Thursday, June 28, 2012

What was at stake in the ruling for Washington state

Earlier this month, we put out a report detailing what was at stake for Washington state -- down to the county level -- if the Affordable Care Act was thrown out by the Supreme Court.

The upshot was that more than 800,000 Washingtonians stand to get coverage through the Medicaid expansion OR to get subsidies to help them and their families pay for private insurance.

In addition, the report details the reforms, most of them largely unnoticed by the average person, that have already taken effect. Among these: Young adults can now stay on their parents' health coverage up to age 26, kids can't be denied insurance because they're sick, small businesses get tax rebates if they provide health coverage for workers, no caps on lifetime benefits, etc.

The most significant reforms will take place in 2014, including the state's new health care exchange, an online marketplace to shop for and compare insurance -- as well as a way for lower- and middle-income families to get substantial help paying for it.

The full report is at

Kreidler reaction to Supreme Court upholding health care reform law

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler expressed great relief with the U.S. Supreme Court’s decision upholding the Affordable Care Act and said Washington state is now well ahead of most states in reforming its health care system.

Many reforms are currently in place, but key benefits and programs take effect in 2014, including Washington’s new Health Exchange, federal subsidies to help 477,000 people afford health insurance, an expansion of Medicaid for 328,000 poor childless adults and the ban on insurance companies from denying people coverage if they’re sick.

“I’m very pleased the Supreme Court chose to uphold the Affordable Care Act,” said Kreidler. “We’ve been busy for two years now implementing the reforms and have made great progress, but there’s a lot left to do before 2014. With the court decision out of the way, we can continue our focus on where it should be – bringing relief to families struggling to find quality, affordable health insurance.”

The millions of Washington state consumers benefitting from the Affordable Care Act’s early reforms include:

  • More than 2.4 million people who no longer face lifetime caps on their health benefits.
  • More than 52,000 young adults up to age 26 who have stayed on their parents’ health plans.
  • More than 1.2 million people who now have coverage for preventive care with no co-pays or deductibles.
  • More than 60,000 people in Medicare who have saved hundreds on their prescription drugs.

Washington state also leveraged millions in federal funds available under the Affordable Care Act to create:

  • Public access to health insurance rate requests. 
  • A new marketplace in Washington state for health insurance in 2014 – called an exchange – where people can shop for health plans, compare their options and apply for subsidies.
  • A temporary health insurance program (PCIP-WA) for people with pre-existing health conditions.

“The Affordable Care Act is not perfect, but it moves us in the right direction and is the only meaningful reform that’s passed in decades,” said Kreidler. “The debate was clearly contentious, and I’m grateful to have it behind us. But, now it’s time to focus on the work ahead – more than a million uninsured people in our state are counting on us.”

Tuesday, June 26, 2012

Cease and desist order issued against Lenovo

Insurance Commissioner Mike Kreidler has issued a cease-and-desist order against computer maker Lenovo, barring the company from continuing to sell illegal service contracts in Washington state.

From May 2008 to May 2012, Lenovo (United States) Inc. is believed to have sold $153,415 worth of service contracts in the state. The plans, which covered repair or replacement of damaged Lenovo products, can only be sold to Washington residents by a licensed insurer or a registered service contract provider. Lenovo is neither.

Kreidler also ordered the company to mail a copy of the cease-and-desist order to all its Washington customers within 10 days.

Nothing in the order prevents the company from fulfilling the terms of the service contracts or from issuing a refund, if requested.

The company’s unauthorized sale of service contracts was initially disclosed by Lenovo itself when it applied for registration as a service contract provider in April 2011. At that point, the company said, it had already sold 855 contracts for $90,630.

When Kreidler’s staff reviewing the application sought more information, the company failed to respond, and later withdrew its application (December 2011). Lenovo later said it had sold a total of 1,327 contracts worth $153,415 to Washingtonians (May 2012).

The company has a right to demand a hearing. The order takes effect immediately.

Thursday, June 21, 2012

Theft charges for medical worker who submitted $4 million in bogus bills, sometimes claiming to be a doc

We're going to post a news release soon about this case:

A medical worker submitted at least $4.1 million in bogus bills to insurers, sometimes while falsely claiming to be a doctor or physician’s assistant, has pleaded guilty to theft.

Kenneth R. Welling, 45, of Lake Forest Park, pleaded guilty Thursday in King County Superior Court. The charges -- all of which are felonies -- include one count of first-degree theft and six counts of second-degree theft.

“This was a pretty audacious scam,” said state Insurance Commissioner Mike Kreidler. “We were tipped off to it when a patient contacted us, saying that Welling billed her insurer $89,000 for six surgeries that never happened.”

Welling is a registered surgical technologist and sole proprietor of Shoreline, Wash.-based Alpine Surgical Services. His license allows him to perform tasks like preparing supplies and instruments, passing them to the surgeon and preparing basic sterile packs and trays. But after patients had procedures done, he would often submit large bills with codes listing himself as a doctor or physician’s assistant. He is neither.

Kreidler’s investigators also found numerous instances in which Welling billed for surgeries that never happened. Sometimes he would include post-operative reports, listing himself as the surgeon.

No evidence was found to indicate that Welling was playing an improper role in actual medical care. The fraud involved billing.

“As far as we could tell, the only time he pretended to be a doctor was when he submitted bills,” said Kreidler.

In one woman’s case, Welling billed $140,323 as assisting surgeon for nine surgeries that never took place. Over a five-year period, he billed another woman’s insurer 107 times for 51 different surgeries, listing himself as the primary doctor. Hospital records show she’d only had surgery twice.

From 2004 through 2011, according to medical records obtained by Kreidler’s Special Investigations Unit, Welling billed five insurance companies at least $4.1 million for services he did not provide. He was paid $461,000.

“Part of the reason he got away with this for so long is that he’d rarely challenge an insurer who paid little or nothing,” said Kreidler. “He’d just send them the bills and hope they’d pay.”

The investigation also showed that some patients were complaining to their insurers.

“I am angry!” one woman wrote to her insurance company in 2011. “Here is yet another fraudulent claim. Can’t you people help me to stop this? I never had surgery on Aug. 27, 2009. I never met or had anything to do with Ken Welling.”

A sentencing date is expected to be scheduled soon.

Wednesday, June 20, 2012

Kreidler statement on Regence's proposed 14.7 percent rate hike

Regence BlueShield, one of Washington state's largest health insurers, is proposing an average 14.7 percent hike in premiums for its customers who buy coverage on their own.

Even with that increase, the company says it would also face a loss of $4.5 million from its surplus, which currently exceeds $1 billion.

Here's state Insurance Commissioner Mike Kreidler's statement on the proposal:

“We’ve just received this request. It will undergo a rigorous review by our actuaries.

“Regence contends that even with this increase, it would lose $4.5 million from the company’s surplus. To put that in perspective, that’s less than half of 1 percent of the company’s $1 billion surplus.

“In fact, Regence could continue to lose $4.5 million annually for the next 220 years and it would still have a surplus.

“A similar request by a sister company, Regence BlueCross BlueShield of Oregon, sought a 6.4 percent increase, starting August 1, 2012. But after our review and objections, it withdrew the request today. Any future rate request will face the same thorough scrutiny.”

Wednesday, June 13, 2012

Insurance tips: Credit scores and insurance scores

Many insurers use a credit-based "insurance score" as a factor -- a major factor, often -- in setting your rates. It's a quick way of quoting you a price, and insurers maintain that there's a correlation between these credit-based scores and a person's claims history.

Washington state limits how insurers can use these scores, and Commissioner Kreidler has repeatedly pushed for legislation to ban their use completely.

In Washington, insurers cannot hold the following things against you:
  • The number of credit inquiries
  • Collection accounts identified as medical bills
  • A loan if it's the initial purchase or finance of a vehicle or home.
In Washington, insurers must also tell you if you didn't get the best rate due to your score. If this happens, you're entitled to a free copy of your credit report from the credit agency that your insurer used.

What goes into an insurance score? Here's the breakdown of a score from FICO, one of the biggest companies generating these scores for insurers:

• Payment History (40%) – How well you have made payments on your outstanding debt in the past

• Outstanding Debt (30%) – How much debt you currently have

• Credit History Length (15%) – How long you have had a line of credit

• Pursuit of New Credit (10%) – If you have applied for new lines of credit recently

• Credit Mix (5%) – The types of credit you have (credit card, mortgage, auto loans, etc.)

How can you improve your score? The same way you'd improve your credit score: make payments (bills, taxes, fines, etc.) on time. Keep credit card balances as low as possible. Think carefully before opening new lines of credit, such as a department store charge card, just to get a discount.
You can check your credit reports from the three nationwide consumer credit reporting companies annually at If you find errors, contact the credit reporting company to have them corrected.

Monday, June 11, 2012

Insurance and vintage or antique cars

Q: I'm rebuilding my antique car and my grandfather's one-seater vintage biplane in my garage. Will my homeowners policy cover all the parts if they are stolen?

A: Probably not. Most homeowners policies exclude autos, aircraft, other motorized vehicles and their parts. You might have coverage for, say, a riding lawn mower or golf cart, but you'd be wise to talk to your agent and insurer about separate coverage that may be available for the parts during the rebuild process and after completion. Most antique cars and planes can be covered on specialized policies designed for their generally limited and unique use.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Friday, June 8, 2012

Coming this fall: Agents and brokers in WA can submit fingerprints electronically

In Washington, as in most states, we require insurance agents and brokers to submit their fingerprints for the required background check.

For years, this has been done on paper cards, on which a worker rolls the applicant's inked fingers. It's messy, but more importantly, it's difficult to get good, usable prints. In fact, there's a 30 percent rejection rate by the State Patrol, meaning that the applicant has to go through the whole process again. We know it can be a pain, but we haven't had a good alternative.

So, good news: Starting late this summer or early fall, we will begin accepting electronically submitted fingerprints. We strongly encourage our resident applicants to use the service.


For one thing, the rejection rate is much lower. Instead of 30 percent, it's less than 3 percent.

It will also cost less. It now costs $42.50 to submit a paper fingerprint card. It will cost $32.50 to do it electronically.

It takes less time. In fact, in some cases, it could mean getting your license issued weeks earlier than with a paper card.

And there's probably a location close to you. More than 30 locations in Washington state can provide the fingerprinting service. Pearson Vue exam centers offer the service when applicants take the insurance exam, and the company also has a third-party vendor, Morpho Trust, that offers fingerprinting at several additional locations. You can find links to both on our new web page about electronic fingerprinting for insurance licensees.

Lastly, a question I know we'll get: Are electronic fingerprints required? No, not at this point. But we intend to require them starting during the first half of 2013.

Thursday, June 7, 2012

Open letter from Commissioner Kreidler to Premera and LifeWise policyholders

Our office has denied requests from Premera Blue Cross to strip some of the company's health plans of vital prescription drug coverage.

Premera filed a request with our office in late April, seeking approval to remove all prescription drug coverage from its small employer plans. These are plans sold to employers with 1-50 employees. Premera subsidiary Lifewise filed a request to remove drugs from all of its catastrophic (meaning high-deductible) plans.

Commissioner Kreidler disapproved those requests. Here's an open letter from the commissioner to Premera and Lifewise policyholders. From the letter:

Let me be clear: Contrary to what Premera has implied, your health plan can keep generic drug coverage and even require you to use a generic drug first. Nothing in my recent decision restricts your health plan from covering generic drugs.But if you get sick and a generic drug doesn’t exist for your condition or doesn’t work for you, your health insurer must let you try a brand-name drug that could work.

I understand that generic drugs may work for many people most of the time, but it’s my job to protect all insurance consumers. There are some diseases for which generic drugs may not work, such as certain cancers and mental illnesses, diabetes, MS, certain types of arthritis, and AIDS.

Legally, if a plan has prescription drug coverage it cannot restrict someone’s access to a prescription drug that could be vital to a medical condition that’s otherwise covered by the plan and for which they’ve paid a premium.

Wednesday, June 6, 2012

New insurance bills take effect tomorrow

Four new insurance-related bills take effect tomorrow. None were insurance commissioner request legislation, but they will impact consumers starting June 7.

Whether you'd like to share your car or get evacuated home from a trip, there's something for everyone. Want to know more? Here's the complete list:

Usage-based insurance

Car sharing

Air rescue

PEBB ombudsman for retired state employees

Monday, June 4, 2012

Insurance and sleepovers

Q: My daughter's having a friend over for a sleepover. If the friend trips and falls or something, would my homeowners policy cover her medical bills?

A: Generally yes, since most modern homeowners policies have what's known as "guest medical" coverage. This is designed to pay the medical bills -- up to a specified dollar limit per accident -- for accidental injury to guests. But it doesn't cover you or other resident family members.

The coverage is a no-fault type of coverage that is designed to apply to accidents with no determination of fault or negligence on your part. Your insurer will still do an investigation to gather the facts of the accident.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Friday, June 1, 2012

Washington state insurance markets: Our annual report

Each year, we issue an annual report summarizing the insurance markets in Washington state, selected financial statement data, authorized insurers by line of business, top companies, top groups, company changes, etc.

Get 'em before they're sold out. (That's a joke. They're online only, and we have no shortage of pixels.)