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Walt Bernard Podgurski,  Editor,  440-773-1108, 

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Editorial Mission Statement: The goal of this publication is to provide readers a broad selection of what is being written about the insurance industry and related issues. Some articles may have a “tilt” towards a particular perspective one way or another. Inclusion in this newsletter is not an endorsement of any views or content; but report the various and differing views appearing in media.
Daily Insurance Report Tuesday, 03/21/18


Legislation to Lower Health Insurance Premiums in Individual Market by up to 40% Proposed for Omnibus Spending Bill
—Sens. Lamar Alexander and Susan Collins, Congressmen Greg Walden and Ryan Costello
Would help 9 million Americans who pay for their own insurance without government or employer subsidies
Would also help those who are below 250% of the poverty level who receive government assistance to help them pay for their deductibles and co-pays
“A self-employed plumber making $60,000 may be paying $20,000 for health insurance. Our proposal could cut up to $8,000 from that insurance bill.”
Washington, D.C. - Senate health committee Chairman Lamar Alexander (R-Tenn.), Senator Susan Collins (R-Maine), House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) and Representative Ryan Costello (R-Pa.) today proposed legislation that would lower individual health insurance premiums in the individual market up to 40% and said that it should be included in the Omnibus spending bill Congress will consider this week.
“Our recommendations are based upon Senate and House proposals developed in several bipartisan hearings and roundtable discussions,” the four lawmakers said. “According to independent experts, our proposal would reduce premiums in the individual market by up to 40 percent for farmers, songwriters, and small business men and women, and others who don’t receive insurance from the government or from their employer and who pay for insurance on their own. A self-employed plumber making $60,000 may be paying $20,000 for health insurance. Over time, our proposal could cut up to $8000 from that insurance bill.”
Preliminary projections from the Congressional Budget Office indicate that the proposal could be adopted without adding to the federal debt.
Health care experts at management consulting firm Oliver Wyman released an analysis this week comparing this proposal to what people in the individual market will pay if Congress doesn’t act. The analysis showed that this package would reduce premiums by up to 40 percent in the individual market for states that obtain a Section 1332 Affordable Care Act waiver and would provide insurance coverage to an additional 3.2 million individuals. The analysis also factored in increased flexibility for states that seek to use state innovation waivers and applies in the individual health insurance market on and off the exchange.
Background on the proposal:
Meaningful permanent flexibility for states in revised Section 1332 Affordable Care Act State Innovation Waivers.
3 years funding of invisible high risk pools/reinsurance at $10 billion per year, with a federal fallback in the first year. States could set up an invisible high-risk pool based on the Alaska/Maine model, a traditional reinsurance pool, a pool based on another state’s model, or something of their own design.
Authorizes new copper plans that will allow anyone to buy catastrophic coverage.
3 years funding of cost-sharing reduction subsidies. Helps those who are below 250% of the poverty level who receive government assistance to help them pay for their deductibles and co-pays.
Includes protections so that federal funding directly benefits Americans, not insurance companies.
Requires the HHS secretary to issue regulations allowing insurers to sell plans across state lines.
Does not change Affordable Care Act essential benefits requirements or guarantee of insurance for an individual with pre-existing conditions.
Includes the traditional Hyde protections that have applied to appropriations bills since 1976 and that apply to Medicaid, Medicare, Children’s Health Insurance Program, TRICARE, Indian Health Service, Federal Employees Health Benefits Program, Veterans Affairs, and the Labor-HHS appropriations bill. Clarifies that Hyde-exemptions and effect on non-federal funding remain the same.
Requires transparency for consumers purchasing short-term limited duration insurance. States

Life / Health / Employee Benefits

Statement from California Insurance Commissioner Dave Jones regarding today’s federal health insurance proposal from Republicans
SACRAMENTO, Calif. — "This federal health insurance proposal would deny women access to abortion coverage and it conflicts with California law which requires coverage for all essential health benefits. The Affordable Care Act does not, nor should any law, deny women with health insurance access to abortion coverage. The Congress should act to restore the cost-sharing reduction payments and provide reinsurance funding, but they should not interfere with women's access to reproductive health care services. The legislative proposal also could interfere with the state's ability to adequately regulate short-term insurance policies, which could then undermine the individual health insurance market."

Irony: Insurers now saying restoring Obamacare payments will disrupt market, cause sticker shock
by Philip Klein / Washington Examiner
Yet on Monday, the Robert Wood Johnson Foundation is out with a report, based on extensive interviews with 10 leading Obamacare insurers, which notes that "Several insurers were concerned about proposed federal legislation to restore CSR funding," warning that it "could result in significant disruption and sticker shock for consumers receiving premium tax credits."
The report quotes one representative as saying restoring the funding “is not helpful at all."
Wait, what? How is it possible that just a few months after we were warned of total meltdown in the insurance market due to Trump's cutting off of the payments, some insurers are now predicting sticker shock and disruption if those same payments are restored?
Though the report notes that insurers did find Trump's move extremely disruptive at the time, particularly as it was announced weeks before the start of open enrollment, they also talked about how they were able to work with state commissioners to respond to the problem.
What happened was that state regulators allowed insurers to concentrate their premium hikes among mid-level "silver" plans, which are used to calculate Obamacare's core subsides for individuals to purchase insurance. That enabled qualifying individuals to receive much higher federal subsidies, creating situations in which they were effectively able to purchase "gold" plans for the price of silver plans, or to obtain "bronze" plans at no cost to them.
According to the report, some insurers now say "many consumers are now 'getting a good deal,' thanks to higher premium tax credits, and that restoring CSRs would cause considerable confusion during the 2019 open enrollment season and lead to sticker shock for consumers who had switched to gold- or bronze-level plans this year."

Column: Don’t revive the individual mandate
Sally C. Pipes / The Detroit News
Tax reform repealed Obamacare’s least popular provision, the individual mandate, starting in 2019. Now, at least nine states want to revive the mandate, which required all Americans to purchase health insurance or pay a fine.
Obamacare’s proponents claim that state-level individual mandates would compel young and healthy people to buy coverage through the exchanges. This, they say, would ensure a healthy risk pool and prevent insurers from leaving the exchanges or drastically hiking premiums.
Their assertions are divorced from reality. The last four years of Obamacare have proven that even a government directive won’t compel people to buy insurance they can’t afford. Reinstating the mandate at the state level would penalize lower-income Americans without stabilizing the insurance market.

Corestream Teams Up with ADP to Deliver Best-in-Class Employee Benefits Platform
Partnership to extend voluntary benefits to thousands of employees nationwide without the implementation and administration nightmare for businesses
NEW YORK--(BUSINESS WIRE)--Corestream, the leading platform for connecting employees with voluntary benefits, today announced a partnership with ADP Benefits, a global provider of personalized benefits services, that will bring additional options for benefits customization to hundreds of businesses nationwide. ADP selected Corestream because of its proven track record in the benefits marketplace with a series of Fortune 500 companies.
“We’re thrilled to partner with ADP to bring companies, employees, carriers, brokers, and benefits together through a single point of integration with one platform, minus the administrative nightmare.”
Voluntary benefits are elective add-ons that businesses offer their employees to complement existing traditional offerings, such as supplemental health benefits, lifestyle benefits, employee discounts, and auto insurance quoting. Corestream currently manages voluntary benefit deductions for 1.2 million employees. Benefits are paramount to retaining and attracting top talent: according to a recent study, 90 percent of 18 to 34-year-olds (millennials) say they would prefer benefits over a pay raise.1

58% of healthcare breaches involve insiders Luke Irwin March 19, 2018
Luke Irwin / IT Governance USA
Employees in the health care sector are inundated with personal data – from admission forms to medical histories and Social Security numbers – so it’s no surprise that insiders are a major information security threat. Verizon’s Protected Health Information Data Breach Report claims that insiders were responsible for 782 healthcare breaches between 2016 and 2017.
This equates to 58% of all health care breaches, making the sector the only industry in which insiders are the biggest cybersecurity threat.
Why is this such a big problem?
The health care sector is particularly vulnerable to insider threats because of how easily employees can access sensitive data. In most other industries, records are kept where only those who need them can access them. However, any number of hospital staff need access to patients’ records, which means wrongdoers don’t need to hack systems or exploit a vulnerability to view people’s records, and they don’t need to worry about leaving any evidence. The only thing that’s stopping them from breaching personal data is their own moral imperative.
So, what tempts people to breach personal data? The most commonly cited reason was financial gain (48%). Health care data includes a lot of information, which criminals could use to commit tax fraud or open lines of credit. People are also motivated by “fun/curiosity” (31%), which typically entails employees searching for records pertaining to celebrities or people they know.

Pairing retirement with health benefits for a one-two punch
By Elizabeth Galentine / Employee Benefit Advisers
As an investment advisor at Miracle Mile Advisors, Josh Sailar manages $51.4 million of high net-worth client assets. But something else that sets this 28-year-old apart is that he also develops employee benefit plans for most of his business-owner clients.
Although 80% to 90% of Miracle Mile’s business comes from retirement plans, Sailar says the Los Angeles-based firm also considers its clients’ overall employee benefit needs. With many small businesses strapped for resources yet wanting to offer both health and retirement benefits, “a lot of business owners will take this ‘Frankenstein’ approach, where they just sort of throw parts together.” But absent a more deliberate approach to designing a benefit plan, what they come up with, he says, is usually sub-optimal and often unworkable, which costs them financially.
So Sailar steps in and works typically with the business owner, CEO or CFO to design a plan that suits the company’s needs. That not only ingratiates him with the client, it opens the door to other business opportunities as well.

You’ve Heard of Single-Payer. What about All-Payer Health Care?
BU’s Austin Frakt talks about a different way to control runaway prices
By Rich Barlow / BU Today (Boston University)
Austin Frakt
Making hospitals charge every insurer the same price could help restrain high health costs, Austin Frakt says. Photo by Cydney Scott
SPH’s Austin Frakt says all-payer care could control American health care costs
States could make hospitals charge all insurers the same prices
A tough sell, but more acceptable than single-payer government insurance
If you want to buy milk, Austin Frakt says, you could check prices at Shaw’s and Costco. Gas? Compare different stations’ prices at the pump. In both cases, the sellers charge every buyer the same price, allowing buyers to look for the best deals.
Not so with medicine, says Frakt, a School of Public Health associate professor of health law, policy, and management. Hospitals negotiate different prices with different insurance plans for their services, making price comparisons difficult, if not impossible. That, he says, is one of many reasons that US per capita health spending is among the highest in the world.
Some health-care experts advocate moving the United States to a single-payer system—made famous by Bernie Sanders’ presidential campaign—where the government pays all health bills, and consequently has the clout to set prices from hospitals and other providers. Frakt offers another, less often considered, possibility. It’s called all-payer care, and it would require hospitals to charge the same price for each service to every payer, forcing them to compete with other hospitals on price.

How To Protect Your Most Important Asset With Disability Insurance
Peter Lazaroff , CONTRIBUTOR / Forbes
Five years ago when my wife and I were expecting our first child, I was quick to get term life insurance policies in place. It wasn’t until last month, however, that I protected my human capital from disability.
I’m not alone, either. Most people see life insurance as a no-brainer to protect against losing their income due to death, but few people consider protecting their human capital in the event they become sick or injured.
But I’m actually far more likely to become disabled in my working career than I am to die – and so are you.
In fact, the Social Security Administration estimates that 91.2% of women and 85.6% of men will live to age 67. Meanwhile, the same report projects that a 20-year-old has a 26.8% chance of meeting being disabled for at least 12 months before reaching retirement at age 67.
Once you become disabled, the Council for Disability Awareness reports that the average long-term disability absence lasts 34.6 months – nearly three years!
In other words, our chances of enduring a period of time in which we’re disabled and unable to work is much more likely than the chances of us dying outright. And when you’re in the early or middle stages of your career, there are few (if any) assets more valuable than your ability to earn an income.

Other Insurance News

Cannabis Farmer Gets over $1 Million Insurance Payout
Thomas Fire Ash Destroys Crop
by KELSEY BRUGGER / Santa Barbara Independent
One Carpinteria farmer won an insurance payout well in excess of $1 million after ashes from the Thomas Fire destroyed thousands of his plants. What was unusual was that the plants were marijuana.
As cannabis cultivators come out of the shadows, pot businesses are starting to operate like any other business — they have lawyers, accountants, bankers, and, more recently, insurance brokers.
Most of the Northern California cannabis farms scorched by last fall’s wildfires did not have insurance. They were forced to suffer huge losses. But now insurance brokers in Santa Barbara County are starting to tap into the once-illicit industry.
“A lot of this wasn’t insurable,” said Matt Porter, a vice president at Brown & Brown Insurance, one of the largest firms in the world, with offices in Goleta. But in the last several months Porter and his colleagues have won over area cannabis operators. They now have about 20 clients in Carpinteria and Lompoc, he said. They are expected to get up to $8 million in insurance claim payments for their Carpinteria clients.

Blackstone Hires Michael McRaith, Former Director of the U.S. Treasury’s Federal Insurance Office, as Managing Director in Blackstone Insurance Solutions
New York, March 19, 2018 – Blackstone (NYSE:BX) today announced that Michael McRaith, former Director of the U.S. Department of the Treasury’s Federal Insurance Office (FIO), will join the firm as a Managing Director for Blackstone Insurance Solutions (BIS). BIS is a newly formed business delivering Blackstone’s investment management expertise and innovative products to insurers, helping those firms meet long-term policyholder obligations and drive shareholder value. BIS partners with insurers to create customized and diversified portfolios across asset classes, and also offers full management of insurers’ investment portfolios.
Today’s appointment follows Blackstone’s hiring in January of Chris Blunt, former President of New York Life’s Investments Group, as a Senior Managing Director and Chief Executive Officer of BIS. McRaith will serve on the BIS senior management team, reporting to Mr. Blunt. BIS expects to make several additional key hires in the coming weeks and months as BIS continues to grow.

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