Monday, April 12, 2010

Washington ranks 35th in cost of auto insurance

According to a newly released study by Insure.com, 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 Insure.com, the varying laws in each state are partly to blame as is the state' population. From today's New York Times:

According to Insure.com, 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 Insure.com, 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.