Delaware Insurance Commissioner Matt Denn stopped near Bethany Beach area on Oct. 11, to share from his area of expertise, before members of the Southeastern Sussex Democratic Club, at the Cottage Café.
Coastal Point • SAM HARVEY:
Delaware Insurance Commissioner Matt Denn speaks to the Southeastern Sussex Democratic Club at the Cottage Café on Oct. 11.
Club Vice-President Richard Legatski introduced Denn with a resounding endorsement, saying he’d already accomplished more in his first year than his predecessor (Republican Donna Lee Williams) had in the previous 12.
“I said I was going to really focus on a few things if I was elected,” Denn noted. “One was trying to control the cost of insurance, across the board — auto, homeowner’s and health insurance — because they’re really having a serious impact on Delawareans in general, in particular, working families.”
And, he said he’d heard a lot about citizens getting a raw deal from some insurance companies — “not getting authorizations they needed to get medical treatment they were entitled to, getting their insurance cancelled or non-renewed for reasons that weren’t really appropriate,” he detailed. “All sorts of small things — small things in the big picture, but to individual people, things that make a huge difference in their ability to live their lives.”
Denn suggested these problems disproportionately affected moderate- or fixed-income households.
Regarding auto, he said Delaware had among the highest auto insurance rates in the country. And as for homeowner’s he said Delaware’s rates were once among the best in the country, but were now merely average.
“Average is ok, but when you used to be the best, you hate to see yourself rising into the middle of the pack,” Denn pointed out. “And our health insurance costs are also among the highest in the country.”
Taking health first, Denn said his office was trying to address the problem from two angles — by controlling costs to the heath care providers, and by helping people get a better deal on their insurance.
He said health care providers were spending 20 to 25 percent of their income, not on providing care for patients, but in trying to figure out whether insurance companies were going to pay them back or not.
“I’ve heard of bills being sent back six, eight, 12 times, each time with a different question, each time asking for a different medical record they hadn’t asked for the previous time,” Denn recounted. “The cumulative effect is to create a huge overhead cost to the health care providers. Many of them were hiring outside companies to collect their bills for them, and all that trickles down into what we pay for in health care and health insurance.”
Denn said his office had instituted a new and aggressive set of rules to ensure doctors received an answer, in a timely manner.
“What the doctors are telling us, and I hope they’re right, is that that is going to cut down dramatically on what they spend on that part of their business,” he said. “Hopefully, we’ll start to see, over the next three or four years, some of the results of that in terms of our health insurance costs.”
Denn said they were also wrestling with medical malpractice issues. These issues were not only driving up insurance costs — they were creating problems for public health, he said. “Right now, in Kent and Sussex counties, the number of ob/gyns (obstetricians and gynecologists, the doctors most closely focused on natal and prenatal care) who are going to be moving into other specialties over the next three or four years — it’s just increasing dramatically.”
According to Denn, pregnant women were having trouble finding adequate care. “For us, it’s an unacceptable situation,” he said. “Delaware’s had, for a number of years, one of the worst infant mortality rates in the country, and part of the reason for that — as everyone knows, proper prenatal care is directly related to how well babies do when they’re born.”
On the other side, trying to get people a better deal on health insurance, Denn said insurance companies were doing very well, financially. But, especially for individuals and small business, they had a greater ability to name their price, he suggested — those groups had very little bargaining power, very little leverage.
He recommended Senate Bill 146, (out of committee, mid-June 2005), “creating a Delaware health insurance pool,” which he said was supported by the state Chamber of Commerce, and many local chambers.
With SB 146, individuals couldn’t be denied for pre-existing conditions, but the state could re
insure people who rack up serious medical bills in any given years, to “cap off” liability for health insurance companies (state picks up 90 percent, beyond $30,000).
In addition, he suspected health insurance companies would find an attraction in “good faith” participation with a state-created pool. Doing business with the state was the most lucrative way to go, Denn pointed out — the state being self-insured, insurance companies basically picked up a flat fee for acting as a go-between.
With the state providing SB 146’s package of back-ups and perks, he suspected insurance companies would be able to lower premiums. It would need to be subsidized — Denn said actuaries anticipated a $13 million layout in the first year, for the first 32,000 to 36,000 Delawareans.
However, those costs paled in comparison beside the $500 million Delaware spends annually for Medicaid programs, he pointed out.
He detailed another bill, SB 236 (locked in committee, July 2005), which would grant his office “the same ability to review health insurance premium rates that it now has for auto insurance, homeowners insurance, and all other lines of property and casualty insurance.” However, he said it was vigorously opposed by health insurance lobbyists, and would be very hard to pass.
Moving on to auto insurance, Denn said fraud was the No. 1 factor driving costs, but they had been able to get SB 20 passed (Gov. Ruth Ann Minner signed off mid-June 2005). With this new law in place, police can physically remove someone’s license plate if they’ve had multiple opportunities to get insurance and haven’t taken advantage of them.
He also suggested increased penalties (fines) for trying to file fraudulent claims.
On homeowners insurance, Denn said they’d instituted new rules forbidding insurance companies from non-renewing people unless (1) the homeowners were told to fix something, and didn’t or (2) they made some kind of change to their property (examples given were a new woodstove, or a swimming pool).
Finally, Denn talked some politics, encouraging club members to support their Democratic candidates, who could then support bills SB 146 and 246 in future legislative sessions.
“Sussex County is tough for Democrats — I didn’t win,” he said. However, he suggested the county could still be critical, in tipping the scales for a statewide contest.