain. The plan’s advocates are openly nervous even though they appear to be soft-peddling the full extent of the problem.

Affordable care is in the eye, or wallet, of the beholder.

Oregon’s insurance commissioner, another supporter of the law, said new regulations could push up premiums for young customers by as much as 30% next year. He urged administration officials to slow enactment of the new rules.
          Noam N. Levey

State insurance commissioners across the country have focused on the increased benefits built into all of the policies, the elimination of underwriting, and the new age/rate ration as particularly troublesome. Young, healthy males in their early 20’s now pay about 1/5 the price of healthy males in their early 60’s. The new law reduces the ratio to 1:3. Will the rates decrease for the 60+ year olds? Maybe a little. So to hit the ratio, the rates for the young must increase.

The ratio change impacts the young disproportionately. Ending underwriting and adding maternity, and lots of other new benefits described in previous posts, will also escalate premiums. Still, fans of the PPACA maintain that young people will gain enough in benefits to offset the cost.

How does a 25 year old afford a $250 to $300 monthly premium? Subsidy! Americans who don’t receive their health insurance from their employers may qualify for a federal subsidy. The subsidy is available to people earning up to four times the federal poverty level which is about $92,000 for a family of four. Curious about how much subsidy you might get? Check out the online calculator created by the Kaiser Family Foundation. It is really easy to use.

So the government passed a law, makes a lot of rules and regulations, pushes up insurance premiums, and then lots of us get a subsidy. It would appear that everything is in balance. For once, a happy ending!

Not so fast. The money for the subsidy has to come from someplace.

$101,700,000,000 over ten years is a good down payment for the PPACA. $101.7 billion doesn’t cover the actual cost of the President’s plan, but the Health Insurance Tax (HIT) is a key element. The HIT is a tax charged to insurance companies on fully insured health policies. These are the policies covering individuals, the self-employed, and small businesses. Medicare Advantage and Medicare Part D (Rx) contracts are also affected. This tax will be passed directly to the consumer.

The 2011 Oliver Wyman projection was ugly. The ten year total cost projections:
  • $2,150 – Single coverage
  • $5,080 – Family coverage
  • $2,760 – Small group single employee
  • $6,830 – Small group family
  • $3,590 – Medicare Advantage beneficiary
  • $161 – Medicare Part D (Rx) participant
Adding $15 to $20 per month for a single or $40 to $45 per month for a family won’t help to make insurance more affordable. But at least we know where the government is getting all that money for those subsidies. For now.

Representative Charles Boustany (R-LA) and Representative Jim Matheson (D-UT) have introduced bi-partisan legislation to repeal the Health Insurance Tax.

The President’s health care law is full of hidden tax increases. Beginning in 2014, millions of American small businesses will be subjected to a new health insurance tax (HIT) coming at a cost over $100 billion. This tax will close many small businesses and kill jobs once implemented. The HIT will cost each affected family an average of $5,000 in higher premiums over the next decade. The Jobs and Premium Protection Act prevents premium increases for small businesses and protects jobs by repealing this unfair tax. It keeps more money in the hands of small business owners and employees instead of levying higher taxes on job creators and American workers. I encourage my colleagues to join in honoring our commitment to protect small businesses and the millions of workers and families depending on them.

Congressman Charles W. Boustany, Jr., M.D., (R-South Louisiana) after introducing “The Jobs and Premium Protection Act”

Will the tax close small businesses? Probably not. Will Boustany/Matheson pass the House? Probably. Would a similar bill pass the Senate? NO! If the cost of insurance is your biggest concern, this tax and the legislation to repeal it are relevant. If the government spending money it doesn’t have is your major concern, then you will want to see the tax enacted.
New benefits, the elimination of underwriting, the age/rate ratio, and the new Health Insurance Tax all add significantly to the cost of health insurance as of January 1, 2014.

Surprised? Really? Let me get you an umbrella.



Job openings: Market analyst and financial analyst

We have three job openings, both in our main office in Tumwater, Wash.

One is for a financial analyst. Duties include examining and analyzing insurance company financial filings and data to discern their financial condition, difficulties, trends and compliance with laws and rules.

Required qualifications include a bachelor's degree with major study in finance, business administration, economics or accounting; a CPA license or Accredited Financial Examiner credential, and three years of professional experience in accounting or auditing.

For a full list of duties, qualifications, and application information, please see the full job listing.

The other job openings -- two of them -- are for market analysts. These people -- this won't be surprising -- conduct market analysis and participate in data surveys, using data from various sources, including other states' insurance departments. They also review company information on Facebook, Twitter, carrier websites, agent sites and blogs.

The market analyst jobs require a bachelor's degree in business administration or a related field, although work experience may also be submitted. They also require two years of experience in life, helath or property and casualty insurance company operations. For details, application info, etc., please see that full job listing.

Thanks for your interest!

Insurance tips: "My PIP claim is months late. What's going on?"

Q: My auto insurance was supposed to pay for medical expenses under my Personal Injury Protection (PIP) coverage, but my insurer didn't pay all the bills. They waited for two months before making a decision. What's going on?"

Our consumer advocacy hotline gets questions like this fairly frequently. Insurers should be reviewing the bills as they are received. As a general rule, we would expect that an insurer would review the bills and make a coverage decision within 30 days of getting them. If there are delays, we'd expect the insurer to be able to explain why.

If you're having problems getting your insurance -- health, auto, homeowners, etc. -- to pay a claim, feel free to contact us. We accept complaints online 24/7, and have a toll-free consumer hotline (1-800-562-6900) staffed by experts.

Registration for 'R in Insurance' conference has opened

The registration for the first conference on R in Insurance on Monday 15 July 2013 at Cass Business School in London has opened.

The intended audience of the conference includes both academics and practitioners who are active or interested in the applications of R in insurance.

The 2013 R in Insurance conference builds upon the success of the R in Finance and R/Rmetrics events. We expect invited keynote lectures by:
  • Professor Alexander McNeil, Department of Actuarial Science & Statistics
    Heriot-Watt University: Implementing CreditRisk+ in R with the Faster Fourier Transform
  • Trevor Maynard, Head of Exposure Management and Reinsurance, Lloyd's: There is an R in Lloyd's
We invite you to submit a one-page abstract for consideration. Both academic and practitioner proposals related to R are encouraged.

The submission deadline for abstracts is 28 March 2013. Please email your abstract (in txt or pdf format) to rinsuranceconference at gmail dot com.

The conference committee consists of:

Details about the registration and abstract submission are given on the new dedicated R in Insurance page at Cass Business School.

The organisers, Andreas Tsanakas and Markus Gesmann, gratefully acknowledge the sponsorship of Mango Solutions.

Insurance Q&A: "How much is a pet worth?"

We periodically field questions from bereaved pet owners who've had a pet killed by a car, only to be offered what seems like a very low sum -- typically $50 to $100 -- from the driver's insurance company.

The reality is that pet owners usually can't recover much more than their out of pocket expenses when an animal is killed due to someone's negligence. And sometimes they won't even cover medical expenses for the injured animal.

Here's why: under current law, pets are valued as property and valued at what they'd cost to replace. (That's the same way insurers decide the worth of, for example, a totaled car.) You may be able to negotiate a slightly higher payment -- our consumer advocacy staff once helped get more money for a slain goat -- but the sentimental value of a longtime pet is often much, much higher.
In recent years, there have been a growing number of cases in which plaintiffs are arguing that a beloved pet is more than just property, and that insurance payouts should recognize that.

The Wall Street Journal last week reported on a Texas case in which a shelter mistakenly put a dog to death. The owners sued, claiming emotional damage from the loss of their 7-year-old dog, whom they felt was part of their family. An appellate court ruled in the couple's favor in 2011, saying that the special value of "man's best friend" should be recognized.

The case is now in the hands of the Texas Supreme Court.

The good news: your insurance likely covers meteorites & space junk

In light of the passing asteroid and the (unrelated, apparently) meteorite that hit Russia last night, we'd point out that in the extremely unlikely event of a meteorite or old satellite crashing into your home, your insurance would likely cover the damage to you, your car, business or -- hopefully not -- yourself.

The Insurance Information Institute took a look at this issue a couple of years ago, concluding that:

"Damages caused by falling objects are generally covered under standard auto, business, homeowners and life insurance policies."

Our in-house consumer hotline folks add that if a meteor struck near a home, with no direct hit, but that the impact and shock wave caused damage, that damage too would likely be covered in a standard policy.

Again, the odds of getting hit by something like this are very, very low, although not zero. An Alabama woman was struck by a meteorite in 1954, and in 1992, a car in New York state was hit.

New Data Scientist role at Lloyd's

Lloyd's of London is looking for a Data Scientist as part of the Analysis team. See Lloyd's career web site for more details.

Insurance tips: "My insurer won't pay my policy limits!"

Q: "I turned in a valid claim and my insurer won't pay me the limits that I have on my policy. What's going on?"

A: We get this type of question a lot. The limits shown on your policy are simply that -- an upper limit that is the maximum available to you for a covered claim.

But being paid the maximum is rarely automatic. Even though it is your policy, and you've paid your premiums faithfully, you still have the responsibility to document the value of your claim. It's not at all unusual for the value of a claim to be below a policy's limits.

Industry professionals: We want your opinion on our new website

Note to agents, brokers, and insurers licensed in Washington state: We're evaluating our newly redesigned website, with the goal of making it as easy as possible for industry professionals to find what they need.

Please take a few minutes to take our online survey. It takes about five minutes to complete.

Your feedback will help us improve the website.

Thanks much.

Review: Kölner R Meeting 6 February 2013

The fourth Cologne R user meeting took place last Wednesday at the Institute of Sociology. Thanks to Bernd Weiß for hosting the event and Revolution Analytics for their sponsorship.

We had two fantastic talks by Klaus Jacobi and M.eik Michalke. Klaus talked about Eliminating cloud pixels in satellite images via chronological interpolation and Meik presented his new roxyPackage package, which makes it even easier to maintain R packages with roxygen2.

Eliminating cloud pixels in satellite images via chronological interpolation

Klaus gave a great case study about his consulting work as a water engineer in Asia, where he used R to analyse the snow melting process in the mountains of Pakistan.

Images of snow melting over time. Klaus Jacobi

About half of the fresh water in some regions of Pakistan is sourced from snow meting during the spring season. The water is captured in dams and as the snow only melts slowly the water supply is much more predictable than the water from the monsoon season, which is the other key source of fresh water during the year.
Read more »

Buying a used car? Here's a way to check if it's stolen or salvaged.

The National Insurance Crime Bureau, an anti-fraud group made up of hundreds of insurance companies, car rental companies, auto auctions, etc., runs a free online site where you can check to see if the car you're about to buy has been reported as stolen or salvaged.

It's called "VINCheck." You type in the vehicle identification number. On most modern cars, the VIN is usually a long combination of numbers and letters on a plate or tag at the front of the dashboard. It's easily read from outside, through the windshield.

VINCheck will tell you if the vehicle has been reported as stolen and unrecovered, or if it has been reported as a salvage vehicle, by participating NICB members.

A maximum of five searches are allowed from each IP address per 24-hour period.

"My homeowners insurer canceled me because I made two water claims in three years. Is that legal?"

Yes, it often is. Insurers are required to send you a written, advance notice listing the reason why they're canceling your coverage, but they're not prohibited from canceling (or not renewing) coverage due to claims.

What can you do? Well, you can talk to your agent, who may be able to work with the insurer to keep your coverage, albeit possibly with some changes.

The insurer might want you to take on a higher deductible, for example, or might want a home inspection report by an outside consultant.

If it's the latter, they'll likely be paying particular attention to the overall condition and care of the home and condition of the utilities.

If you like your insurer, it's worth at least asking the question.

Also, if you have questons like this and you live in Washington state, we're happy to contact your insurance company on your behalf and ask for an explanation of their decision. You can file a complaint online 24/7 or give our consumer advocacy staff a call at 1-800-562-6900.

The Great Imposition



Women are imprisoned in their homes, and are denied access to basic health care and education. Food sent to help starving people is stolen by their leaders. The religious monuments of other faiths are destroyed. Children are forbidden to fly kites, or sing songs... A girl of seven is beaten for wearing white shoes.
-- President George W. Bush, Remarks to the Warsaw Conference on Combating Terrorism, November 6, 2001

Regular readers of this blog are all too aware that the health care debate has very little to do with the delivery of health care, the prevention of illness, or even curing the sick. The majority of the legislation and the debate is about money – How do we pay the doctors, hospitals and other medical providers? And how much? So this is really a political and financial discussion. But not today. Today, religion invades Health Insurance Issues With Dave. And religion never takes any prisoners.

Warning – If you are easily offended, stop now. Come back and visit next week.

Next month marks the third anniversary of the Patient Protection and Affordable Care Act (PPACA). The hundreds of pages linked above are the framework, the goals, that serve as the outline that will be fleshed out in thousands of rules and regulations in the years to come. Heavily promoted, from day 1, was that Preventive Care was going to be covered with no copays or fees under all health insurance plans.

Why cover Preventive Care? I don’t call State Farm when I need to get the oil changed on my car. But suddenly we are all going to get our annual physicals for FREE. We love free stuff. Now, if I get my annual exam and you don’t, then this works for me. You are helping to pay for my exam. If, however, we all get annual exams, then we are all paying for our own exams and it’s not really free. But let’s not mix facts into this feel good moment. Three years ago we learned that we were going to get something out of this – FREE Preventive Care.

What we didn’t know, in March of 2010, was that Preventive Care included Birth Control Pills, IUD’s, and the Morning After Pill. Who knew that the something for nothing section of the PPACA would become the most controversial portion of the legislation?

Allow me to summarize this issue by citing one of its most intemperate spokesmen, Kevin O’Brien of the Cleveland Plain Dealer.
This isn’t just about big, church-affiliated institutions like schools and hospitals, although they’re an important part of the argument. It’s not even about contraception. That’s just the issue that sparked the argument.

It’s about an individual right to live according to one’s faith.

What Barack Obama thinks about contraception is of no consequence whatsoever.

What each business owner who would be absorbed into a federal scheme to make contraception more widely and more cheaply available – factors that will encourage its increased use – thinks is the only thing that matters.

Those who believe that the government’s plan offends G-d should not have to participate in it. The free-exercise clause in the First Amendment – is in effect everyday, not just Sundays – says so.
And there you have it. My religion, or how I happen to interpret my religion, or the Truth as revealed to me be my spiritual leader will now determine which taxes I pay and what I give or withhold from my employees.

Start with Mr. O’Brien’s fixation on Sundays. For millions and millions of Americans, Sunday is no different than Tuesday. The USA is home to Jews (Saturday), and Muslims (Friday), and, Atheists (no Sabbath at all). And of course, he assumes that all Christian denominations choose to follow, this time, the teachings of the Catholic Church. Do 100% of all Catholics abstain from Birth Control, IUD’s, and the Morning After Pill? 50%? According to Gallup, the number of Catholics who accept the use of Birth Control is 82%.

We would laugh at the idea of Orthodox Rabbis trying to outlaw shellfish.

Can we tailor each law to bend to the religious prerogatives of each citizen without devolving into total chaos? Ten years ago we chose to invade a defenseless country that supposedly had weapons of mass destruction. IT DIDN’T. Many a religious leader fought this second war and claimed that it was immoral. Did millions of Americans get to opt out and stop paying their taxes? Of course not.

The paragraph that opens this post deals with our reaction to the Taliban.

Even by Muslim standards, the Taliban is considered extreme in the way they interpret the Koran and how they apply the rules to day to day living. But our friends the Saudis still don’t let women drive.

Would a Saudi, living in the USA, be forced to hire a woman for a driving position? Pay property tax for a school district that had a coed driver’s education program? Pay women the same as men?

Where is the line? Catholicism can make rules, but not Methodists? Shall we poll the Hindus amongst us about our beef price supports? Once you open this door, it will be very hard to close it.

The Patient Protection and Affordable Care Act has more than a few problems. We need to determine how we are going to pay for all of the changes that were once thought to be covered. We need to decide whether Birth Control Pills, IUD’s, and the Morning After Pill should be considered Preventive Care and covered without cost to the user. Each person’s personal morality may inform his/her opinion and play a part in the discussion, but religion won’t rule the day.

Not in 2013. Not in the United States of America.  




Next Kölner R User Meeting: 6 February 2013

Quick reminder: The next Cologne R user group meeting is scheduled for tomorrow, 6 February 2013. All details and the agenda are available on the KölnRUG Meetup site. Please sign up if you would like to come along. Notes from the last Cologne R user group meeting are available here.

Thanks also to Revolution Analytics, who are sponsoring the Cologne R user group as part of their vector programme.