Friday, April 30, 2010

WA judge: Insurer can be held liable for agent's actions

In a ruling that’s being closely watched by the insurance industry, a Thurston County, Wash. judge has affirmed that the Washington state insurance commissioner may hold an insurance company liable for the actions of the company’s appointed agent.

“If you allow someone to do business on your behalf, it only stands to reason that you can be held responsible for what they do,” said Washington state Insurance Commissioner Mike Kreidler.

In an order dated April 23, 2010, Superior Court Judge Paula Casey ruled that Chicago Title Insurance Company could be held responsible for illegal inducements offered to solicit title insurance business by one of its appointed agents, Land Title Company of Kitsap County, Inc.

The alleged violations included illegally “wining and dining” real estate agents, builders and mortgage lenders by providing them with such things as:
  • hundreds of dollars in meals,
  • thousands of dollars for a golf tournament,
  • monthly advertising for at least one real estate agent,
  • purchases at a Board of Realtors’ auction, and
  • Seattle Seahawks playoffs game tickets.
Although Land Title was Chicago Title’s exclusive agent in the Washington counties at issue, Chicago Title argued that it was not responsible for Land Title’s acts. At a hearing in the matter last year, the company maintained that there was no legal basis to hold it accountable for its agent’s actions.

In a consent order last October, the company said it would appeal the agent liability issue, but agreed to pay a fine of $48,334 if it did not prevail. Chicago Title has not yet exhausted all appeals.

WA plans to run its own temporary health insurance program for the uninsured

Insurance Commissioner Mike Kreidler and Gov. Chris Gregoire have notified Health and Human Services Secretary Kathleen Sebelius that Washington state intends to run its own temporary, federally-funded high risk health insurance program.

“We cannot afford to miss this opportunity to provide much needed coverage to our uninsured,” said Kreidler. “There are many details that need to be worked out, but we plan to leverage the administrative framework and experience of the Washington State Health Insurance Program (WSHIP).”

The Patient Protection and Affordable Care Act designated $5 billion in federal funds to create temporary high risk pool programs to provide health insurance to currently uninsured individuals with preexisting conditions from July 1, 2010 to Jan. 1, 2014. States could either let the federal government run the program or contract with the federal government to set up the high risk pools through state programs or private non-profit entities.

More, including a link to the letter.

Thursday, April 29, 2010

Regence issues warning about unusual "vitamin coverage scams"

Regence BlueCross BlueShield has issued an unusual warning for consumers to "beware vitamin coverage scams."

Regence members in Washington, Oregon and Idaho, the company says, have reported getting notices for medical services they did not receive. The claims were allegedly filed on behalf of companies selling nutritional supplements. The claims are coded for things like consultations, lab work or x-rays, not for vitamins.

Here's a link to the consumer alert.

Insurance news: high-risk pools, insurance murder case, health insurer seized, and bill would re-up fed flood insurance for 5 years

Insurance news this morning:

USA Today: Health Insurance Risk Pools: About 200,000 people already enrolled in 35 state high-risk insurance pools "will not be allowed to enroll this summer in a new lower cost federal program for people like them because they already buy pricey state-run plans." In order to be eligible, "a person can't have had health coverage for six months. … The state pools charge high premiums — often double standard rates for healthier people in the individual market — to help cover costs." The health overhaul puts aside $5 billion for the new high-risk pools "and says federal risk pools can't charge more than standard rates. ... California and Texas are urging applicants to their state pools to consider waiting for the federal program"
USA Today: IRS lacks clout to enforce mandatory health insurance

Feinstein pushes to cancel Anthem rate hike

WA man guilty of killing 3-y/o girl for $200,000 in life insurance; preyed on single moms so he could target their kids for insurance payoffs

Judge liquidates troubled medical insurance firms: A judge has ordered the permanent shutdown and liquidation of two Tennessee companies accused of selling phony medical insurance policies. The Tennessean reports state insurance officials say Springfield-based American Trade Association and Smart Data Solutions LLC collected almost $22 million in premiums and left customers with nearly 24,000 unpaid claims.

Flooding: House passes bill to improve NFIP and reauthorize it for 5 years

--PIA applauds

Utah governor worries about the cost of high-risk pool: Utah isn't ready to dive into a temporary high-risk insurance pool created through the new health reform law until it gets some assurances the federal government will cover the costs. Gov. Gary Herbert sent a letter Wednesday to Health Secretary Kathleen Sebelius questioning the financial feasibility of the $5 billion program, which is supposed to kick in at the start of July.

WellPoint to cancel coverage only in fraud cases: Health insurer WellPoint Inc. said Tuesday it will start complying ahead of schedule with a health care reform provision that limits cases in which insurers can cancel coverage when a customer gets sick.

Seattle Times: Fine print hinders effort to cover young adults: President Barack Obama is pushing to speed up insurance coverage for young adults in their twenties - a key early benefit of his prized health care overhaul - but the law's fine print suggests some won't be able to sign up until next year.

Wednesday, April 28, 2010

News clips: Insurers are hiring, updates on health reform and federal flood program, and the latest on Hulk Hogan's insurance woes

In news today, a survey by an insurance jobs website, found that 74 percent of the nation's top insurers are now hiring, including several expecting to add at least 2,000 workers this year.

USA Today: Next in health care war: Applying the law: Dozens of special-interest groups that helped shape the 10-year, $938 billion health care measure over the past year — from insurance companies to patient advocates — are gearing up for a second wave of lobbying as the Obama administration prepares to implement the law.

-Is putting older kids on your health plan the best option?

-NYT: Will the homeless benefit?

Forbes: NE gov to abandon its state-run high-risk pool in favor of letting the feds do it

Overextended NFIP can’t seem to get back on track (federal flood insurance program has expired three times in just the past few months)

WA Post: Gaps in insurance policies make oral drugs too pricey for some cancer patients

And finally, the continuing saga of Hulk Hogan’s insurance woes: Wells Fargo: Hulk Hogan Rejected our Insurance Advice

Tuesday, April 27, 2010

Insurance, insurance agents and social media: "...Independent agents need to acknowledge that having a Web presence is non-negotiable"

Insurance Journal ran an article yesterday about the insurance industry and social media -- meaning things like Facebook, Twitter, blogs, Skype and other forms of interaction on the internet. The article's first paragraph is key:
"The insurance industry is not as quick to adapt to change as other industries," but independent insurance agents need to acknowledge that having "a Web presence is non-negotiable," said Michael LaRocco, president and CEO of Fireman's Fund Insurance Companies.
As Washington state's insurance regulator, this is a topic we've been giving a lot of thought to as we try to get our consumer-protection message out in an era of shrinking traditional media outlets. We set up this blog last summer, and then launched our Twitter feed. Despite our initial ambivalence -- who's going to read about insurance? -- both have grown at a pretty healthy clip.

In a word-of-mouth business like insurance, social media seems like a natural fit. It allows you to be in frequent contact with your customers in a way that they want. Online, we see some agents, brokers and companies trying a variety of different approaches. Some just try to keep up a constant drumbeat of "call me for a quote" or some variation on that. Others -- probably a lot more effective, frankly -- are a mix of insurance news, community news and advice. One agent that we follow on Twitter tracks flood insurance closely, others try to build rapport by serving up a lot of insurance tips.

Take a look at the Twitter feed for Mid-Columbia Insurance out of Kennewick, for an example of someone working hard to keep the site fresh. The web is littered, on the other hand, with folks who started sites and then abandoned them. (Like this one.)

Also, we're seeing insurance companies closely monitoring Twitter for people complaining about them. We've seen numerous Twitter posts from companies trying to directly contact people complaining about stalled claims or other issues.

State Farm, in particular, has a virtual open dialogue going with customers on its Twitter feed. Take a look.

More on this soon.

Monday, April 26, 2010

Insurance news: Climate change, how to curb the cost of health care, and insurer extortion case

The Seattle Times this weekend ran an op-ed by Washington state Insurance Commissioner Mike Kreidler and Seattle City Light Superintendent Jorge Carrasco. The topic: Climate change.

AP (via ABC News) talks about the "Health Care Law's Unfinished Business: Cost Curbs."

In Tennessee, a couple of companies that we're well-acquainted with are trying to convince a judge that they should be allowed to continue selling health insurance. The problem: TN regulators say the companies have more than $7 million in unpaid health claims -- but only about $2 million in the bank.

And finally, there's this unusual case: A New York Life customer (and former agent, and former manager) was unhappy with the handling of his $49,500 claim. Then it gets interesting. From ABC News:
Rather than walk away, (Anthony) Digati decided to take the dispute to another level. He created a website dedicated to New York Life's products and hired an email spam service.

Then he did something that would get him into a lot of trouble. He sent a letter and several emails advising New York Life officials that it would be in the company's best interests to pay him his money… or else.
Digati has been indicted by a federal grand jury for allegedly attempting to extort $3 million. From the article:
The case is interesting because it is not entirely clear from court documents whether Digati was – as the government claims – intent on extortion – or whether he was merely an extraordinarily frustrated and dissatisfied customer who engaged in hyperbole and exaggerated threats.

Thursday, April 22, 2010

Insurance news: Chinese dryall, new long-term care program...Oh, and a very angry Hulk Hogan.

AP: Nearly 4m to pay health insurance penalty by 2016: New congressional projections show that nearly 4 million Americans will have to pay a penalty for not getting health insurance.

NYT: Louisiana bill would ban Chinese drywall cancellation
Reuters: Sebelius seeks no new money for US healthcare law: HHS’ 2011 budget request unchanged even with new law

BusinessWeek: AK becomes 21st state to join lawsuit against federal health care law

Boston Globe: In MA, Two health insurers ordered to use their 2009 rates, instead of higher 2010 proposed rates. Companies will comply for now (as have four others), but appeal.
Kaiser Health News: Will private Long-Term Care Insurance Supplement the New LTC Insurance Plan in the Federal Health Bill?

NYT: Louisiana bill would ban Chinese drywall cancellations: Legislation would bar property insurers from canceling, refusing to renew, or increasing premiums or deductibles because of Chinese drywall at a property. Former pro wrestler Hulk Hogan sues his insurance broker for “malpractice”, saying that the broker should have advised him to have an umbrella liability policy to protect his net worth after a car accident severely injured his son’s friend.

Insurance Journal: Convicted kidnapper of South Dakota insurance executive sues same insurer for $500k, vowing to give any punitive damages to the USO and the Make-a-Wish foundation

Wednesday, April 21, 2010

How to look up the number of complaints against insurance companies

We've just updated a popular feature on our website, the online "complaint comparison tool."

Our computer folks put a lot of work into this database. It allows you to see how many complaints we've received against each insurance company, and for an apples-to-apples comparison, the tool compares that number to each company's market share.

The ratings vary widely, with some big-name insurers getting half as many complaints as others -- while having twice as many customers.

What's new? The tool now includes 2009 info, and there are several new types of companies listed, including title insurers, life insurers and annuity companies. The rankings are sortable (up or down) by clicking on a heading.

For example: Want to see how the major insurers in the area stack up against each other? Click on "market share."

Tuesday, April 20, 2010

Insurance news: Some insurers to cover adult kids early, millions in travel claims, and lots of coverage on our extreme fraud case

Several large health insurers - including UnitedHealthcare, Humana, Kaiser Permaanenet and WellPoint - have said they'll start some of the health reforms early, letting adult kids stay on their parents health plans until age 26. According to Kaiser Health News, the companies said they're changing rules now to prevent young adults from falling into a coverage gap.

For the most part, travel insurance companies are paying claims from the volcanic ash fallout. Of course there are exclusions, but you could be in luck if you had non-refundable prepaid travel. According to the New York Times, stranded passegers who qualify can get paid $150 to $250 a day up to $1,500. The industry expects to see millions in claims from travelers. Something to think about when you're planning your summer safari...
Read the full story.

And finally, Here's some coverage on our release about an extreme fraud case out of Kelso, Wash.:

Puget Sound Business Journal: State: Kelso woman scammed $200k in insurance fraud
-Longview Daily News: Kelso woman sentenced for filing dozens of fraudulent insurance claims
-KBKW: Long string of “accidents” turns out to be insurance fraud
-Seattle Weekly

Monday, April 19, 2010

Guilty plea in fraud case involving faked foot amputation and other claims

(News release from the Washington state Insurance Commissioner's office)

A Kelso, Wash. woman has pleaded guilty to attempted insurance fraud after collecting more than $200,000 for dozens of bogus medical claims, including falsely claiming that her husband’s foot had been amputated.

Kelly Klein, 47, had accident insurance through an employer. In less than three years, she filed 96 claims stemming from eight alleged accidents involving her family members.

“Insurance fraud drives up the cost of premiums for all of us,” said Washington state Insurance Commissioner Mike Kreidler, whose Special Investigations Unit helped investigate the case. Washingtonians pay an estimated $200 to $300 a year in increased home- and auto insurance due to fraud, according to the National Insurance Crime Bureau.

In insurance claims filed from April 2004 through January 2007, Klein said that:

• A farm tractor had crushed her husband’s foot, requiring a medical helicopter flight to the hospital for an amputation. She also filed a claim for a prosthetic foot.

• Her teenage son had sustained severe burns in a fireworks accident, requiring days of treatment at a Seattle burn center.

• Her teenage daughter and husband had been seriously injured in an automobile accident, with the daughter fracturing her femur and the husband needing a wheelchair.

To back up the claims, Klein submitted receipts, medical records, a police accident log and other documentation to her insurer, American Fidelity Assurance.

But state and company investigators concluded that Klein had forged many of the documents. Klein’s husband never lost his foot. He was never evacuated by medical helicopter. Her son was never seen at the burn center. Investigators combed through accident reports and could find no evidence of the major car wreck she described.

Numerous checks with doctors’ offices, therapists, clinics and hospitals also revealed that Klein’s family members had either never been patients there, or hadn’t been seen for the sorts of major medical problems she claimed.

On Thursday, Klein was sentenced in Cowlitz County Superior Court to 365 days in jail, with 335 suspended, as long as she has no further criminal violations. (She will be allowed to serve the 30 days on a work crew or with community service.) She has also repaid $209,500 in false claims to American Fidelity Assurance and $5,339 to Aetna.

Wednesday, April 14, 2010

The federal health-care reform law: Where to find answers to your questions

It took some time, but there's a fast-growing amount of well-sourced information out there about the effects of federal health-care reform: What takes effect when, who's affected, how, etc.

Here's an updated look at some of the best places to find information:

The U.S. Department of Health and Human Services, which is doing a lot of the implementation work and rulemaking now, has an excellent page of questions and answers, from the general to pretty specific. (You can also email them at, and they'll try to post an answer online.)

This morning, the National Association of Insurance Commissioners posted a long list of frequently asked questions, focusing particularly on consumers, employers and seniors. They tend to be big-picture questions.

We've also posted a substantial amount of information on our own website, handily arranged by when things take effect. Want to know what kicks in in the first 90 days, or by the end of the year? Start here.

The New York Times' Tara Parker Pope and Michelle Andrews have been answering a lot of specific questions about the reform law on their "Prescriptions" health blog. The answers tend to be more in-depth than the FAQ approach. Questions include "Will generic drugs be delayed?", "Will the law increase coverage of mental health services?" etc.

If you really want to drill deep, take a look at FamiliesUSA's "Health Reform Central," where the pro-reform group has a large collection of white papers, explainers and stats.

Similarly, the Kaiser Family Foundation has a health reform page, which includes a handy online tool to illustrate how premium subsidies will work, an implementation timeline, etc.

Study: Motorcycle theft, ranked by state (WA is 14th highest)

We mentioned this in this morning's news clips, but it's worth another post. The National Insurance Crime Bureau says that "motorcycle thefts in 2009 are continuing their downward trend."

Some 56,093 motorcycles were reported stolen last year, the NICB says, down from 64,492 in 2008. That's a 13 percent decrease.

But the group also notes that part of that trend may be due to the fact that there are fewer bikes available to steal. Motorcyle manufacturers reported sales declines of about 41 to 47 percent last year, compared to 2008.

The most stolen makes:
  • Honda: 13,688
  • Yamaha: 11,148
  • Suzuki: 9,154
  • Kawasaki: 5,911
  • and Harley-Davidson: 3,529.
(Bonus round: the study identified a total of 593 different motorcycle makes among those stolen.)

Biggest states for theft: California, Texas, Florida, North Carolina and Georgia, which combined accounted for nearly 40 percent of the thefts. (Washington ranked 14th, Oregon's 35th, and Idaho's 41st.)

The decline reflects a similar trend in lower thefts for passenger cars and light trucks, the group says.

And how likely are you to get your bike back? The report says that the average recovery rate over the past three years was about 36 percent.

Here's the press release, which includes a link to the full report at the top.

Insurance news: Motorcyle thefts drop, FL orders company into receivership, and study finds that heart attack victims w/o health coverage put off going to the hospital

LA Times: People suffering heart attacks put off going to the hospital if they don’t have insurance, study finds

NY Times: GA insurance commissioner balks at request on new health law: The insurance commissioner of Georgia has chosen not to comply with a federal request to create a state pool for high-risk insurance plans, opening a new front in the resistance by state Republican officials to the new federal health care law.

Miami Herald: Fla orders receivership for Northern Capital Insurance

Claims Journal: Report: Motorcycle thefts dropped 13 percent in 2009

Nashville Tennessean: Smart Data Solutions and American Trade Association accused of $21 million fraud: “Very few of the members’ health-care claims were ever paid…(Bart) Posey siphoned off much of the money from members’ premiums for his personal and family expenditures, including real estate, cars, boats, recreational vehicles and donations of about $140,000 to the University of Alabama Crimson Tide Foundation.” $7 m in unpaid claims stacked up, with only about $2m in SDS’ bank accounts, according to the story.

Tuesday, April 13, 2010

Investment advisor's insurance license "suspended pending revocation proceedings"

The Washington state insurance commissioner's office has issued an emergency order suspending the insurance license of a Kirkland-based investment advisor who allegedly ran a years-long multi-million-dollar scheme to defraud investors.

Rhonda L. Breard has been licensed to sell insurance in Washington state for nearly 20 years. According to a criminal complaint filed in U.S. District Court last month, Breard became an investment advisor for wealthy clients. She told them she was investing their money in a variety of financial and insurance products. She provided financial statements falsely showing that the investments had been made. Instead, according to investigators, she spent the money on herself.

The federal complaint estimates that Breard defrauded at least 20 investors out of millions of dollars.

"The Licensee knowingly devised a scheme and artifice to defraud investors and to obtain money and property under false pretenses, representations and promises," reads the emergency order by the state insurance commissioner's office. It gave her three days to turn in her state insurance license.

On April 6th, Breard pleaded guilty in federal court to a single count of felony mail fraud. (The financial statements were mailed to her clients.) She faces up to 20 years in prison.

The order was issued Thursday and takes effect today It orders Breard to turn in her insurance certificate within 72 hours.

(Updated to include link to order and correct a formatting error. Sorry about that.)

Monday, April 12, 2010

Washington ranks 35th in cost of auto insurance

According to a newly released study by, Louisiana has the highest average auto insurance rates in the country and Maine has the least expensive. The data determined average auto rates for more than 2,400 2010 autos from six large carriers across 10 zipcodes in each state.

What's behind the rates? According to, the varying laws in each state are partly to blame as is the state' population. From today's New York Times:

According to, states’ different laws are partly to blame. “Our findings show that the financial ramifications of specific state laws and regulations are driving high rates in certain states,” Amy Danise, senior managing editor of, said in a statement. “No matter how good your own driving record is, you’re paying for the decisions of lawmakers.”

Washington state came in between Nevada and Utah. See the full report here.

Feds gathering input on medical loss ratios and reviewing health insurer rate hikes

The federal health-care reform law includes a number of insurance market reforms intended to protect consumers. Among them, it requires health insurers to submit data on how much money they spend on care versus profits, advertising, etc. (In case you're taking notes, the term for this is the "medical loss ratio.")

The new law says that if the medical loss ratio is below a certain level, people enrolled in that particular health plan will get rebates.

The U.S. Department of Health and Human Services is gathering public input on how to put in place policies to define and calculate this percentage. Here's a letter that HHS Secretary Kathleen Sebelius sent to the National Association of Insurance Commissioners about the matter. (And here's the Federal Register notice.)

A similar process is underway for elements of the law involving health insurer rate hikes. The law requires HHS to work with the states "to establish an annual review of unreasonable rate increases, to monitor premium increases and to award grants to states to carry out their rate review process." The law also requires insurers, starting this year, to post on their websites any justification for such a rate increase. (For a lot more detail on this aspect of the law, see this request for comments, also published in the Federal Register.)

Feds warn against scam artists pretending to offer coverage under health-reform bill

U.S. Department of Health and Human Services Secretary Kathleen Sebelius is warning of scammers attempting to capitalize on the new health-reform law "by setting up 1-800 numbers and going door to door trying to sell fraudulent insurance policies." She's asking state insurance commissioners and attorneys general to investigate and prosecute.

From Sebelius' letter to state insurance commissioners:

Unfortunately, scam artists and criminals may be using the passage of these historic reforms as an opportunity to confuse and defraud the public...Some have attempted to make dishonest profits by urging consumers to obtain coverage in a non-existent “limited enrollment” period that they falsely claim was made possible by the new legislation.
She also noted that:

...There are new insurance options in the near future – a new high-risk pool program for those blocked out of insurance due to a pre-existing condition, for example, and new insurance protections that begin in September. But, in the meantime, consumers should beware policies that are time limited, offer limited benefits, or advertise themselves as necessitated by health insurance reform.

Friday, April 9, 2010

The Washington flood Market Assistance Plan: Will companies step forward?

Washington state Insurance Commissioner Mike Kreidler has asked about 200 insurers to take part in a voluntary "market assistance plan" (MAP) to help businesses in the Green River Valley find adequate flood coverage. These plans work like a matchmaker, pairing companies needing flood coverage with insurers willing to sell it.

State lawmakers and Gov. Chris Gregoire recently approved legislation granting Kreidler authority to order insurers to form a "Joint Underwriting Association" and sell flood coverage in the heavily industrialized area, which is downstream from the Howard Hanson Dam, if insurance is unavailable.

At legislative hearings in Olympia in January, insurance industry lobbyists told lawmakers they much preferred the voluntary matchmaker approach:

Lewis County couple charged in $17,000 insurance fraud case

A Lewis County, Wash. couple has been charged with filing a false insurance claim for nearly $17,000 in property allegedly destroyed by rainwater leaking into a truck.

Jennifer Mau, 30, and David Eden, 47, have been charged in Lewis County Superior Court with filing a false insurance claim or proof of loss. The case was submitted to the county prosecutor by the state insurance commissioner’s office.

On Jan. 5, 2007, the couple’s home in Morton burned. The two said they stored new furniture and belongings at a storage rental facility in Centralia while the home was being rebuilt.

On March 30, 2007, Mau rented a U-Haul truck to move the items to the couple’s new home. Afterward, Mau and Eden claimed that rainwater leaked into the truck, damaging their belongings. They filed a $16,789 claim with Republic Western Insurance. They submitted store receipts for the items, which they said they discarded at a landfill.

But there were several problems with the claim:

• U-haul subsequently conducted water tests on the truck and determined that it did not leak.

• Weather reports for that date indicate little or no precipitation.

• And the weight of the items Mau claimed to have taken to the landfill would have significantly exceeded the weight dumped at the landfill, according to the landfill receipts they submitted.

After investigating the claim, Republic Western denied it. Insurance Commissioner Mike Kreidler’s Special Investigations Unit also investigated and took the case to the Lewis County prosecutor.

Wednesday, April 7, 2010

What people are calling us about...

Our consumer hotline (1-800-562-6900) continues to get a lot of calls from folks with questions about federal health reform, what it means, and when different provisions of the law will take effect.

Among the calls so far this week:

• When it will start?

• What are the benefits?

• How much will it cost?

• When can I enroll my dependent child who is under the age of 26? Does this apply to non-students?

• When will the pre-existing wait period be waived?

• How much is the small employer tax credits?

• How do I apply for the exchange?

• Will this open up Basic Health to enrollment this year?

We're trying to answer as best we can, although many of the details are still being worked out (and the exchanges don't take effect until 2014, sorry). We've also set up this detailed web page about the law and how it works, with special sections for its effects on different categories of people (seniors, young adults, small business owners, etc.) Take a look...

Tuesday, April 6, 2010

Tennessee whistleblower in illegal health insurance scam: "People would call in crying, but we were instructed to tell them that their claims were `in process' and to call back in 30 days"

The Nashville Tennesseean has an extraordinary story today about a company and a number of individuals that our office issued a cease and desist order against back in January.

From the story, by G. Chambers Williams III:

When Lisa Hernandez went to work for health-insurance administrator Smart Data Solutions as a customer-service representative, she thought her job would be to help sick people get their medical bills paid.

But on just her second day, she knew something was horribly amiss.

Hernandez said she had to answer an unending barrage of phone calls from anguished policyholders questioning why no payments had been made on their health claims — some of which had been pending for as long as "four or five years."

"People would call in crying, but we were instructed to tell them that their claims were 'in process' and to call back in 30 days," Hernandez said. "We were told to flat-out lie to people just to get them off the phone."

For most, the medical bills were never paid, she said, adding that "there were boxes of unpaid claims sitting on the floor everywhere — they didn't even have any file cabinets."
The company and its affiliates are under investigation in a number of states, including Washington. Our office believes that dozens of state residents unwittingly bought illegal health insurance products from this network.
More from the Tennessean story:
A companion company, the American Trade Association, marketed the policies, and SDS was the purported benefits administrator; together, the two firms — controlled by Springfield businessman Bart S. Posey — collected as much as $14 million over the past year and a half alone from customers in all 50 states and the District of Columbia, according to the Tennessee Department of Commerce and Insurance.
Stay tuned.

Health insurance reform in Washington state: New data from HHS

The U.S. Department of Health and Human Services this morning posted this detailed summary of some of the effects of the new federal health care law, from effects on senior citizens to small business to doctors.

From the agency:
  • 811,000 residents who do not currently have insurance and 359,000 residents who have nongroup insurance could get affordable coverage through the health insurance exchange.
  • 457,000 residents could qualify for premium tax credits to help them purchase health coverage.
  • 897,000 seniors would receive free preventive services.
  • 159,000 seniors would have their brand-name drug costs in the Medicare Part D “doughnut hole” halved.
  • and 92,500 small businesses could be helped by a small business tax credit to make premiums more affordable.
The page has a lot more specifics...

Insurance news: Fewer WA employers offer health coverage, scam alert issued by feds, ND joins lawsuit against health-reform law

Skagit Valley Herald: Fewer WA employers offer medical care (55 percent, down 2 percent from previous year)

NY Times editorial: Health reform law "eliminates a corporate tax advantage on retiree drug benefits that amounts to double-dipping"

Auburn Reporter: Kreidler: Work on health care reform is already under way

ABC News: Scam alert issued on new health care law

L.A. Times: New health care law is full of unknowns

Bismarck Tribune: N.D. joins lawsuit over health care bill

Three plead guilty in insurance fraud case

A Tacoma couple and a neighbor have pleaded guilty to fraud-related charges for their involvement in false insurance claims totaling thousands of dollars.

Anthony Mezias, 37, has pleaded guilty to 1st degree theft, a class B felony. His wife Melissa Mezias, 34, pleaded guilty to "attempted false claims or proof" in an insurance claim, which is a gross misdemeanor.

Sentencing of the two is scheduled for July 12th. In the meantime, the couple must repay $8,800 to State Farm. Investigation work on the case was done by State Farm and by the state insurance commissioner's Special Investigations Unit.

Four years ago, the couple reported that their home was burglarized while they were on a clam-digging trip. Among the items listed in their $50,000 homeowners' insurance claim: a $5,000 plasma TV and $3,000 Persian rug. They said they bought the TV from a Seattle man.

During the investigation, State Farm insurance investigators discovered that the Mezias' neighbor, Brian Emmett, 41, had reported a burglary at his home in Tacoma earlier in 2006. He bought several replacement items, copied the receipts, returned the items to the stores, then submitted the receipts to State Farm anyway. He also submitted a falsified invoice for sports cards he claimed were stolen. All told, investigators found, Emmett filed $11,785 in false claims.

Emmett has pleaded guilty to one count of false claims or proof, a class C felony. He has also agreed to pay back State Farm and to testify against the Mezias', who claimed that he had sold them the $3,000 Persian rug. He says he did not sell them a $3,000 rug.

Note: this post has been updated. The Seattle man was originally charged with one count of false claims or proof, but the charge was dismissed after he testified against the Mezias'.

New info: How the new health law affects you

We've posted new web pages detailing what the federal health reform law means, both within the next few months and as full implementation takes place over the next several years.

Here's the main page, with a breakdown of provisions taking effect within 90 days, 6 months, this year, in 2011, 2014, and later. And the information also broken down by effects on:
  • -working families
  • -seniors
  • -children
  • -young adults
  • -small businesses
  • -hospitals and health-care providers
  • -and state government
And here's our breakdown of Frequently Asked Questions -- which we'll keep adding to -- which has a lot of very specific information on who's affected and how.

Friday, April 2, 2010

Natl Weather Service: wind storm predicted for Puget Sound, gusts up to 43 mph

The National Weather Service is predicting high winds this afternoon in much of western Washington, with gusts of up to 43 miles an hour in Seattle. Weather Underground is predicting gusts up to 50 miles an hour.

So what if a tree falls on your carport, or your boat at the marina sinks in high winds? And who pays to clean up all those branches that fell into your yard?

We've posted answers for all these storm-related questions on our website. Take a look.

(And here's some good news: the wind's supposed to let up by this evening.)

If you have damage and have questions or problems with your insurer (and live in Washington state), call our consumer affairs hotline at 1-800-562-6900. It's not a phone tree; it's staffed by live people.

Thursday, April 1, 2010

WA insurance commissioner: Work on health care reform is already underway

Work to launch federal health care reforms is already underway, Washington state Insurance Commissioner Mike Kreidler said Thursday.

“This is a time of exhilarating change, and we’re already in the thick of it,” Kreidler told reporters in Seattle. “Every single health insurance plan in Washington state – and there are thousands of them – will change this year.”

Here are six key changes to policies that will take effect by the end of 2010:

No more out-of-pocket costs (like co-pays) for preventive care.

No more lifetime caps on benefits. (Many policies now include $1 million or $2 million limits.)

Children can no longer be denied coverage due to pre-existing medical conditions.

Parents will be able to keep adult dependent children on their health plans until age 26.

For seniors, the coverage gap in Medicare’s prescription drug plan (the very unpopular “donut hole”) will gradually close, starting with a $250 rebate this year.

Individuals with pre-existing conditions who have been uninsured for several months can get financial assistance for coverage through Washington state's Health Insurance Pool (WSHIP).

“These changes all apply regardless of whether you buy coverage on your own or through your employer,” said Kreidler.

The public is clearly watching this issue closely. Within hours of the legislation passing Congress, the Insurance Commissioner’s Office began receiving emails and phone calls from people wondering how health care reform will affect them. The agency is posting detailed information on its website.

“We have our work cut out for us,” said Kreidler, whose staff must review and approve an estimated 2,000 new health insurance policies over the next few months. “But given what’s at stake, I couldn’t be more thrilled.”