News & Events
Profax 5/3/2010 - 5/5/2010
COST SHIFTING—WHO GETS SHAFTED? If I can get you to pay my bill, I am happy! But if I have to pay your bill too, I am
mad! That’s what cost shifting is. It has been rampant for generations and appears to ratchet up even worse. For example, a
recent study found that hospitals have driven up auto insurer’s costs by more than $1 billion for accident victims that
normally would be paid by Medicare or Medicaid. Because Medicare and Medicaid reimbursements are less than private
sector health, auto, no-fault, homeowners and other insurances, the health care providers shaft the private sector. BI, PIP,
Med Pay and W/C don’t have coinsurance, deductibles, procedure caps etc. that health policies have which is a “sweet deal”
for the health care providers. Some health care providers would have an auto policy pay for “pregnancy tests” and “child
birthing” if they could get away with it. It is only projected to get worse with opportunities provided by the Obama health
care proposals. While it might take years to write the rules, one thing is for certain: private sector medical coverages on
homeowners, farmowners, businessowners, and auto will face a continued threat from “shifting”.
HERE WE GO AGAIN! What now? More threats to state regulation of insurance via the new Health Bill. Fearing health
insurance rate hikes in the next few years before Obamacare kicks in, the Senate has introduced legislation that would give
the HHS Secretary [Kathleen Sebelius] power to review and regulate state health premiums. This federal preemption has the
possibility of creating massive under-priced health policies around the country. Health companies will become insolvent
and/or leave the marketplace in affected states. This mirrors what happened in the property marketplace in New Jersey,
Florida, California and other states several years ago. The Federal CBO has now scored the estimated premium increase for
health coverage whether it be private sector or federal sector to be double [100%] in the next 5-8 years PLUS 15% Medicare
and Seniors coverage. The youngest and healthiest policyholders are predicted to see a 300% increase in the next 10 years
[100% increase PLUS another 75-100% increase] due to the new health bill.
JOINT LEGISLATIVE MEETING ON HEALTH CARE: A joint North Dakota House and Senate IBL committee heard testimony for
9 hours last Wednesday in Bismarck regarding the implementation of the new Health Care Bill. Things are moving fast in
some areas but will take 4-5 years to implement in other areas. Testimony was given by many professionals including
Canadian health care experts, doctors, BC/BS, ND Hospital Association, ND Medical Association, ND Insurance Department,
Human Service Department and Health Department. Here are a couple facts from the hearings. Because the North Dakota
Legislature only meets every two years, the upcoming 2011 session WILL have to address budget costs, implementation
procedures and enabling legislation. Cost estimates to North Dakota were between $22.2 million for 2011-2013 plus another
$47.9 million for 2014-2019. These are added costs to the STATE for its employees, including legislators, higher ed, and all
the department employees. Interesting testimony was presented by Committee Chair George Keiser that the latest study of
the uninsured in North Dakota reveals about 7% or 45,000 residents are without health care coverage. Of this group about
15,000 [1/3] are young and healthy college students, young workers and young families. Some may even still be covered on
their parents’ policies but were counted in the uninsured column. Another 15,000 [1/3] of the uninsured were Medicare
eligible but not enrolled because they were still working and covered under an employer plan or their spouse was working
and they were covered under their spouse’s plan or they simply did not enroll for Medicare. This leaves a mere 15,000 truly
uninsured or about 1.8---2%. The question begs, “What will it cost North Dakotans to bring these uninsured in the health care
system”? Will the ND Legislature have to address just the uninsured or everybody? EVERYBODY is the answer. Everybody is
included in the mandate including farm employees, part-time, seasonal; there is only ONE exception—Native Americans.
STATE AUTO REACHES ‘MILLION-BILLION’ MILESTONE: The State Auto Insurance Group, headquartered in Columbus, OH has
reached a significant milestone in its sales of personal lines insurance: one million policies and one billion in premium. In its
first year of operation in 1921, the company had written $18,005.30 in auto insurance premium—then its only line of
business. Today, the State Auto Group exceeds $1.5 billion in premium including auto, home, business and specialty lines.
PROFESSIONAL OPPORTUNITY: Immediate position as a licensed Insurance Agent in Minot. If you have good written,
verbal and computer skills and good attention to details with the ability to multi-task, this position is for you. This
position offers competitive compensation and an excellent benefit package including 401(k). For consideration,
applicants should submit a cover letter and resume to First Western Insurance, Attn: Gary Lybeck, PO Box 320, Minot,
ND 58702-0320.
