College of Media

‘Worst-performing insurance company’ — continued

Setting up the investigation

The public needs to know if the state is properly monitoring health insurance companies. Reporters can produce stories on the state level from their computers to answer that question.

A list of state insurance regulatory agencies that handle medical insurance is provided at this Web site of the National Association of Insurance Commissioners: www.patientrights.com/links/links7.htm. There is also a map for convenience: www.naic.org/state_web_map.htm. Although many documents are public record, some are not available online.

In the state of Arkansas,the Life and Health Division maintains the original submission and related correspondence for all insurance filings where final disposition has been made. These records are maintained by the filing company and are available for public inspection in the Life and Health Division at 1200 W. 3rd St., Little Rock, Ark., during normal business hours. The Division prefers advance arrangements by calling 501-371-2800 or 800-282-9134. Copies of selected documents are available at a charge of 25 cents per page, and exact change or a check is required to pay copying charges.

The State of Colorado Division of Insurance has a Web site that includes industry information at www.dora.state.co.us/insurance/industry/industry.htm. Click on Financial Examinations for detailed financial information.

At that site, the University of Illinois investigative class looked at the reports of financial exams for several companies, starting with Aetna Health Inc. The students compared hospital/medical benefits paid out to the total amount of premiums received to find what percentage of income from premiums goes to policy holders. In the file the students found for the most recent year, Aetna received $110.6 million and paid out approximately $88 million, so 80 percent of the company's income was paid to policy holders.

All the companies use the same type of form to file the information, so company-to-company comparisons are fairly easy.

Next teh students looked at the information for Pacifcare of Colorado, which showed $956.5 million in premium revenue and $615.3 million paid in claims. Policyholders received 64 percent of premium revenue.

The students also looked at Rocky Mountain Hospital and Medical Services, which received premiums totaling almost exactly $1 billion. They paid out $810 million, which means they returned 81 percent.

Cigna was next, and it returned 87 percent.

So it seems something is unusual about Pacificare of Colorado. A bar chart would show the others paying benefits in the area of 80 percent of premiums received. That towers over the 64 percent Pacificare paid out.

There must be a reason Pacificare returns so much less. It would be an interesting next step to read the complaints against a company, which are found on many Web sites, to determine if any additional information could be learned about the companies.

With such solid facts, a reporter could talk to the insurance companies and the commissioner and wrap it all into an informative story.

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