Aetna launches new health plan

Sutter Health, a not-for-profit health care system in Northern California, and Aetna have announced plans to launch a jointly owned health plan. This new collaboration, the first of its kind in Northern California, will bring together

Sutter Health’s network of doctors and hospitals with Aetna’s health plan expertise, and shared care management capabilities.

Sutter Health and Aetna anticipate offering self-insured commercial products starting mid-2018 in the greater Sacramento, Central Valley and Bay Area communities, as well as fully insured PPO products to follow in early 2019, pending regulatory approval.

Celebrate excellence in insurance. Nominate a worthy colleague for the Insurance Business Awards.

This new company will complement Sutter Health’s and Aetna’s current products by providing more choices to Northern California’s commercially and self-insured populations.

By equally sharing ownership and accountability, Sutter Health and Aetna aim to “integrate the continuum of care delivery, from wellness to disease management, care coordination, and access.” The joint venture will also streamline administrative services for members.

The JV is hoping to use combined data analytics to identify at-risk patients sooner and provide them with earlier access to care by expanding access to alternative sites of care, and using advanced population health technology to help members better manage chronic and other health conditions.

“We are excited to partner with Sutter Health on this joint venture,” said Mike Bahr, Aetna’s senior vice president of local markets and territories. “With Sutter Health, we believe we have found a strong partner that shares our vision to transform health care in Northern California by providing members with a simpler, more personal experience.”

“Patients benefit when providers and health plans share resources and work together,” says Phil Jackson, Sutter Health’s CEO of Health Plan Products. “Our Sutter Health and Aetna insurance product offerings will provide employers with new self-funded and fully insured PPO options in Northern California.”

Currently, Sutter Health-affiliated providers care for more than three million Northern California residents. Aetna provides health care benefits to approximately 415,000 members in Northern California.

Aetna projects to have at least 75 percent of its claim payments in value-based models by 2020.

PR Newswire

Think that semi-autonomous Tesla should be cheaper to insure?

Tesla may tout its vehicles as safe, but an insurer thinks otherwise.

Insurance firm AAA is raising rates on Tesla cars by as much as 30% based on data showing that the carmaker’s two luxury models had more claims and cost more to repair.

A report by trade publication Automotive News said that AAA is basing its rate hike on data from the Highway Loss Data Institute.

According to the institute, Model X owners file for claims 41% more often than the average car, and that these claims cost 89% more than the average.

Meanwhile, the Model S was reportedly involved in 46% more claims than the average and that these claims cost at least twice as much as the average.

The report said that AAA saw the data as an anomaly. “Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates,” Anthony Ptasznik, AAA chief actuary told the News.

However, Tesla questioned the parameters for the data saying in an emailed statement to the publication that “This analysis is severely flawed and is not reflective of reality. Among other things, it compares Model S and X to cars that are not remotely peers, including even a Volvo station wagon.”

The report also said that other major insurers such as State Farm and Geico consider claims data as a significant factor in computing for premiums. The two companies did not disclose whether they will be increasing rates for their Tesla policy holders.

Background checks crucial for nonprofits

For nonprofits, the volunteer workforce is often critical to the safe and successful running of events. But with volunteers come risks.

While bad apples can be found everywhere, in any organization, the reputational repercussions for nonprofits from illegal or improper activities can be dire. That’s why insurers for nonprofits encourage the use of background checks on all volunteers.

Peter Persuitti, managing director of the nonprofit practice at Arthur J. Gallagher, said nonprofits were held to incredibly high standards – and not conducting background checks could open them up to serious reputational harm.

“One of the things that has been very clear in our understanding of risk is that, especially with employees and volunteers who are dealing with children, or dealing with vulnerable situations, or transporting people … that you really ought to do background checks,” he said.

And while the market is mature enough to know that 94% of crimes are committed by people who have passed background checks, allowing someone through the cracks could spell particular disaster for a nonprofit, Persuitti said.

“Reputational damage is [risk] number one,” he pointed out. “Nonprofits are held to a much higher standard than even the President of the United States, if you think about it. So there’s that potential… the stakes are extremely high for the institution.

“And there’s also, of course, other things that can happen as a result of an organization’s negligence. Coverage could be cancelled on a go-forward basis. So now there would be the chance that the organization doesn’t have the exposure or the risk covered or they have to go find it somewhere else. So there’s a myriad of things, but I think reputational damage and the harm to the victim – those things are just so huge.”

When it comes to background checks, nonprofits should also ensure they’re using a properly accredited company to conduct the screening, he added. Failure to use a proper organization can lead to other problems, like in one instance Persuitti mentioned, where a huge data breach at a nonprofit is speculated to have come from a third-party screening company.

Storms

Corelogic has released its 2017 Storm Surge Report which shows that nearly 6.9 million homes along the Atlantic and Gulf coasts are at potential risk of damage from a hurricane storm surge inundation with a total reconstruction cost value (RCV) of more than $1.5 trillion. The reconstruction cost value is the cost to completely rebuild a property in case of damage, including labor and materials by geographic location, assuming a worst-case scenario at 100-percent destruction. Storm predictions indicate the 2017 hurricane season will see fewer storms than both 2016 and the 30-year average. The National Oceanic and Atmospheric Administration (NOAA) predicts 12 total storms, six of which will develop into hurricanes, and three of those are predicted to be Category 3 or higher.

Corelogic’s latest study examines risk from hurricane-driven storm surge for homes along the Atlantic and Gulf coastlines across 19 states and the District of Columbia, as well as for 86 metro areas. Homes are categorized among five risk levels: Low (homes affected only by a Category 5 storm), Moderate (homes affected by Category 4 and 5 storms), High (homes affected by Category 3, 4 and 5 storms), Very High (homes affected by Category 2, 3, 4 and 5 storms) and Extreme (homes affected by Category 1-5 storms).

“Despite the fact that this year’s hurricane season is predicted to have fewer storms than last year, it doesn’t mitigate the risk of storm surge damage,” said Dr. Tom Jeffery, senior hazard scientist at CoreLogic. “As we’ve seen with past storms, even one single hurricane at a lower-level category can cause significant damage if it makes landfall in a highly populated area.”

At the regional level, the Atlantic Coast has 3.9 million homes at risk of storm surge with an RCV of $970 billion, and the Gulf Coast has just under 3 million homes at risk with $593 billion in potential exposure to total destruction damage.

At the state level, Texas and Florida – which have the longest coastal areas – consistently have more homes at risk than other states. Again this year, as in previous years, Florida ranks first with just under 2.8 million at-risk homes across the five risk categories, and Texas ranks third with 536,000 at-risk homes (Table 3). Since the number of homes at risk strongly correlates with the accompanying RCV, these two states rank first and fifth, respectively, for having the largest RCV).
States with less coastal exposure but lower-lying elevations that extend farther inland, such as Louisiana (ranked second at 808,000 at-risk homes) and New Jersey (ranked fourth at almost 470,000 at-risk homes), tend to have more total homes at risk because of the potential for surge water to travel farther inland. Louisiana and New Jersey are also near the top of the list for RCV, with Louisiana totaling almost $181 billion (ranked second) and New Jersey totaling $140 billion (ranked fourth).

At the local level, 15 Core Based Statistical Areas (CBSAs) account for 67.3 percent of the 6.9 million total at-risk homes and 68.6 percent of the total $1.56 trillion RCV . This disproportionate distribution of homes suggests that the location of hurricanes that make landfall is often a more important factor than the number of storms that may occur during the year. The Miami CBSA, which includes Fort Lauderdale and West Palm Beach, has the most homes at risk totaling almost 785,000 with an RCV of $143 billion. By comparison, the New York City CBSA has slightly fewer homes at risk at 723,000, but a significantly higher total RCV totaling $264 billion due to the greater home values and high construction costs in this area.

Corelogic