Sunday, October 7, 2012

Commissioner's Message to Concerned Texas Insurance Consumers

August 6, 2012

Commissioner's Message to Concerned Texas Insurance Consumers

On July 13, a number of concerned Texas consumers sent an email to Commissioner Kitzman suggesting several potential solutions to the challenges facing the Texas insurance market. Commissioner Kitzman reviewed the suggestions with her staff, and on August 6, she sent the following message to the consumers.


Dear Concerned Texas Insurance Consumers,

Thank you for your email of July 13, 2012. I, too, am interested in commonsense, market-based solutions that could provide immediate relief for homeowners in the form of lower insurance premiums and TDI continually seeks to identify and/or develop effective approaches to this challenging issue. With respect to your specific proposals:

1. Empower consumers to generate real price competition by requiring carriers to offer a standard policy, allowing consumers to make meaningful apples-to-apples comparisons.

I wholeheartedly support enabling consumers to better understand what they are purchasing. When I joined TDI almost a year ago, I noted that while our website contained a lot of information, much of it was hyper-technical, legalistic, jargon-heavy or otherwise difficult to understand. One of my major initiatives has been to provide better, more useful, meaningful and intelligible information to consumers so that they can make informed decisions. We are currently developing an interactive educational tool to assist consumers in understanding common homeowners policy coverages and features. Of course, these coverages and features can vary from company to company. Our tool will include a comparison of the top five homeowners insurers’ policy forms to the “standard” coverages and features. It is important that consumers obtain company specific information and explanation from the company or the company’s agent prior to completing the purchase. This type of service is one of the primary functions of an insurance agent.

We have conducted a survey of other states and have found no state that requires insurers to offer a standardized policy form, so we are unable to determine whether this practice would lead to lower insurance premiums. Despite the absence of a standardized policy form, our review of policy form filings indicates that most policy terms, conditions, coverages, and features are substantially similar. As mentioned above, our interactive educational tool will identify the more common variations.

TDI does not have the authority to require insurers to offer a particular policy form without legislative action.

2. Stop insurance companies from shifting more of the burden onto consumers by continually raising deductibles.

Except for the coastal area, Texas has a very competitive homeowners insurance market in terms of the number of insurers actively writing policies, many of which offer lower deductibles. Some consumers choose higher deductibles in order to receive a lower premium. Robert Hunter, former Texas Insurance Commissioner and current Director of Insurance for the Consumer Federation of America, has stated that “[consumers] should be happy their deductible is higher as long as the premium goes down” (Washington Post, October 21, 2011). TDI reviews the effect of deductible changes on premiums to ensure that appropriate offsets are made. TDI believes consumers are best served when they have a variety of insurance products and options from which to select based on their personal circumstances. TDI does not have the authority to prohibit higher deductibles without legislative action.


3. Make the market more transparent for consumers by requiring insurance companies to clearly state what is and is not covered, disclose the true dollar-amount of deductibles, and provide easy access to review the current policy and endorsements in effect.

Insurance policies are legal documents and the policy language ultimately controls what is covered and what is not covered. An insurance agent can be very helpful in assisting consumers in understanding coverage provisions and determining what is best for their individuals needs. Additionally, the interactive tool referred to above will include illustrations of various coverage scenarios, including common misperceptions.

I agree that a stated dollar amount deductible is more easily understood than a percentage, and we were already planning to initiate rule-making to require that this information be displayed on the policy declarations page.

The Office of Public Insurance Counsel (OPIC) provides information on each insurers’ policy forms and endorsements.
(http://www.opic.state.tx.us/policy-comparisons/homeowners-2?view=opic&insurancetype=2/) What we do not have at this time, however, is a comprehensive picture of which policy forms are actually being marketed and sold by each insurer. TDI is exploring possible changes to the Texas Statistical Plan for Residential Risks to better reflect the current market.

4. Standardize insurance rate filings so that carriers are required to give all relevant information and justifications for rate hikes with their initial filing.

Article 2251.101 of the Texas Insurance Code requires insurers to file all rates, applicable rating manuals, supplementary rating information, and additional information as required by the Commissioner. While TDI has not had any problems obtaining all the information necessary to review rate filings to ensure that rates are compliant with the law, we are working on making this process more efficient and consistent. Earlier this year, I instructed TDI actuaries to develop rate filing templates that insurers can use to provide information in a standardized format. Drafts of these templates were made available online in May of this year. There will be a stakeholder meeting later this month to solicit feedback on these templates. In addition, TDI will be making changes later this year to its administrative rule regarding rate filing requirements that should provide more specificity to the information that insurers need to submit in their rate filings

5. End exotic off-shore reinsurance arrangements that allow insurance companies to pad their profits.

Off-shore reinsurance is the only catastrophe reinsurance available at this time. Without reinsurance, insurers would be required to hold more capital for the policies they write, which could lead to higher premiums. TDI reviews the reinsurance component of all rate filings to ensure that they are justified. When outliers are noted, additional information is requested and reviewed.

6. Rein in excessive underwriting profits and administrative costs from insurance companies.

Texas’ actual underwriting profit results have varied greatly over time, depending mostly on the existence or absence of catastrophic weather events. As the chart below illustrates, residential property insurers in Texas have not made underwriting profits, on average, for the last 20 years. In fact, their average loss has been over 9%. Acquisition costs are the only component of administrative costs that are broken out separately and Texas appears to have higher acquisition costs than most other states. TDI is researching this matter further.

Texas Homeowners Insurance Company Underwriting Profits, 1992-2011



7. Require insurance carriers to rely on legitimate long-term loss experience when estimating weather-related risks. One bad storm does not justify a steep rate hike.

Homeowners’ rates should reflect a long-term view of catastrophic events. TDI reviews all rate filings specifically to ensure that insurers are not using loss experience from a single event to justify a rate increase going forward. Additionally, Section 551.107 of the Texas Insurance Code prohibits insurers from using weather-related claims to surcharge policyholders.

8. Closely review the entire market to ensure current rates are justified.

TDI reviews all rate filings for compliance with the Texas Insurance Code, which provides that rates may not be excessive, inadequate, unreasonable or unfairly discriminatory for the risks to which the rates apply. In addition to TDI’s review, OPIC and other interested parties may obtain a copy of a filing, request additional information from the insurer and/or request a hearing.



I hope the information provided above gives you greater insight into the challenges of the Texas homeowners insurance market. I believe many of your ideas have merit and we will be moving forward as outlined above. I appreciate your interest and thank you for writing me.

Best Wishes,



Eleanor Kitzman

Commissioner of Insurance



For more information contact: PIO@tdi.state.tx.us

Texas Department of Insurance
Working Meeting – TLTA Informal Rate Proposal


October 10, 2012 – 9:30 a.m.
In Room 225, Tower 2, Hobby Building



Purpose:
TDI will hold an informal public meeting to discuss and receive stakeholder input on the Texas Land Title Association’s informal rate proposal for title insurance premium rates.

Background:
TLTA provided TDI with an informal draft rate proposal on September 13, 2012. To streamline the rate-setting process and to promote transparency, TDI, TLTA, and the Office of Public Insurance Counsel would like to work on the informal rate proposal with interested stakeholders. We invite the public to attend and participate in the working meetings. We request that meeting attendees limit their discussion to the posted matter.
If you wish to make written comments, please email them to marianne.baker@tdi.state.tx.us by October 8, 2012.

Agenda:
I. Welcome and Antitrust Statement

II. Discussion / Comments

III. Wrap-Up

Contact:
Texas Department of Insurance
Property and Casualty Section
Personal and Commercial Lines Office
Marianne Baker
333 Guadalupe St.
Austin, TX 78701
Phone: 512-322-2267
Fax: 512-490-1014
Email: marianne.baker@tdi.state.tx.us.

Link to TLTA Briefing Book

For more information contact: Title@tdi.state.tx.us

Last updated: 10/03/2012

Federal Health Care Reform Resource Page

Subscribe to Federal Health Care Reform Resource Page via eNews.
Click on the E-mail Page Link icon on the top right to share this page with your friends, family, and colleagues.
(En Español)
President Obama signed the Patient Protection and Affordable Care Act of 2009 -- the federal health care reform bill -- into law on March 23, 2010. The purpose of the law is to provide accessible health care coverage for an estimated 32 million Americans who are currently uninsured, and help people who already have health insurance retain their coverage.

Some of the law's provisions were effective in 2010, while others will be phased in through 2020. Lawmakers and federal and state regulators are working to adopt the laws and rules necessary to implement health care reform. Please visit this site regularly to check for updates and new information.
Federal Resources | State Resources | Who Will See Changes and When | Frequently Asked Questions | TDI Resources | Contact TDI | File an Insurance Complaint | Prevent Insurance Fraud

Federal Resources

(Please note, you will leave the TDI website by clicking on these links.)
Note: For additional information about Texas insurance options, please visit www.TexasHealthOptions.com . Some companies licensed to write health insurance in Texas may not be listed on HealthCare.gov. To verify if a company is licensed in Texas, check TDI's Company Lookup.

State Resources

Who Will See Changes and When

The information below shows the federal health care reform implementation date and particular groups impacted. Please be certain to read all the information, including the FAQs, for federal health care reform changes in the coming years.

2013

Wealthier individuals and families
  • For individuals earning more than $200,000 per year and couples earning more than $250,000 per year, Medicare payroll taxes will increase.

2014

Uninsured
  • Health care coverage will be required for U.S. citizens and legal residents. The tax penalty will be $95 or 1 percent of taxable income in 2014; $326 or 2 percent of taxable income in 2015; $695 or 2.5 percent of taxable income in 2016; and adjusted according to income every year after. There are exceptions for religious objectors, those who can't afford coverage, individuals below the tax-filing threshold, and various others.
  • States will create insurance marketplaces, known as "exchanges," for people and small businesses to buy coverage. U.S. citizens and legal residents who are not incarcerated would qualify to buy coverage in an exchange. States can expand their exchanges to provide coverage for large employers in 2017.
  • Premium subsidies will be available for individuals and families with incomes between 133 percent ($14,404 for individuals and $29,326 for a family of four) and 400 percent ($43,320 for individual or $88,200 for a family) of the federal poverty level.
  • States will be required to expand Medicaid to individuals under age 65 (children, pregnant women, parents, and adults without dependent children) who are up to 133 percent of the federal poverty level. There was an option for states to expand Medicaid in 2011.
People with health insurance
  • Insurers may not deny you coverage because of preexisting conditions. Similar provisions prohibiting insurers from denying coverage to children with preexisting conditions began in 2010.
  • Insurers must accept everyone who applies for coverage when they apply during a defined enrollment period.
  • Insurers can only base premiums on age, tobacco use, geographic area, and whether coverage is for an individual or a family.
  • Insurers may not deny coverage because of a person's health status, medical condition, claims experience, medication history, genetic information, or disability.
Businesses
  • Large employers who don't offer employee health care coverage will pay $2,000 for each full-time worker who receives a tax credit for health insurance through a state exchange.
  • Tax credits for small employers increase to 50 percent (35 percent for nonprofits) of the health care premiums the business pays.
  • Businesses with more than 200 employees must automatically enroll employees in a health insurance plan. Employees can opt out.

2020

Medicare beneficiaries with Part D coverage

Went into Effect in 2010 and 2011

Uninsured
  • Texans who have been without coverage for at least six months and who have a preexisting conditions may obtain coverage through a high-risk health insurance pool run by the federal government. The federal risk pool, called the Pre-Existing Condition Insurance Plan (PCIP), is temporary until exchanges become effective in 2014. The federal risk pool website is www.pcip.gov or call the toll-free number 1-866-717-5826.
People with health insurance
  • Insurers may not arbitrarily cancel your coverage when you get sick, except in cases of fraud. Insurers may not impose lifetime coverage limits and, until 2014, may not set annual limits below certain levels.
  • Insurers must cover preventive services with no co-payments or deductibles.
Children and young adults
  • Children who don't get health care coverage from their employers may stay on their parents' plans until age 26.
  • Insurers may not deny coverage to a dependent child under age 19 because of preexisting conditions. The same will be true for adults and dependent children age 19 and older beginning in 2014.
Medicare beneficiaries
  • Eligible beneficiaries with Part D coverage who enter the "donut hole" in 2010 can receive a one-time $250 rebate to pay for prescription drugs that were purchased while in the donut hole. The donut hole is the period of time during which some Medicare prescription drug plans won’t contribute anything toward your prescription costs.
  • Seniors with Part D coverage in the donut hole began receiving a 50 percent discount on brand-name drugs in 2011.
  • Co-payments and deductibles for preventive services were eliminated in 2011. Read the Centers for Medicare and Medicaid Service's publication Your Guide to Medicare's Preventive Services for more information.
Businesses
  • Businesses with 25 or fewer full-time employees that pay for at least 50 percent of premiums and pay average annual wages below $50,000 may be eligible for a tax credit of up to 35 percent (25 percent for nonprofits) of the premiums the business pays. The credits increase in 2014. Small businesses can claim a tax credit for a refund in 2010, 2011, 2012, and 2013 and for any two years after that.
Insurance companies
  • For small group and individual plans, insurers in 2011 were required to start spending at least 80 percent of revenue from premiums on medical services and programs directly related to improving health care quality. The amount increases to 85 percent for large group plans. Insurers that fail to meet the minimum payment requirements must provide refunds to enrollees.

TDI Resources

Web Resources
FHR Implementation
TDI Press Releases
Publications

Contact TDI

For answers to general insurance questions or for information on filing an insurance-related complaint, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website
1-800-252-3439
463-6515 in Austin
If you didn't find the answer to your question, contact TDI by e-mail at ConsumerProtection@tdi.state.tx.us.

File an Insurance Complaint

TDI accepts and reviews written complaints against insurance companies, HMOs, insurance agents, adjusters, and fully insured or fully funded health benefit plans (health plans purchased by an employer from an insurance company or HMO).
For information on filing an insurance-related complaint, visit our website or call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday.
Insurance Complaint Forms
English Online Form
Easy Print Form RTF Format | PDF Format
En Español En linea Forma | RTF Format | PDF Format

Help Us Prevent Insurance Fraud

Consumer Help Line - 1-800-252-3439
Online Fraud Reporting
Secure Transmission, Fast, Comprehensive, Easy Data Entry
Online Fraud Reporting for Consumers
Online Fraud Reporting for Insurance Companies

For more information contact:
ConsumerProtection@tdi.state.tx.us

Last updated: 10/05/2012


Contact Information and Other Helpful Links


TDI Logo
Texas Department of Insurance
333 Guadalupe, Austin 78701
P.O. Box 149104, Austin 78714
(512) 463-6169

Consumer Help 1-800-252-3439

Stay Informed

Opportunities for Public Input on Federal Health Reform Issues

Essential Health Benefits

Next Steps

HHS has not yet provided clear guidance on the process for states to submit a benchmark plan. However, they have communicated an intent to solicit public comment following the September 30 deadline. For states that have not yet submitted a selected benchmark plan, HHS will post the default plan (BCBSTX Best Choice PPO) for public comment. TDI continues to analyze the benchmark plan options to assist leadership with this decision.

Updated Analysis

TDI has released an updated analysis of Essential Health Benefits benchmark plan options, which includes the following changes:
  • As requested by stakeholders, certain components of mental health services (psychological testing) and outpatient rehabilitation services (physical / occupational / speech therapy) are listed in more detail
  • Quantitative limits for certain services are now on the chart, rather than limited to footnotes
  • The analysis incorporates 13 additional benefits, in order to include all services listed in HHS’s template for EHB submission
  • Cost estimates of the potential state responsibility for mandated benefits not covered by each benchmark plan option have been listed by mandate and by plan
TDI has also posted new resource documents, including HHS’s templates for EHB submission and a decision tree summary of TDI’s analysis.

TDI Cost Estimate Summary

  • Any mandate missing from the selected benchmark plan may impose a cost to the state beginning in 2014
  • TDI estimated the cost associated with each benchmark plan option based on missing mandates; assumed that under pending federal rules mandated offers would not be considered mandates
  • Cost estimates based on two data points: reported industry experience and actuarial analysis
    • TDI surveyed four issuers (comprising 73 percent of the individual market and 85 percent of the small employer market) and received PMPM estimates of the cost of each mandate
    • TDI requested an actuarial analysis from Milliman of the PMPM cost of each mandate, based on their proprietary data
  • Milliman also provided enrollment projections for the individual and small group markets, with and without the Medicaid expansion, for 2014 and 2015
  • Estimate data was combined and weighted. Issuer reported data was weighted by relative market share; the result was given a 50 percent weight, with Milliman estimates comprising the other 50 percent.

Resource Documents

Public Meeting

The Texas Department of Insurance hosted a public forum on Essential Health Benefits on Tuesday, August 28. Together with 122 stakeholders in attendance, and 114 listeners on the phone, we enjoyed an open discussion about the benchmark selection process, Texas’ Essential Health Benefits options, and the impact of this decision. To assist the discussion, TDI provided an analysis of the ten benchmark plan options dictated by HHS. In addition to input provided in person, TDI has received written comments via email. Comments are still being accepted and may be submitted to Amy.Einhorn@tdi.state.tx.us
Please contact Amy Einhorn (Amy.Einhorn@tdi.state.tx.us) with any questions.

For more information contact:
LHLMgmt@tdi.state.tx.us

Last updated: 10/01/2012


Contact Information and Other Helpful Links


Workers' Compensation


You are here: www.tdi.texas.gov · news · 2012 · news2012102.html
October 4, 2012

Workers' Compensation Health Care Network Report Card Published

AUSTIN – The Texas Department of Insurance (TDI) Workers’ Compensation Research and Evaluation Group has published the annual report card on the performance of Workers’ Compensation Health Care Networks as required under Chapter 1305, Texas Insurance Code.
The report card is the sixth to be published since TDI certified the initial networks in early 2006. Contained in the report card is a comparison of network and non-network claims on a variety of measures, including health care costs, utilization of care, satisfaction with care, access to care, return-to-work outcomes, and health outcomes. The 2012 report card also compares the performance of certain political subdivision networks authorized under Section 504.053, Texas Labor Code, with networks certified by TDI and non-network claims.
Overall, networks certified by TDI continue to show improvements in a variety of measures, including medical costs, return-to-work outcomes, and health outcomes, compared to previous report cards. Networks generally produced better return-to-work and health outcomes compared to non-network claims. Non-network claims continued to have lower average medical costs than network claims, but cost reductions in networks have closed that gap from 17 percent in 2011 to 7 percent in 2012.
Data used to measure performance of the networks includes: workers’ compensation medical billing and payment data collected by TDI for injuries that occurred between June 1, 2010 and May 31, 2011; results of a survey of these injured employees conducted by the University of North Texas Survey Research Center; and results from a February data call issued by TDI to 30 networks. Currently, certified Workers’ Compensation Health Care Networks offer services in 250 Texas counties.
The network report card is posted on the agency website at: http://www.tdi.texas.gov/reports/wcreg/documents/2012_report_card.pdf.
Information on the networks certified by TDI, their service areas, and contact information can be found at http://www.tdi.state.tx.us/wc/wcnet/index.html.


For more information contact: PIO@tdi.state.tx.us
Last updated: 10/05/2012

Contact Information and Other Helpful Links

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