Tag: Sara Stovall

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Stressed test: Life with the highest health insurance premiums in country

Massage therapist Jane Neldon has been unable to relax about being able to pay for her health insurance. eze amos

A year ago, Jane Neldon thought she was doing well enough as a massage therapist to start working on her own. Then she saw her health insurance premium spike from $280 a month to more than $700.

“My health insurance costs more than the rent for my office,” she says. “In a year that I thought I’d finally be making strides, I was knocked back down.”

Emily Bardeen retired two years ago at 62 years old and in budgeting, she anticipated the $500 a month she was paying for health insurance could double. Instead, she’s paying more than $2,000 a month for coverage with Optima, the only carrier available for individual coverage in Charlottesville. Its rates here for 2018 jumped 300 percent, the highest in the country.

“It’s crushing as a retired person,” she says. “I pay $2,336 for the right to have a $4,600 deductible on my silver plan.”

When she spoke with C-VILLE, Bardeen had just gotten home from the hospital. “I knew going to the hospital was going to cost me $4,600,” she says. “I nearly didn’t go, but I really needed to.”

Neldon and Bardeen are two of the many locals who were gobsmacked by the rates Optima offered here. And they’ve joined Charlottesville for Reasonable Health Insurance, an 810-member group that doesn’t believe Optima’s rates are justified.

Sara Stovall, one of the group’s organizers, raised an outcry last year when she found out insurance for her family of four would cost nearly $3,000 a month. The group filed a complaint May 30 with the State Corporation Commission about the Bureau of Insurance, which okayed Optima’s 300 percent premium increase.

“We have extremely compelling information that the Bureau of Insurance acted irresponsibly,” says Stovall. Optima’s preliminary rates for 2019 are 30 percent lower than 2018, further proof, she says, that the current rates are “unjustifiable.”

The SCC responded that the group’s letter wasn’t enough and it needed an attorney and actuary to file a formal complaint, says Stovall. “They’re sort of circling the wagons,” she says. The group is determined to push the issue and already has an attorney—and Stovall has talked to an actuary.

For Neldon, 31, skyrocketing premiums have been “a huge heavy weight on me,” she says. “It’s a factor in every decision I make. Do I go to the doctor or wait it out? That used to be an easy decision for me.”

She adds, “It’s a new stress about something I haven’t had before.”

“It affects our life in every way,” echoes Bardeen. She and her husband were about $200 above the Affordable Care Act’s cutoff for subsidies. “There’s no sliding scale. You either get help or you don’t.”

Bardeen’s husband is eligible for Medicare, but for her health insurance, they’re paying $30,000 a year—twice as much as their mortgage. “It’s unthinkable,” she says. The couple is considering a move to Waynesboro, and while insurance isn’t the main reason, “it is a factor,” she says.

Bardeen stresses that during her visit to Sentara Martha Jefferson’s ER, her caregivers “were very conscious” about her health insurance concerns. Sentara also owns Optima.

On July 1, a Senator Creigh Deeds bill goes into effect that allows self-employed people like Neldon to get the coverage available for small businesses. And Deeds and Delegate David Toscano are working on other bills, such as one that would require more transparency in hospital pricing, says Stovall.

For Neldon, the new law means “some light” at the end of the health insurance tunnel.

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Locals hire attorney, challenge Optima premiums

Ian Dixon and Sara Stovall, at a Charlottesville for Reasonable Health Insurance meeting in December at Random Row Brewery, have raised more than $17,000 and hired a powerhouse lawyer to question Optima’s tripled health insurance premiums. Stephen Barling

After Charlottesville earned the dubious distinction of having the most expensive health insurance premiums in the country, some of the area residents who couldn’t afford to pay $3,000 a month formed Charlottesville for Reasonable Health Insurance and retained a lawyer who’s made a career out of keeping insurance companies honest.

Washington, D.C., attorney Jay Angoff was hired to implement the Affordable Care Act in 2010, and before that he was the commissioner of insurance in Missouri. He has worked for Ralph Nader, and he published a landmark study in 2005 that showed how insurance companies artificially inflated malpractice insurance rates for doctors, which in turn increased prices throughout the system.

“He developed a reputation for using the legal system to fight for the little guy against Goliath insurance companies,” says the Washington Post.

And that’s why Sara Stovall and Ian Dixon are happy to have Angoff on their side.

“We’re hoping the name recognition of our attorney and the details our letter has” will get the Bureau of Insurance to take another look at Charlottesville’s rates, says Dixon.

Dixon created a GoFundMe account to raise money to pay for legal fees, and it’s reached $17,636 of its $20,000 goal.

On January 4, Angoff sent a nine-page letter to the Bureau of Insurance detailing ways Optima Health calculated its premiums here that he says are “excessive” and even a violation of federal law.

For example, Charlottesville has a rating factor of 1.579 that far exceeds any other geographic area in the state and that of other carriers, which use 1.07 or lower for this area. Optima executives told Stovall and Dixon that rate was in part because of “the relative health of the population that’s buying.”

And consideration of morbidity in determining that rating factor “violates federal law,” Angoff writes to Virginia’s commissioner of Insurance Jacqueline Cunningham.

Optima spokesperson Kelsea Smith says, “We did not violate the guidelines” and comments the company did “are simply false.”

Angoff also points out that Optima’s own rating factor to insure small groups in Charlottesville is .937, a difference that “would seem to have no rational basis.”

Angoff calls Optima’s 8 percent profit factor in its individual premium rates “unjustifiable” for a nonprofit. And because Optima uses a 5.7 profit for its small group rates, individual policyholders may be subsidizing small group policyholders, says Angoff. He suggests the bureau “may wish to consider whether such a strategy could reasonably be considered unfair discrimination.”

The profit margin “was merely an estimate,” and Optima has lost $32 million over three years on the exchange, says Smith.

Angoff notes that Optima’s ownership of Martha Jefferson Sentara should enable it to negotiate favorable terms for those it insures and to provide leverage with UVA Health System, which Optima has claimed charges higher rates and is more expensive to cover.

That allegation drew a letter to the Post from Richard Shannon, UVA executive vice president for health affairs, who disputes Optima’s assertion that UVA is the reason premiums skyrocketed. He says Optima clients account for fewer than 1 percent of commercially insured patients cared for at UVA, and “Sentara has the opportunity to benefit from these higher premiums while paying itself as a care provider.”

Shannon also takes issue with Optima’s claim that Charlottesville is a high-cost region for health care, and cites a 2015 New York Times article that puts this area 85th lowest among 306 hospitals nationwide for commercially insured beneficiaries.

The challenge could be a first. Dixon says he’s “not aware of a consumer who’s challenged an insurance company on its rates.” And some of the details brought out in Angoff’s letter “are a hard thing for the Bureau of Insurance to dismiss,” he says.

At press time, the Bureau of Insurance had not responded to the letter. “We’re super impatient,” says Stovall. At the same time, she realizes, “We need to give the bureau the space and time to do their investigation.”

In her dream scenario, she hopes “it will motivate the bureau to take immediate action and modify the rates,” she says.

And there’s some urgency for those who lost coverage when their provider pulled out of the area. “Everybody using the Affordable Care Act before qualifies for a special enrollment period until March 2,” says Stovall. “We’re still mad as hell about it and because there’s this special enrollment period, we feel like this is something we can fight for,” says Dixon.

Stovall sees longer-term damage from the tripled health insurance premiums, which could deter someone considering starting a small business and could set a precedent for another insurance company to use the rates as a basis for setting its own.

Says Dixon, “Anyone coming to this area could say this is a very expensive area.”

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Morbidity rates: Optima’s health insurance premium calculations challenged

Sara Stovall and Ian Dixon met with Senator Tim Kaine, far right, and Kristen Molloy, his senior health policy advisor, and legislative correspondent Nicholas Widmyer. Photo courtesy Senator Kaine's office.

 

In November, Sara Stovall was grappling with a health insurance premium that had skyrocketed from $940 a month to $3,000 for her family of four in the Charlottesville market, which found itself with the highest rates in the country.

Now Stovall says she has a better idea of why this area’s rates are so high. She believes Optima Health—the area’s only individual policy provider—used a factor in calculating health insurance premiums that the U.S. Department of Health and Human Services forbids—and she says its incoming CEO admitted as much in a December 14 meeting.

Stovall and fellow Charlottesville resident Ian Dixon met with Optima CEO Michael Dudley and his successor, Dennis Mathias. It was there that in explaining why Charlottesville’s rates are so high, according to Stovall and Dixon, Mathias said, “The morbidity of the people buying in this marketplace is higher than other parts of the state.”

The two say Dudley further explained that morbidity is “how sick people are.”

And that’s a big no-no in HHS’ 2018 Unified Rate Review Instructions: “Geographic factors may not reflect differences in morbidity by region.”

To Dixon and Stovall, inclusion of morbidity as a factor would explain why a Charlottesvillian would pay 68 percent more for a bronze health plan than someone in the Hampton Roads area.

They point out that Optima’s filings use an area rating factor for Charlottesville that’s 58 percent higher than Hampton Roads—but they say Anthem’s area rating for Charlottesville was lower than Hampton Roads. “There’s no history of our area being rated this high,” says Dixon.

Another factor they question is the difference between Optima’s individual policy rates and the small group rates it offers businesses. In Charlottesville, the small group rate is significantly lower than an individual plan, despite both using the same providers and the same provider reimbursement rates, says Dixon.

“We don’t see any justification for the 58 percent difference from small group and individual rates,” says Stovall.

“They said small groups are healthier,” says Dixon. “The health of the population and morbidity cannot be used in setting the rates.”

In a statement from Optima’s Dudley, he does not address the question of whether morbidity was used in how the company calculated its Charlottesville premiums.

“We have carefully revisited our 2018 premium calculations,” and determined the calculations were accurate, reviewed by third-party actuarial experts and approved by the Virginia Bureau of Insurance and the Centers for Medicaid and Medicare Services, he says.

Optima did not respond to a question about the statements allegedly made by Dudley and Mathias on morbidity, but says, “This is a very complex issue, and we correctly addressed all appropriate adjustments in accordance with state and federal laws, and, as required by the regulations, the geographic factors did not reflect differences in morbidity by region.

Stovall and Dixon met with people from Virginia’s Bureau of Insurance, and say that while those in the meeting initially were skeptical about their concerns, “by the end of the meeting they felt our concerns were valid,” says Stovall.

“You’ll have to rely on what they’re telling you as far as the meeting goes,” says Ken Schrad, spokesperson for the State Corporation Commission, under which the Bureau of Insurance resides.

“The bureau can always seek further information to be responsive to an inquiry or complaint from an already accepted filing,” he says.

Would Optima’s request for premium rates that are the highest in the country raise any red flags at the Bureau of Insurance? Says Schrad, “There’s so many factors that go into filing for insurance plans. To point out one factor alone as driving something would be hard to do.”

Optima maintains that when Anthem pulled out of the Charlottesville market, leaving zero insurance providers, despite business advisors telling the insurer to steer clear, it was asked by the commonwealth to come in and cover as many people as it could.

Optima Health is owned by Sentara, which also owns Sentara Martha Jefferson Hospital here. Optima did not respond to a question about whether that also was a factor in its decision to offer coverage here.

The company did say it had lost more than $30 million in the past three years in Virginia under the Affordable Care Act and this “is not sustainable.”

And Dudley’s response to Stovall and Dixon suggests they move on. “The reality is that premium rates are locked in for 2018,” he says. He adds the wish that “Washington would establish an environment that allows for affordable health plans.”

While Dixon considers the response “evasive” in not addressing “the crux of our complaint about morbidity,” he and Stovall are with Dudley on one point. They plan to escalate with the Bureau of Insurance and go back to their senators and congressman to figure out why Charlottesville can’t get affordable care.

Updated December 27 with Optima’s denial that morbidity was used to calculate Charlottesville’s health insurance premiums.