I am not a fan of federal oversight of insurance; I am not a fan of federal oversight of just about anything.

Sure, when public safety is an issue — such as requiring inspections to avoid tainted foods or regulations that dictate how many hours a plane can fly before it is serviced — well, that is a no-brainer.

But having the government get involved in health insurance (it hasn’t worked so well in places such as Canada and England) isn’t necessarily a good idea. No one can say with a straight face that the IRS or the Social Security Administration are efficient, well-run operations. And heaven forbid we mention the rampant fraud associated with Medicare and Medicaid.

However, the tide will likely shift after the near collapse — and subsequent government bailout — of the world’s largest insurance carrier, AIG. Read the rest of this entry »

The most vocal — and possibly most unlikely -– critic of the proposed merger between Highmark Inc. and Independence Blue Cross in Pennsylvania has resigned abruptly, according to an IFAwebnews.com article. Neither now former CEO Anita M. Smith nor officials at Capital BlueCross, the Harrisburg, Pa.-based health insurer in Central Pennsylvania and the Lehigh Valley, would offer an explanation for her departure.

The timing, in the heat of the debate over the merging of Highmark and IBC, seems more than a coincidence. Since we don’t have the real reason or reasons for Smith cleaning out her office, I’m left to speculate. I have three-and-a-half theories.

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The stock market had been open for just seven minutes Monday before the first call for federal regulation of insurance was made on CNBC.

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Without question, a recent opinion piece by Robert J. Samuelson in Newsweek is THE most definitive I have ever read about universal health care.

Enough said. Just read it already.

Two interesting takes recently on the subject of increased government intervention into health insurance…

In California, lawmakers passed a law that requires health insurance carriers to spend a portion of premium dollars on patient care, resulting in a drop in the share prices of some of the nation’s largest health insurers, according to an article on Forbes.com.

In another turn, Republicans announced that the party is rejecting a push by some to inject the government more into the healthcare and health insurance industry.

On the one hand, we have a government move that hurts companies and the investment that many Americans make in those firms, and on the other hand we have a group that wants to limit how much the government should dip its hand into private business.

The Bush administration has opened a huge can of worms with its latest proposal to implement a regulation designed to protect doctors, nurses and other healthcare workers who object to abortion from being involved in the procedure, if such procedure violates their personal beliefs. According to The Washington Post, nearly 600,000 hospitals, clinics, health plans and doctors’ offices could lose federal funding if they don’t accommodate these professionals.

The debate then moves to health insurance companies, who might read the regulations as permitting them to remove birth control from their coverage plans, in spite of state laws that require them to cover contraception, according to The Wall Street Journal. Read the rest of this entry »

Just exactly who says independent insurance agents are not getting their fair share?

A representative of the IIABA (Independent Insurance Agents & Brokers of America), that’s who!

Wesley Bissett claims that insurance companies are requiring independent agents to do more, and should receive contingent commissions for their additional work. Read the rest of this entry »

The CEOs of Independence Blue Cross and Highmark Inc. were emphatic that any condition of approval forcing them to give up either the Blue Cross (under which IBC operates) or the Blue Shield (under which Highmark operates) would put an end to their proposed merger, according to an IFAwebnews.com article.

Kenneth Melani of Highmark and Joseph Frick of IBC may have given Pennsylvania Insurance Commissioner Joel Ario an easy out, if he’s even interested in killing the merger. Here’s my thinking: Impose the one condition the CEOs oppose: abandoning either the Blue Cross or Blue Shield name mark. Then watch as the state’s two largest health insurers walk away from their deal.

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Don Bailey, CEO of Willis North America, had a simple message for insurance regulators in New York looking at broker compensation and contingent commissions: Eliminate them for everyone. Bailey’s testimony on the topic featured a well-reasoned call for the termination of all contingent commissions in New York within three years. According to an IFAwebnews.com article, Bailey even gave two suggestions for how to do it: Force agents who register for licenses to stop taking them or challenge the insurance industry to resolve its own problem. The first one makes sense; the second one seems unlikely to lead to a quick resolution, although it would be fun to watch.

Bailey asked New York Insurance Superintendent Eric Dinallo and representatives of the New York attorney general’s office to create a “level playing field” because Willis – and probably the three other major insurance brokerages that settled issues in New York over paying contingent claims – is at an “unfair disadvantage.” Of course, if you flash back a few years, prior to then New York Attorney General Eliot Spitzer’s investigation that led to the settlements and now the hearings about contingent commissions, many of Willis’ competitors would have argued that Willis had an unfair advantage. The playing field for Willis’ competitors then was as uneven as it probably seems now to Willis and the others who settled claims about contingent commissions in New York.

Ending contingent commissions is the right move. What remains to be seen is how best to do it and how long it will take afterward for another brokerage to claim that the playing field is once again uneven.

The circus is making three stops in Pennsylvania over the next two weeks as Pennsylvania’s insurance commissioner, Joel Ario, will serve as ringmaster as the sides debate, discuss, dispute, dissemble and distort the possible effects of a merger between Independence Blue Cross and Highmark Inc.

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If Barack Obama were to choose Kansas Gov. Kathleen Sebelius as his running mate, it might be good for the insurance industry. She understands the various facets of insurance issues and she could offer a more balanced view on insurance regulatory reform than any other candidate, including and especially Hillary Clinton. Read the rest of this entry »

Insurance like life can be ironic sometimes.

Liberty Mutual recently earned a $25,000 fine from Maryland Insurance Commissioner Ralph S. Tyler for failing to give proper notice of a proposed rate increase, according to an article at IFAwebnews.com. The property-casualty insurer had a computer problem that caused the problems.

The insurer isn’t alone. Its regulator in Maryland, the Maryland Insurance Administration, had some computer system problems of its own last year. For several days in February 2007, the MIA Web site wouldn’t allow producers to process their licenses, causing problems to agents seeking to apply for new or renewal licenses. The MIA fixed the problem, but didn’t incur any penalty, even though Maryland insurance agents were obviously inconvenienced.

As the insurance industry continues to increase its reliance on technology as a means to cut costs, computer problems are likely to occur - for insurance companies and regulators.