Morning news roundup

Here in Washington, Crosscut writes about the situation in Green River Valley, where the Army Corps of Engineers may have to spill more water than usual from the Howard Hanson dam, increasing the probability of flooding downstream. Homeowners and businesses are scrambling to find coverage, and businesses in particular are finding it hard to find major coverage. (We also have a few suggestions.)
Good -- and comprehensive -- primer on the health care debate in the NY Times this morning. Also from the Times:

• Will Health-Care Reform Encourage Small Businesses to Drop Health Coverage?
• and 17 Held in Protest Outside Health Insurer's Office

In U.S. News & World Report: States May Face Huge Bills Without Healthcare Reform

In the Philadelphia Inquirer has a story about Realpoint joining the ranks of traditional rating agencies (like Standard & Poors, etc.) approved by the SEC, Federal Reserve and National Association of Insurance Commissioners.

Regulators denounce “scare tactics” by insurers re: health care reform

Insurance regulators are denouncing recent “scare tactics” by insurers apparently trying to alarm senior citizens about the effect of federal health-insurance reform on Medicare.

“State insurance regulators take scare tactics directed at senior citizens very seriously,” the National Association for Insurance Commissioners recently wrote to Senate Finance Committee chairman Max Baucus and ranking member Charles Grassley.

In the letter, insurance commissioners Roger A. Sevigny (NH) and Sandy Praeger (Kansas) urge Congress to restore state insurance regulatory authority over Medicare private plans. They cite “deplorable marketing and sales abuses…we have witnessed firsthand” in the Medicare Advantage marketplace.

The letter comes after the federal Centers for Medicare and Medicaid Services (CMS) criticized a letter sent by insurer Humana, Inc. to enrollees. In it, the insurer says that “millions of seniors and disabled individuals could lose many…important benefits and services” under federal health care reform. The letter urges enrollees to contact Congress.

CMS called the information “misleading and confusing” and said it may violate federal Medicare regulations. It ordered Humana to stop sending such letters.

Sen. Baucus also blasted the move, calling the letter “wholly unacceptable” and saying that his bill “strengthens Medicare and does not cut benefits covered under the Medicare program.”

Businesses in S. King County scrambling to find coverage, but with worries about dam, it's hard to find

As the Seattle Times reported this morning, the chorus of officials urging people to buy flood coverage if they live below Howard Hanson dam has had a predictable-if-unfortunate effect: scaring insurers out of the market.

The Army Corps of Engineers has said that a weakened abutment on one side of the dam may force the corps to spill more water than usual to protect the weakened dam during the rainy season. (The dam itself is not believed to be at any risk for failure.) For homeowners and businesses in parts of the Green River Valley, that means a significantly higher risk of flooding.

What to do? First, contact an agent to get flood coverage under the National Flood Insurance Program, a federal plan with policies written by private insurers. And do it now. The coverage doesn't take effect until 30 days after the policy is written, and flood season starts Nov. 1.

As the Times noted, however, the situation is pretty bleak for many of the businesses downstream from the dam. The federal flood coverage only covers up to $500,000 for the building and $500,000 for contents. In the industry-heavy valley, some of the machinery alone could be worth more than that.

At this point -- with the fall rains starting -- the best option for businesses is to talk to their agents and brokers about finding "surplus lines" or "excess" coverage. This is a sector of the market that our office does not regulate. It will be hard to find coverage, and it now may be very expensive. One broker our office talked to yesterday saw a quote mushroom from $30,000 to $150,000. And a big complication is the fact that government flood-risk maps have apparently not yet been updated to account for the potential increased spillage from the dam. Worse, many non-government flood policies exclude a loss caused by an act of government.

There's one bit of good news. If you can find (and afford) the extra flood coverage, the policies typically do not have a 30-day waiting period like the federal coverage does.

But there's no avoiding the fact that it's a very tough situation for property owners below the dam. We cannot force insurers to cover a known risk. One surplus lines official I spoke to this morning compared the situation to someone standing beside a haystack with a match and asking if anyone wanted to write hay coverage. While that may be an exaggeration -- the risk of flooding below the dam is believed to be less than one in three -- it's clear that insurers are skittish about writing new policies in the area now.

Also, home- and business owners should try to mitigate the threat. Move key documents and computer equipment upstairs, if possible. If it's practical to raise machinery on a platform, consider that. And make contingency plans for how to keep the business running.

Also, King County is reportedly developing plans to try to steer floodwaters into parking lots, ballfields and agricultural land where possible, using a series of temporary levees.

A radio reporter asked me this morning if it was a mistake for Corps, state and local officials to repeatedly urge Green River Valley residents to buy flood coverage, seeing as how the insurance market has reacted. But given the alternative -- trying to hush up the risk for fear of spooking the market -- disclosure clearly seems like the best course. And some insurers were aware of the risk months ago. Mutual of Enumclaw, for example, sent out letters in mid-March urging its homeowners' policy holders to look into federal flood coverage.

WA insurance commissioner re: weakened King County dam: Buy flood coverage now

With fall rainy season fast approaching in the Pacific Northwest, Washington state Insurance Commissioner Mike Kreidler is urging insurers to get the word out about flood coverage for homeowners downstream from a weakened dam.

State and local officials are concerned about the Howard Hanson Dam, where a weakened abutment may require the Army Corps of Engineers to release more water than usual. The dam itself is not believed to be at risk for failure, but the need to keep the pool behind the dam low heightens the risk of flooding downstream in the heavily developed Green River Valley. That includes parts of the Washington cities Auburn, Kent, Renton and Tukwila.

"If there's any good news in all of this, it's that we still have time to take measures to prevent and mitigate problems before the storms hit," Kreidler said in the letter. He said "every homeowner in the Green River Valley should have this important coverage."

He wants them to tell their customers in the area about the National Flood Insurance Program. (That federal site includes a "one-step flood risk profile" in which you can type in your address and instantly see the property's flood risk, examples of premiums, and a list of local agents participating in the program.)

Kreidler said that flood insurance doesn't take effect until 30 days after a policy is written. With the flood season beginning Nov. 1, he said, it's critical for people to act quickly.

For homeowners, Kreidler's also recommending:
-considering installing a sewer backflow valve to prevent sewer drain lines from backing up into the house,
-documenting home contents with photos or a video,
-moving important papers upstairs, and ideally making copies and storing those off-site,
-and planning for evacuation, including an easily portable cache of medicine, food, flashlight, key papers, radio, toiletries and pet- and baby supplies.

California and Missouri companies ordered to stop selling unauthorized insurance in WA

The Washington state Office of the Insurance Commissioner today ordered companies in California and Missouri to immediately stop selling unauthorized insurance in Washington state.

Claims & Benefit Management, of Chino, Calif. and the Association for Lifestyle Reform, a Missouri corporation, were ordered "to immediately cease and desist" from:

-Engaging in unauthorized insurance business in Washington, including collecting premiums and advertising,
-and soliciting insurance business in the state.

The order, issued Tuesday, also included Brad Wessler, a California resident who owns both companies. Wessler was also named in similar orders last year in Utah and in Colorado.

Investigators at the Washington state Office of the Insurance Commissioner found that the companies were selling insurance and medical care discount cards in the state. Neither the companies nor Wessler were authorized to act as an insurer or health care service contractor in Washington.

The companies, according to the order, are believed to have used misleading "fax blasts" of unsolicited faxes touting "affordable health care" and $10 doctor visits. The company is also believed to have required customers to provide bank account or credit card information for automatic withdrawals "and then refused or delayed making refunds" when consumers complained.

Tuesday's cease-and-desist order also orders Wessler and his companies to provide a list of all Washington customers and to report any premiums paid.
The companies must also notify all Washington customers of the order and, upon the insured person's request, replace any unauthorized insurance with coverage issued by an authorized insurer.

The cease-and-desist order is posted on the insurance commissioner's website.

Which insurers trigger the most complaints?

Or the least?

Washington's state insurance commissioner's office has built an online tool that allows you to easily compare complaint rates by insurer.

The results include a "complaint index," which compares the number of complaints to the  company's market share. You can also compare the complaint rate based on the total premiums charged here in Washington. The data's broken down by insurance type: auto, homeowners and health. We've got four years' worth of data built into the site (calendar years 2005-2008), so you can also look at who's improving or getting worse.

Inevitably, of course, there's a caveat: Be sure to also look at the total number of complaints. For insurers with a very small number of policies here, even a single can push the complaint index quite high.

Click here to go to the "Complaint Comparison Tool."

Insurance mandates: Would relaxing the number of required health-insurance benefits make coverage dramatically cheaper?

Probably not, according to Washington state's top insurance official. A Q&A published this weekend by The (Vancouver) Columbian includes this exchange:

Some Republican legislators argue that the mandates the state imposes on insurance companies drive many companies away. Does Washington impose an unusually high number of mandates compared with other states?
Kreidler: That depends on how you define mandates. If you look at the ones that cover specific benefits such as cancer screenings, I think our number is fairly consistent with what you see in most states.
We don't allow insurance companies to effectively determine your premium by your health status. Medical underwriting is prohibited for insurers in the small-group market and the individual market. My guess is, the insurance companies consider that a mandate.
If Washington eliminated all the mandates, how much would it save?
Kreidler: The best estimates are about 3 percent.

Washington state mandates 14 health benefits (like diabetes coverage, colorectal cancer exams, mental health parity and mammograms), 10 mandates related to access for specific types of providers (chiropractic care, podiatrists, psychological services) and several coverage requirements (like coverage for dependent children). Insurers must also offer -- although employers don't have to buy -- coverage for things like hospice care and temporomandibular joint disorder.

There are also 11 federal mandates, some of which overlap with Washington's state requirements.

Click here for a detailed description of these mandates and what they mean.

Kreidler on health-insurance reform: "We cannot afford to fail again"

Washington state Insurance Commissioner Mike Kreidler, in an op-ed piece in today's Seattle Times, writes:

Every day, desperate people seek help from my office.

One woman lost her job and health coverage, only to discover her husband needed a critical operation. Another couple, both 62, struggle to pay $1,400 a month. And a retired couple is trying to help their uninsured son — a heart-transplant recipient — pay $2,000 a month for medication.
Good, affordable health insurance eludes more and more of us. Many people are only one accident or serious illness away from bankruptcy. And even many of those with good coverage know it may not be there tomorrow. Across the country, this anxiety hangs over workers' and families' heads.
I had a front-row seat during the last major attempt at reform. Sixteen years ago, I was a congressman on a key House health subcommittee. We failed then. We cannot afford to fail again.

Cease-and-desist order issued in bogus insurance case

The Washington state insurance commissioner's office has ordered a former insurance agent to immediately stop selling what are apparently fake insurance policies.

Brenda L. MacLaren-Beattie and The MacLaren Group have been told to immediately cease and desist from:

-transacting the unauthorized business of insurance in Washington,

-acting or holding herself out to be a Washington insurance agent or broker,

-trying to sell Washingtonians any product requiring an insurance license.

MacLaren-Beattie had an insurance agent’s license in Washington until March 12, 2009. She had been licensed in this state since Aug. 25, 1997. The license has expired and will not be renewed due to MacLaren-Beattie’s admitted acceptance of premium payments without actually obtaining the insurance.

The state's Office of the Insurance Commissioner is investigating eight such complaints against MacLaren-Beattie. All are from dentists or oral surgeons who thought they had purchased business coverage from her.

Our office, which served a search warrant Tuesday on MacLaren-Beattie’s office in Des Moines, is investigating. We are also notifying businesses whom we believe to have been victims.

Note: The company named in the order, The MacLaren Group, is NOT related to companies by the same name in Canada and the United Kingdom. MacLaren-Beattie’s company is headquartered in her home in Des Moines, Wash.

A copy of the order is posted here.

Small business insurance tips, from startup in-home daycares to established businesses

Own a small business? Starting one? The Washington state Office of the Insurance Commissioner has come up with a list of tips: what to think about, look for, and beware when shopping for insurance to protect your business.

The advice is geared toward a range of businesses, from someone running a child care business out of their home to larger businesses worried about data theft, vehicle fleets and supplier interruptions. And we start with the basics, like how to choose a good agent or broker. If you've got follow-up questions, we've got a toll-free hotline that doesn't send you to some endless phone tree and recordings. It's staffed, live, by real people who are experts at handling insurance questions.

And remember: We're not trying to sell you anything. We're not insurers, or part of the insurance industry. We're the Washington state government agency that regulates, licenses and disciplines agents, brokers and insurers, as well as those selling insurance illegally.

Click here for the agency's "Small Business Insurance 101" tips.

State officials urge insurers to prepare for swine flu

Washington state insurance and health officials are urging health insurers to ensure that as many state residents as possible have access to H1N1 (swine flu) vaccine and treatment.

"So far, this flu has proven less virulent than initially feared," said Washington Insurance Commissioner Mike Kreidler. "But we want insurers to be fully prepared for what looks to be a challenging flu season."

The H1N1 vaccine is expected to be available in October, with children and pregnant women among the first to recieve it, Washington Secretary of Health Mary Selecky said.

H1N1 influenza A first hit Washington state last spring. About 160 people in the state have been hospitalized so far, and 14 have died from the virus.

In a letter sent out to insurers this week, Kreidler and Selecky ask insurers to do several things:

-optimize coverage for both the swine flu and regular seasonal flu vaccine, including quickly paying health-care providers and reimbursing claims.
-tell people they cover where and how to get vaccinated.
-augment drug coverage to ensure access to the flu-fighting drugs Tamiflu and Relenza.

The Washington state letter is similar to one sent out recently by Kansas insurance and health officials, who urged similar steps.

Health care rally in Seattle reportedly draws thousands...

Washington state political blogger David Goldstein reports that 3,000 people showed up Thursday in Seattle's Westlake Park to call for "strong pro-health care reform."

Goldstein's post also links to this YouTube video with excerpts from the event.

Insurance tips for small business

Almost anyone starting a business quickly discovers that they're adrift in a sea of paperwork. You have to register the company, perhaps form an LLC, keep the books, pay taxes, handle employee documents, and much more.

Like it or not, insurance is an important part of that list. To get started, here are some business insurance tips, from the Washington State insurance commissioner's office:

• Understand the risks to your business. How would a severe storm affect you? Records theft? An accident involving a delivery truck? Supplier disruptions? Insurance lets you transfer risk to an insurer in exchange for paying a premium.
• Choose an agent or broker. What's the difference? Agents represent one or more insurers. The companies pay them a sales commission. Brokers, on the other hand, typically charge a fee to represent you in the marketplace.

          How to choose? First, talk to other small business owners about their experiences with insurers. Then interview several agents or brokers. Compare the costs of equivalent coverage. And ask how premiums have increased over the past five years.

          Whomever you pick, it's very important that he or she act as your representative to the insurance company. They should understand your business as well as insurers' claims- and rating processes.

          Also:

• If you offer health coverage to workers, take advantage of the tax benefits to your company. Businesses can generally deduct 100 percent of the premiums they pay to qualifying health plans. Also, consider joining an association to get a group rate on coverage for your employees.

Want more specifics?

-Here's a look at buying and coverage options. If you have a daycare, do you need commercial coverage, or can you add coverage to your homeowners' policy? Click here for more on topics like that.

-And here's a small-business-oriented site set up by the National Association of Insurance Commissioners, which represents the state officials who regulate insurance companies.