Nebraska Legislature: Bill seeks more data for insurance cli

Nebraska Legislature: Bill seeks more data for insurance clients Steve Jordon Omaha World-Herald, Neb. McClatchy-Tribune Regional News
Feb. 13--A proposal in the Nebraska Legislature would require insurers to provide more claims information to clients on group policies covering more than 50 employees, but some insurers say it would provide misleading data and might conflict with federal privacy laws.

"You can't allow anyone to be targeted as the reason your premiums went up," said lobbyist Jan McKenzie, executive director of the Nebraska Insurance Federation, which represents the state's insurers and opposes Legislative Bill 637l.

McKenzie said a law isn't necessary because insurers already give clients enough information to make good decisions.

Another issue with the bill is whether it should apply to all employee groups. Small employers who want to reduce health insurance costs don't get reports from their insurers totaling past claims and premiums.

The proposal is scheduled for a March 2 hearing before the Banking, Commerce and Insurance Committee.

State Sen. Heath Mello of Omaha, who introduced the bill, said he will look for common ground among the interested parties -- insurers, insurance brokers and third-party administrators, which are companies that handle self-insured plans for businesses. Mello said he might offer amendments after the hearing.

"This would provide another tool for businesses to use to combat rising health insurance costs" and evaluate savings from company wellness programs, Mello said.

Lee Johnson, president of Mid-American Benefits Inc., an Omaha third-party administrator, said companies with fewer than 100 employees need more information to search for lower-cost coverage.

"I'm tired of having to tell employers, 'I'm sorry I can't get you a decent bid'" because there's no data on past claims. He said 20 states require insurers to disclose such information. LB 637 is modeled after Iowa's version.

As for privacy issues, Johnson said, small employers already know which employees miss work when they are ill, and the financial data would be totaled and not listed by name.

Pat Bourne, vice president of public affairs for Blue Cross Blue Shield, said that insurer gave claims information to brokers handling groups larger than 50, but most insurers didn't.

During an interim study of the matter, some groups wanted to expand the law to all employee groups, Bourne said, and Blue Cross withdrew its support.

Data for small groups are not "credible" because claims and premiums for a few years don't reflect the risk that a single large claim could happen unexpectedly, Bourne said.

An unscrupulous broker could use the information to justify switching insurance carriers, even if it isn't warranted, to earn a fee, he said.

He said brokers can accurately calculate premiums and assess risks for small businesses, usually by having employees provide their ages, health history and other information.

Jim Watson, vice president of state affairs for United HealthCare in Nebraska, said LB 637 raises privacy issues and has other problems that would need to be resolved.

Shelley Wedergren, a spokeswoman for Coventry Health Care in Omaha, said the company opposes the legislation as written because of potential privacy issues, but executives are still studying it.

The Nebraska Association of Insurance and Financial Advisors, which represents insurance agents, favored a version of the bill introduced last year but hasn't looked at this year's bill, said Dave McBride, executive vice president.

Brian Urban of Omaha, legislative chairman for the Nebraska Association of Health Underwriters, said his group is neutral because it represents groups holding opposing viewpoints.

But Urban said the association's members agree that the conflict has a common cause: the high cost of health care.