Thursday, December 3, 2009

Kreidler: Premera's take on cost of health-care reform is misleading

In early November, Premera Blue Cross issued an analysis urging people to contact their Congressional representatives to oppose health reform legislation then in the U.S. House, on the grounds that it would “drive average premiums dramatically higher.”

Passing health reform in its current form, the letter warned, would boost health care premiums “by over $7,000” for families buying new or different coverage.

After a meeting between Office of the Insurance Commissioner’s staff and Premera officials to discuss the basis for the analysis, Insurance Commissioner Mike Kreidler this week sent a letter to the state’s congressional delegation.

Premera’s numbers are misleading, Kreidler said. In particular, the analysis gave no consideration to reforms aimed at reducing the cost of premiums. Nor did it take into effect the availability of new premium subsidies that would make health insurance affordable for many of those who can’t currently pay premiums for themselves or their families.

From the letter:

“…the Premera communication appears to be more of a political document than an actual analysis of the effects of any specific proposal before Congress…It ignores any of the expected benefits to passage of health care reform legislation.

“Health care reform is serious business. Individuals, businesses, organizations and industries are welcome and encouraged to speak their opinions. However, those debating the issues should do honest analyses, using complete information about the legislation currently under debate.”

The full text of the letter is here.

Kreidler: Fewer than 1 in 4 have federal flood coverage in the Green River Valley

Washington state Insurance Commissioner Mike Kreidler said Thursday that a recent check showed that fewer than 1 in 4 of the buildings in the Green River flood plain have federal flood insurance. He's strongly urging more owners -- as well as renters -- in the area to buy flood coverage as soon as possible.

Recent work on the Howard Hanson Dam has lowered the risk of catastrophic flooding in the valley. That's the good news," said Kreidler. "But the risk of flooding is still significantly higher than normal."

It's important to act quickly, he said. The insurance, sold by local agents and brokers as part of the National Flood Insurance Program, generally doesn't take effect until 30 days after a policy is written.

Also, FEMA is revising some of its flood maps in the area. In the Green River Valley, the new maps will likely broaden the areas considered high-risk zones. The new maps take effect in September 2010. But under NFIP's "grandfather rule," people in areas considered moderate- to low-risk zones can buy coverage now and lock in the lower rates, which will apply even after the new maps take effect. The average flood insurance policy from NFIP costs $540 per year.

According to the NFIP, as of Sept. 30, 21.4 percent of the structures in the Green River flood plain were insured through the federal program, which is the primary source of flood coverage for most homeowners and many businesses. Some 474 of the area's commercial structures and 2,542 homes are covered. Statewide, only 16.5 percent of at-risk structures have federal flood coverage.

One little-known aspect of the federal program is that it also offers coverage to renters. Residential premiums start as low as $39 a year for contents-only coverage.

"Renters shouldn't assume that their apartment owner's insurance will cover their losses, because it generally doesn't," said Kreidler. "A flooded apartment can easily lead to thousands of dollars in damages. Renters have to protect themselves, too.

Congress established the National Flood Insurance Program in 1968 to provide an insurance alternative to federal disaster assistance after major floods. The Federal Emergency Management Agency administers the NFIP, although the policies are sold and adjusted by thousands of private-sector insurance agents, brokers and adjusters.

The policies cover up to $250,000 for residential structures and $100,000 for contents. Businesses can buy up to $500,000 in coverage for a building and $500,000 for contents. And renters can buy up to $100,000 in coverage for their belongings.

Property owners needing more coverage than that, such as businesses, generally have to purchase “excess” coverage through a surplus lines insurance broker. These policies can be very hard to find now – and very expensive -- in the Green River Valley. And such policies often require the buyer to first have federal flood coverage.

Kreidler’s office is urging private insurers to keep selling policies in the area, and is seeking legislation that would allow his office to intervene when an insurance market dries up.

“We’re doing what we can under current law,” said Kreidler. “But I strongly – strongly – urge Green River Valley residents to get federal flood coverage.”

New domestic partnership law = new insurance rights

Washington state's new domestic partnership law goes into effect today, creating new insurance rights for nearly 13,000 people in our state.

For most insurance coverage, it's pretty straightforward; wherever your policy says "spouse" it must also cover state-registered domestic partners. But if you're partner hasn't been named on your policy you'll need to contact your insurance company directly to make sure they're covered.

Here's a list of commonly asked questions about the new law and insurance.

Health insurance is less cut and dry. If your employer self insures -- meaning they don't have a private insurance plan -- state laws don't apply. If you're not sure what type of health plan you have, we can help. Call us at 1-800-562-6900 and we'll help you sort it out.