Wednesday, July 17, 2013

Statement on U.S. House vote re: delaying the individual mandate

Note: The U.S. House of Representatives is scheduled to vote today on a bill that would delay for a year the individual mandate requiring most Americans to have health coverage starting in 2014. The penalty for not having coverage next year would be $95 or 1 percent of income, whichever is greater.

Statement from Washington Insurance Commissioner Mike Kreidler:

“Delaying the mandate would be unwise. This is an issue of personal responsibility. It’s unfair for people who can afford coverage to not have it, and to expect the rest of us to cover the cost of their care if they become seriously sick or injured. ”
“A critical part of the Affordable Care Act was the provision requiring that insurers take all applicants. No more screening out people because they have pre-existing medical conditions. But to make that work, you have to have as many people as possible in the insurance pool.
“Without an individual mandate to have coverage, people would likely just buy insurance when they knew they needed it. That’s like letting people get homeowners insurance only when their house catches fire.”

More states asking insurers if they're ready for climate change

From a press release we just sent out:

Insurance companies are facing growing scrutiny over their preparedness for climate change, an issue that could potentially affect insurance affordability and availability.

“I’m very pleased to see more states joining this effort,” said Washington Gov. Jay Inslee. “Being prepared is clearly in the best interests of both insurers and the families and businesses they insure.”

Last year, insurance regulators in Washington, California and New York surveyed major insurers about what steps they’re taking to address risks to their underwriting and investment portfolios.

This year, regulators in Connecticut and Minnesota have also joined the survey.

“Climate change is a potential game-changer for insurers,” said Washington Insurance Commissioner Mike Kreidler. “We want to make sure that this issue is on their radar.”

Climate change poses a double challenge to insurers. Extreme weather events and droughts, for example, can sharply increase claims. Climate-related issues could also have a significant effect on insurers’ investments, potentially affecting their long-term ability to pay claims.

“Unprepared insurers are much more likely to simply pull out of markets, leaving homeowners and businesses struggling to find alternative coverage,” said Kreidler, who chairs the National Association of Insurance Commissioners’ working group on climate change. “And when insurers abandon a market, government tends to end up as the insurer of last resort.”

Kreidler’s office has been surveying insurers on this issue since 2008.

“I wish some companies were further along,” said Kreidler, “but I’m encouraged to see that a growing number of companies are taking steps to incorporate climate change into their risk modeling and investment considerations.”

For a look at past surveys and responses for Washington, California and New York, please see California’s Climate Risk Disclosure Survey web page.