Kreidler: The insurance industry faces an unprecedented risk from climate change

Commissioner Kreidler has been involved in climate change and insurance issues for years now. Currently, he chairs the National Association of Insurance Commissioner's Climate Change and Global Warming Working Group. Read his take in Climate Action on the unique opportunity the insurance industry has to prepare for the changes to our climate. 

The Tar Pits Are Calling

Giant Eagle. Ask a small child where hot dogs come from and he will answer the name of the last place he rode around in a shopping cart. This is the beginning of a conversation about farms, animals, and possibly soy beans.

The H.R. Department. Ask a government bureaucrat or one of our elected officials where a health insurance policy comes from and they might tell you that all of that paperwork originated with Marge in H.R. And this is the beginning of a conversation about how many of us get our health insurance, from agents servicing individuals, small businesses, and the self-employed.

This blog, Health Insurance Issues With Dave, has been published for over 4 years. The original posts were more personal and had less graphs and links. But this now appears in three formats and has readers around the country, so there is usually less of me and more of a straightforward presentation. At the risk of shocking or irritating a few of my readers, today’s post will be more personal, more like the originals.

Let me be clear – I am very concerned. I’m concerned about the country and how we manage the self-inflicted mess we are about to encounter and I am concerned about me.

Now before our friends on the right get excited and our friends on the left, agitated, we need to state that there is plenty of blame to go around. Neither side has listened to the other. For good or ill, the Patient Protection and Affordable Care Act (PPACA) is the law of the land. One side has done everything it can to undermine the legislation without any concern for the impact their actions might have on their constituents. The other side lacks the fire power to execute this massive transition and is too stubborn to pull back to get this right.

Stubborn – Incompetent – Unconcerned About the Collateral Damage

Too be honest, it is easier to pick on the Democrats, the Department of Health and Human Services, and the President because they are doing something. It may be Grade C work, but if you are comparing them to Mitch McConnell and John Boehner, then C beats incomplete any day of the week. In fact, when it comes to the health care debate, the Republican leadership is simply AWOL.

Last week’s post dealt with the federal government’s invitation only webinar. The facilitator was asked for some specifics about the “Metal Plans”. She quickly pooh poohed the question. From the start, the PPACA has presumed that there would only be a couple of plan options. Since it is pretty obvious that none of the people who wrote the law have ever actually shopped for insurance, they had no idea what they were creating. They envisioned a system so simple that even an untrained navigator could help the computer illiterate enroll in coverage.

I have been given an advance peek at one company’s plans for the new exchange. To comply with the law, these policies are far more complicated and limiting than the current plans. Provider networks are shrinking. Simple deductible / 100% plans are disappearing. Determining the right policy for an individual or family may take more time, not less, in the future.

To counter this reality, Secretary of Health and Human Services Kathleen Sebelius excitedly announced this week the creation of a new website and telephone call center. The number is 1.800.318.2596. The website is Sure the Government Accountability Office (GAO) has found that the federal government and many of the states are “behind schedule”. Sure we have less than 100 days till the exchanges are supposed to be up and running. But we have a website and a call center all prepared to tell us how wonderful everything is going to be.

I went to the website. It is information light and propaganda heavy. At one point I found this nugget on the small business page: Insurers can no longer charge more for women. Of course we know that in the small business market, women are charged more than men at some ages and less than men at other ages. In other words, the rates reflect the risk. If the government was interested in presenting facts instead of simply selling, the page would note that rates will now be gender neutral. I would tell you more about the site, but they still have work to do on it. My computer froze while on the site and I had to reboot to get back to work.

I’m worried about us because these people are in over their heads. They’ve got the pitch memorized but they don’t understand the product. And they don’t know enough to care.

And I’m worried about me. I have been doing this since 1979. The things I know and the work I am capable of doing, is no longer valued and may not be compensated. I have about 500 clients. Most of them have employees. They are all impacted by these changes. Some will save money. Some of my clients are about to take a hit. Each needs a personal strategy. Each needs time, my time. And the truth is that none of my peers knows, today, how much time we will be able to spend with our clients.

Tuesday I talked with an agent who is abandoning the individual market. Too much time. Too much effort. Too little money after the last round of commission cuts. He wants to spend all of his time working with businesses with 50 or more employees. He is a fifteen year veteran of this business. His clients will notice his absence. He can’t be replaced by a volunteer from the local union hall. And neither can I.

On October 1, 2013 we will not enter the gates of insurance heaven nor fall into a dark abyss. No, it will be something in between, mediocre, messy, but just close enough to warrant, at least initially, a C.

And I will fight on for me and for my clients. But I would have to be deaf or in denial if I said that I didn’t hear the tar pits calling.   DAVE

I forgot to pay my auto insurance - is there a grace period?

Sorry to deliver the bad news, but if you forget to pay your auto insurance, you really could be canceled. There is no grace period. Call your company or agent right away to make sure you're covered.

Here's a couple more common questions we get:

I was in an accident and the other insurance company won't pay my ongoing medical bills. What can I do?

Unfortunately, when you're dealing with someone else's insurance company, they usually will not pay your ongoing medical costs. Only when you're done with your treatments will they consider settling your claim. If you have personal injury protection (PIP), you should contact your own insurance company to let them know about the accident and your injuries.

I was in an accident and the other person's insurance company says I have to get my car repaired. Is that true?

The insurance company is obligated to pay you for the loss. You have the right to decide to cash out your claim rather than have your vehicle repaired. But keep in mind that if you cash out your claim, the company may not consider any additional damage that you discover later. Also, the company will only pay the very least it can to repair your vehicle. So, if you have three estimates they'll only pay for the lowest cost one. Most companies will base your settlement on their own inspection and estimate.

Questions about health reform? Check out

For those of you who've followed the Affordable Care Act since it's passage, you've probably spent considerable time at the federal government site: Well, it just got a whole new look. They've streamlined the information and given it more of a consumer focus. We like it - a lot. Check it out for yourself. There's even specific information for people who already have health insurance. And even a live chat option 24/7 if you want your question answered right away.

Talking data: Building interactive relationships with data and colleagues

Last week I had the honour to give the opening keynote talk at the Talking Data South West
conference, organised by the Exeter Initiative for Statistics and its Applications. The event was chaired by Steve Brooks and brought together over 100 people to discuss all aspects of data: from collection and analysis through to visualisation and communication.

Building interactive relationships with data and colleagues

The programme was very good with a variety of talks such as How data collection from smart phones can improve agronomic decision making in potato crops by Robert Allen or Spatial data and analysis in the improvement of aquatic ecosystem health and drinking water quality by Nick Palling. I also liked Richard Everson's presentation on Visualising and understanding multi-criterion league tables, which showed new ideas to create rankings.

However, my highlight was Alan Smith's talk on Information for the Masses: Using Visualisation to Engage the Public. Alan heads up the Data Visualisation Unit at the Office for National Statistics and they created some fantastic online visualisation tools. He presented some interactive examples of the Census 2011 data set. Alan mentioned the hilarious story of a young lady, who had moved from Leeds to Elmbridge and used the Census data to find out why her new home was so dull compared to her old.

Screen shot of the 2011 Census comparator

The screen shot shows the age distribution of Leeds (left) and Elmbridge (right). Focus on the 20-24 year old age group and you'll get the joke.

Watch Where You Step

I admit that I was a bit confused. The key employee of a local not-for-profit was about to give us the “30 Thousand Foot View” on a particular issue. My confusion? I had always thought that it was easier to find bullshit in a cow pasture. Our guy proved me wrong.

I was reminded of our captain of the shovel brigade Wednesday afternoon when I had the opportunity to take part in a special government sponsored online seminar on the Patient Protection and Affordable Care Act (PPACA). The facilitator promised a High Level Overview of the new law. What we got was a cheerleader who attempted to substitute PowerPoint for back flips and the ubiquitous can-can line. If one-sided hyperbole is your favorite way to spend an hour, you would have been in heaven.

Though this briefing was by invitation, only, there were no requests to keep the contents secret. Reporters were supposedly on the line. We were even provided a link to the presentation. I would include it, but It Doesn’t Work!

I knew we were in for an informative webinar when the first slides told us why we had to have the PPACA. “Insurance companies could take advantage of you and turn away 129 million Americans with preexisting conditions”. We learned that the law was built on everything that worked in our system and fixed everything that didn’t. I turned away for a moment, but I’m sure that one of the bullet points was that the President and the PPACA guaranteed that the sun would forever rise in the east and set in the west.

The twenty-eight page presentation covered little substantive ground. The slides extolled the virtues of the yet to be created exchanges and the new heroes of healthcare, the Navigators. Our facilitator mentioned a new class of participants, Certified Application Counselors, but her screen presentation failed to note or define them.

For someone who has spent almost 34 years in the business, it was an hour of total frustration. How do you unlearn what you know to be true? Can you pretend that up is down or that black is white?

I didn’t have time to dwell on the seminar. Dinner Wednesday night was to be downtown with friends. Flipping through the stations as I was driving on I 90 into town, I happened on to Neil Cavuto on FOX. He was interviewing Dr. Ben Carson, a noted pediatric surgeon from Johns Hopkins and a FOX favorite.

Dr. Carson is a really, really smart guy. And if I was looking for a surgeon to separate conjoined twins, he would be at the top of my list. But his political rants aren’t in that same class. I’ve included the link. While his voice went high and shaky, his argument sunk to the level of your average FOX talking head. The segment ended with Cavuto and Carson delivering what they hoped to be the fatal dagger to the heart of the PPACA – IRS involvement.


There is no reason to expect more than this from FOX, but we need more from someone. We are months from the real start of the PPACA, the opening of the exchanges, and the wholesale upheaval of our current payment system. Businesses have already spent millions of dollars in an effort to be in compliance with regulations that are still being drafted and changed. Neither one-sided cheerleading sessions nor silly rants will help us efficiently pay for the medical services of over 300 million Americans.

There is still time to modify the Patient Protection and Affordable Care Act to make it more effective. All we need is a Congress more interested in fixing problems than scoring political points. We don’t need more grandstanding. We need action. But I’m not holding my breath. I am, however, watching where I step.   DAVE

Spokane man's own smartphone is a witness against him in insurance-fraud case

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Allianz Life Insurance fined $150,000

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Spokane man sentenced for insurance fraud and attempted theft

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Wildfires and homeowners insurance: Five things you need to know

As wildfire season approaches, here are five important things to know about fire danger and your homeowners insurance:

1) Homeowners insurance generally covers all fires, including wildfires, unless the policyholder intentionally set the fire. Outbuildings and unattached structures are also generally covered.

2) If possible, review your policy to make sure you have enough coverage. Things like fine art and jewelry may have limited coverage under a standard policy. But you can buy special coverage that gives you more protection. Here's information to help determine how much

3) Prepare a household inventory, which will help a lot if you have to file a claim. You can do it with these easy-to-use paper forms, or you can try free iPhone/iPad or Android apps that do the same thing.

4) You can help protect a rural home and limit the danger by clearing a natural firebreak between your home and surrounding trees, brush and uncut fields. The Federal Emergency Management Agency has much more information on how to protect yourself and your home, before, during and even after a wildfire.

5) Have an emergency kit and a family communication plan. Know where your valuable papers (including insurance policy and contact info), mementos and anything you can't live without are, so that you can evacuate with them if needed. Here's a list of recommended emergency supplies. And if you're advised to evacuate, do so immediately. Don't be the person in the photo above.

Heads up: New travel insurance license rules in WA

New rules are taking effect July 1 for travel insurance licensing in Washington state. Here's a summary, albeit one that's pretty heavy on insurance-ese:

  • Under the new rules, any individual or business entity that will sell, solicit, or negotiate travel insurance must have the travel line of authority specifically listed on their Washington state insurance producer license.
  • There is one exception to this new requirement. If a licensed business entity (agency) wants to transact travel insurance business, it must a) have a producer license with the travel line of authority and b) have a designated responsible licensed person for the agency who has a producer license with the travel line of authority.
Got questions? We've prepared an FAQ page on this topic, and if that doesn't help, you'll find contact info (email and phone) at the bottom of the FAQ page.

R package development

Building R packages is not particular hard, but it can be a bit of a daunting endeavour at the beginning, particularly if you are more of a statistician than a computer scientist or programmer.

Some concepts may appear foreign or like red tape, yet many of them evolved over time for a reason. They help to stay organise, collaborate more effectively with others and write better code.

So, here are my slides of the R package development workshop at Lancaster University.

R package development

For a detailed and authoritative reference on R package development see the Writing R Extensions manual on CRAN.

Average health insurance premiums, by state

Premiums for family health insurance rose an average of 62 percent -- $9,249 a year to $15,022 a year -- according to the latest survey of employer-sponsored insurance by The Commonwealth Fund.

Employees' contributions to their premiums rose 74 percent during the same time period, from an average of $2,283 to $3,962. And deductibles more than doubled, to an average of $1,123 a year.

The report covers the years from 2003 through 2011; it will be a while before we get comprehensive data for health care reform, which takes full effect next year. In the meantime, we've posted the proposed rate filings for Washington on our website.

Among states in the West, Washington is a standout for below-average premiums compared to median household income, the study found. In Oregon, Idaho, California, Montana and Nevada, premiums compared to income were higher. (Click on the map above for more on this.) In pure dollar terms, Idaho is the fifth lowest-cost state in the country, although its average deductibles are significantly higher than Washington's.

The lowest average premiums were in Arkansas; the highest in Massachusetts.

Regardless, "Health insurance is expensive no matter where one lives," the report's writers concluded. "...Across the country, insurance premiums have risen far faster than median (middle) income for the under-65 population.)"

Here are the state average premiums in our region:
  • Washington: $5,144 single, $14,559 family
  • Oregon: $5,055 single, $14,283 family
  • Idaho: $4,553 single, $13,211 family
  • California: $5,255 single, $15,837 family

Long-term care insurance: Why have the costs been going up so much, and what can I do?

One of the most common complaints we hear -- and one of the most frustrating -- is from people who have been paying for long-term care insurance for years, but are on the verge of losing the coverage because they can't afford the cost of fast-rising premiums.

Unfortunately, this is a national problem.

So what can you do if the increase is more than you can afford? You can choose to reduce your benefits under the policy, such as:
  • Reduce your daily benefit
  • Reduce the benefit period duration, such as from five years to two
  • Reduce the amount of your optional inflation protections
 You can also choose what's called the contingent non-forfeiture option. Under this option, you keep your policy in force and stop paying premiums. Your coverage does not end, and the company provides benefits for qualified long-term care services covered under your policy -- here's the caveat -- equivalent to the premiums you've paid.

You may also want to look at the Washington state Long-Term Care Partnership Program, a new option to help consumers pay for long-term care costs and avoid spending down or transferring assets to qualify for Medicaid.

Why have long-term care prices been going up so much in recent years?

Long term care insurance is a fairly new product, with many companies not offering it until the early 1990s. As a result, they had little experience to base their prices on, and early policies were priced significantly lower than they should have been, based on how the cost of claims and the fact that -- unlike life insurance, for example -- few people cancel the policies. People get the policies, knowing they may well need them when they're older, and they tend to keep them.
As a result, most long-term care insurers have bumped up their premiums sharply in the past few years -- in some cases 40 percent or more -- angering customers who signed up for policies at relatively low cost years ago.   This puts insurance regulators in a bind. Consumers are understandably unhappy. But if regulators reject the rate increases, the insurance carriers could run into financial trouble, leaving them unable to pay claims. And nationally, a number of insurers have simply gotten out of the business of issuing new long-term care policies, which leaves consumers with even fewer choices. (In Washington, there are still a large number of companies approved to sell the coverage. Here's a list.)      

Stevens County woman convicted of insurance fraud over fake claims

A Stevens County woman has been convicted insurance fraud for claims she filed after a fire of undetermined origin destroyed her home in 2011.

Jenny Rae Balsz, 44, of Colville, pleaded guilty May 28, 2013 in Stevens County Superior Court. She was sentenced to 30 days in jail, which she'll be allowed to serve as 240 hours of community service, plus fines and fees of $850.

(If you suspect someone of insurance fraud, here's how to reach our investigators.)

On the fifth of July, 2011, a fire at Balsz's home in Evans, Wash. burned the structure to the ground. Fire investigators were unable to determine the origin of the fire. At the time, Balsz was in Montana, visiting family.

Her insurance claim included several receipts for a total of $13,899 in items purportedly purchased from a home furnishings store. An investigator for Safeco, Balsz's insurer, later found that Balsz had not purchased any of the listed items at the store. In fact, the store didn't even carry some of the items listed, including antiques and a grandfather clock.

She also submitted a purported receipt for a $6,240 clarinet. The receipt also turned out to be false.

And she submitted a fraudulent $800-a-month lease agreement, claiming that she was paying rent to her landlord. The "landlord" turned out to be her live-in boyfriend; the insurance checks for living expenses went directly to Balsz.

Safeco, as required by law, reported their findings to our office's anti-fraud unit, known as the Special Investigations Unit. After they investigated further, our office sought charges against Balsz.

The charge on which she was convicted is a felony.

Important notice to insurers re: new online complaint system

As Washington state's insurance regulator, a large part of what we do is try to resolve consumer complaints against insurers: delayed or denied claims, wrongful cancellation of policies, etc.

To speed up the process, we have developed a new online "Complaint Response System," or CRS. This allows us to contact insurers over the internet while still protecting people's private information.

Here's the key part for insurers to know: On June 28, 2013, companies with an active Washington license will be automatically registered for the new system. Any consumer complaints received by our office regarding those companies will be uploaded to the CRS beginning July 1, 2013. After this date, we will no longer be sending complaints to you via US Mail. The CRS will be the only avenue used to forward complaints to you and receive your responses.

We would like to invite those companes to participate in our CRS training. It will only take a couple hours of your time and will assist you in navigating the new system.

We strongly encourage any of your staff who responds to Washington consumer complaints to attend one of the below trainings.

There are two training times available:

• Tuesday, June 18: 9:00 a.m. – 11:00 a.m. (PST)

• Monday, June 24: 1:30 p.m. – 3:30 p.m. (PST)

We will email the WebEx invitations on June 10th to your company's complaint contact.

To learn more about the company Complaint Response System (CRS) project, visit our meetings page.

New report: Washington State Health Insurance Pool

The state's high-risk health insurance pool, known as the Washington State Health Insurance Pool, has issued its annual report. From it:

  • The program saw a 5 percent decline in enrollment last year, probably due to the availability of a temporary (and now closing) federal high risk pool here in Washington state.

  • And claim costs increased 11 percent, from $93 million to $103 million.

Some 3,675 people are enrolled in WSHIP. These are folks that cannot find coverage at the current time in the individual insurance market or Medicare supplement market, due to pre-existing medical conditions such as kidney failure, cancer and HIV/AIDS. (Under federal health care reform, insurers next year will no longer be able to turn away sick applicants.)

Created in 1987 by the Legislature, WSHIP is overseen by a board of directors. The program is not state-funded: Premiums charged to members cover about a third of claim costs; health insurers pay the remaining costs. Administrative costs are about 3 percent of expenses.

Little-known fact: Many life insurance policies automatically end at a certain age

Did you know that many life insurance policies have a built-in end date? It’s true -- and most people don’t learn about this until their policy ends and they find themselves without life insurance.

Life insurance policies often have language that says the plan automatically ends when you turn a certain age, such as 65 or 90. If you’re lucky enough to live until your policy’s end date, you may find yourself in the uncomfortable position of being without life insurance at a time when your health might not be good enough for you to buy another life insurance policy.

To prevent that kind of unpleasant surprise, read your policy. If the policy has an end date, and if you’re still healthy enough to qualify to buy life insurance, you might want to find a different policy that doesn’t have an end date.

For more information -- including about the 10-day "free-look" period, what documents to save, etc., please see our "Tips for buying life insurance" web page.

Tools to help estimate the costs of medical procedures

Nationally, a number of consumer groups and government agencies have put together tools to try to make it easier to estimate the costs of a medical procedure before you have it. Among them:

Healthcare Blue Book, which describes itself as a "free consumer guide to help you determine fair prices in your area for healthcare services.

Fair Health Consumer Cost Lookup, an "independent, not-for-profit corporation whose mission is to bring transparency to healthcare costs and health insurance information."

If you're comfortable with Excel, the federal Centers for Medicare and Medicaid Services have also pulled together a lot of pricing data on the 100 most common inpatient services and 30 common outpatient services.

So what do you do if you're uninsured and are facing huge bills for a needed procedure? See our "can't afford health coverage" web page, which lists:

"Am I eligible for a subsidy to help pay for health insurance?"

As a result of the health care reform law, you might qualify for a health premium tax credit -- often referred to as subsidies -- that you could use to reduce your monthly health insurance premiums, reduce the amount of taxes you owe, or both.

Here’s a calculator that will show whether you’ll qualify for the tax credit. (Note: If your employer offers what is deemed affordable coverage -- meaning that the employee's coverage to cover him- or herself costs less than 9.5 percent of income -- you aren't eligible for the Exchange.)

If you are eligible for the tax credit, then you’ll need to decide whether you want to receive it. If yes, then you’ll need to buy your health insurance through the Exchange, also known as the WashingtonHealthplanfinder.

Health insurance plans will be available on the Exchange website starting this fall, and you can enroll in Exchange plans from 10/1/13 through 3/31/14. Plans will start as early as 1/1/14, depending on the date that you enroll.

If you’re eligible for the health premium tax credit, you can receive it by:

• Taking the tax credit in advance, which will reduce your monthly premiums;
• Using the tax credit later, when you file taxes, to reduce the amount you owe in taxes for that year; or
• Taking part of the tax credit in advance to reduce your monthly premiums, and using the rest later to reduce the amount you owe in taxes for that year.

At the time that you sign up for a health plan through the Exchange, you’ll need to tell the Exchange how you want to take your tax credit.

There’s nothing that you need to do right now; just be aware that if you qualify for and want to take the tax credit, you’ll need to sign up for a health plan through the Exchange between October and March.

For more, please see our "Health care reform -- what it means to you" page.

Job opening: Human resources consultant

We're recruiting to fill a Human Resource Consultant 3 (Senior HR Generalist) position with our agency's operations division, based at our Tumwater, Wash. office.
The successful candidate, with guidance from the agency's human resources manager, will use a high degree of professional judgment to consult with assigned divisions on a variety of complex human resources issues.
For more specifics, duties, salary, timeline, etc., please see the full job listing.

For other current job openings in our office, please see our "job opportunities" web page. At the current time, we have four positions we're recruiting for. The others include:

  • Deputy insurance commissioner for company supervision
  • Senior market analyst
  • Information technology specialist

"My company's wellness program is asking me health questions. Is that legal?"

We often hear from consumers who ask whether it's legal for their employer to ask health questions in conjunction with employee wellness programs.

Last week, the federal government issued a final rule addressing this issue. The answer: Yes, employers can do that, as long as they meet certain non-discrimination criteria. Among them:
  • The wellness program must be "reasonably designed to promote health or prevent disease,"
  • must not be overly burdensome,
  • and may not be "a subterfuge for discriminating based on a health factor."

Here’s a link to the rule where you'll find a lot more details, plus a link to an article that gives a good overview of the rule.

Interactive slides with googleVis on shiny

Following on from last week's post, here are my slides on using googleVis on shiny from the Advanced R workshop at Lancaster University, 21 May 2013.

googleVis on shiny

Again, I wrote my slides in RMarkdown and I used slidify to create the HTML5 presentation. Unfortunately you may have to reload the slides that use googleVis on shiny as the JavaScript code in the background is potentially not ideal. Any pointers, which could help to improve the performance will be much appreciated.

Many of the examples in my slides are taken from my post First steps of using googleVis on shiny, however the presentation also demonstrates that it is possible to inject JavaScript code into a googleVis chart to trigger a shiny event, see also the example below.
Read more »