Saving You Money For Life

Computer records containing medical claim information, health data and Social Security numbers of over 28,000 health insurance customers of Nationwide Mutual Insurance Co. were stolen from the office of a vendor in Massachusetts last October. Also stolen were records on 130,000 Aetna health insurance customers.

This was not a hacker at work; the information was on computer “backup tapes” that were taken from a lockbox which was either left open or had its lock picked. The tapes were stored at a “third party administrator,” a firm that audits hospital stay charges and other customer claims.

Nationwide waited a couple of weeks to see if the tapes would turn up, and then notified their customer base. Aetna announced the theft in December. According to the insurance companies, they were waiting to see if any instances of identity theft turned up, which they believed to be unlikely. Apparently, none have.

Identity theft is a highly publicized issue and one that firms who deal in personal information as a business ought to be concerned with also – perhaps an investment in a device more sophisticated than a lock box might be in order.

What has not been discussed in the news coverage of this story is the potential use of medical histories contained in those tapes. Medical histories can ruin employment chances, wreck careers – and, for that matter, impact health insurance rates as well. That is why Congress passed the HIPAA law which put stringent controls on the dissemination of personal health information.

When highly personal records pass from doctor to hospital to insurance carrier to outsourced auditor, the spirit – if not the letter – of the protection written into HIPAA fade into the distant background. Once those records leave your doctor’s office, expect them to be treated as just another file that will be scrutinized by any number of individuals along the ‘managed health care’ production line.

Posted in Uncategorized | | No Comments »

Vermont insurance regulators are questioning the executive salaries and expenses of Blue Cross/Blue Shield of Vermont after they rejected the company’s request to raise their administrative fee structure by 21 percent. Presumably, cost increases of that magnitude are expected to lead to increases in health insurance costs to consumers. Blue Cross, the state’s largest health insurance carrier, must get state approval before increasing costs to customers.

Last month the Department of Banking, Insurance, Securities and Health Care Administration rejected the nonprofit’s request to increase administrative fees.

The rise would create “excessive, unfair and unjust” insurance rates, “in violation of Vermont law,” regulators said.

One of the issues raised by Department staff is the fact that William Milnes, the chief executive officer for Vermont Blue Cross/Blue Shield and a related managed care plan, was paid $854,000 for both positions in 2005. The compensation included $440,000 in bonuses.

Health policy analyst Jeanne Keller in Burlington said subscribers were owed an explanation for the compensation. “I think it would be very interesting for the board to disclose to the public for this nonprofit corporation, what in fact the goals were that he did achieve, (what) he did to earn a bonus that is so extraordinary in the light of what Blue Cross’ rate increases have been,” she said.

Posted in Uncategorized | | 1 Comment »

The fact that one out of six Americans has no health insurance has become old news around the country, and a new cause celebre in Washington. However another interesting statistic has emerged from a study conducted by the Department of Health and Human Services. Health care costs for the insured are rising, with 17 million of those under age 65 recognized as “underinsured.”

The Department defines this group as those who have insurance but still do not have “adequate financial protection” from high out-of-pocket health care costs,” according to the study. In this case, that means the number of Americans under the age of 65 who have insurance but still spend more than 10 percent of their family income on health care.

“We define the underinsured as persons who live in families that spend more than 10 percent of tax-adjusted family income on out-of-pocket health care costs (excluding premiums),” according to a study participant. That means that after paying your insurance bill each month, you’re spending an additional ten percent of your income on health care.

From another perspective, study reports that nearly 49 million Americans under 65 – including those with no insurance – lived in families that spent more than 10 percent of their tax-adjusted family income on health care when insurance premiums were included.

And about 19 million Americans under 65 lived in families that spent more than 20 percent of their income on health care.

In recognition of the obvious, the study shows that costs drove some people to delay or skip medical care for financial reasons. Those tough budget choices can have “severe consequences for those in poor health,” the researchers write.

Posted in Uncategorized | | 1 Comment »