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3 Strategies To Defend GOP Health Bill: Euphemisms, False Statements and Deleted Comments

[Editor's Note: today's guest post is by the reporters as ProPublica. Affordable health care and coverage are important to many, if not most, Americans. It is reprinted with permission.]

by Charles Ornstein, ProPublica

Earlier this month, a day after the House of Representatives passed a bill to repeal and replace major parts of the Affordable Care Act, Ashleigh Morley visited her congressman's Facebook page to voice her dismay.

"Your vote yesterday was unthinkably irresponsible and does not begin to account for the thousands of constituents in your district who rely upon many of the services and provisions provided for them by the ACA," Morley wrote on the page affiliated with the campaign of Representative Peter King (Republican, New York). "You never had my vote and this confirms why."

The next day, Morley said, her comment was deleted and she was blocked from commenting on or reacting to King's posts. The same thing has happened to others critical of King's positions on health care and other matters. King has deleted negative feedback and blocked critics from his Facebook page, several of his constituents say, sharing screenshots of comments that are no longer there.

"Having my voice and opinions shut down by the person who represents me -- especially when my voice and opinion wasn't vulgar and obscene -- is frustrating, it's disheartening, and I think it points to perhaps a larger problem with our representatives and maybe their priorities," Morley said in an interview.

King's office did not respond to requests for comment.

As Republican members of Congress seek to roll back the Affordable Care Act, commonly called Obamacare, and replace it with the American Health Care Act, they have adopted various strategies to influence and cope with public opinion, which polls show mostly opposes their plan. ProPublica, with our partners at Kaiser Health News, Stat and Vox, has been fact-checking members of Congress in this debate and we've found misstatements on both sides, though more by Republicans than Democrats. The Washington Post's Fact Checker has similarly found misstatements by both sides.

Today, we're back with more examples of how legislators are interacting with constituents about repealing Obamacare, whether online or in traditional correspondence. Their more controversial tactics seem to fall into three main categories: providing incorrect information, using euphemisms for the impact of their actions, and deleting comments critical of them. (Share your correspondence with members of Congress with us.)

Incorrect Information

Representative Vicky Hartzler (Republican, Missouri) sent a note to constituents this month explaining her vote in favor of the Republican bill. First, she outlined why she believes the ACA is not sustainable -- namely, higher premiums and few choices. Then she said it was important to have a smooth transition from one system to another.

"This is why I supported the AHCA to follow through on our promise to have an immediate replacement ready to go should the ACA be repealed," she wrote. "The AHCA keeps the ACA for the next three years then phases in a new approach to give people, states, and insurance markets plenty of time to make adjustments."

Except that's not true.

"There are quite a number of changes in the AHCA that take effect within the next three years," wrote ACA expert Timothy Jost, an emeritus professor at Washington and Lee University School of Law, in an email to ProPublica.

The current law's penalties on individuals who do not purchase insurance and on employers who do not offer it would be repealed retroactively to 2016, which could remove the incentive for some employers to offer coverage to their workers. Moreover, beginning in 2018, older people could be charged premiums up to five times more than younger people -- up from three times under current law. The way in which premium tax credits would be calculated would change as well, benefiting younger people at the expense of older ones, Jost said.

"It is certainly not correct to say that everything stays the same for the next three years," he wrote.

In an email, Hartzler spokesman Casey Harper replied, "I can see how this sentence in the letter could be misconstrued. It's very important to the Congresswoman that we give clear, accurate information to her constituents. Thanks for pointing that out."

Other lawmakers have similarly shared incorrect information after voting to repeal the ACA. Representative Diane Black (Republican, Tennessee) wrote in a May 19 email to a constituent that "in 16 of our counties, there are no plans available at all. This system is crumbling before our eyes and we cannot wait another year to act."

Black was referring to the possibility that, in 16 Tennessee counties around Knoxville, there might not have been any insurance options in the ACA marketplace next year. However, 10 days earlier, before she sent her email, BlueCross BlueShield of Tennessee announced that it was willing to provide coverage in those counties and would work with the state Department of Commerce and Insurance "to set the right conditions that would allow our return."

"We stand by our statement of the facts, and Congressman Black is working hard to repeal and replace Obamacare with a system that actually works for Tennessee families and individuals," her deputy chief of staff Dean Thompson said in an email.

On the Democratic side, the Washington Post Fact Checker has called out representatives for saying the AHCA would consider rape or sexual assault as pre-existing conditions. The bill would not do that, although critics counter that any resulting mental health issues or sexually transmitted diseases could be considered existing illnesses.

Euphemisms

A number of lawmakers have posted information taken from talking points put out by the House Republican Conference that try to frame the changes in the Republican bill as kinder and gentler than most experts expect them to be.

An answer to one frequently asked question pushes back against criticism that the Republican bill would gut Medicaid, the federal-state health insurance program for the poor, and appears on the websites of Representative Garret Graves (Republican, Louisiana) and others.

"Our plan responsibly unwinds Obamacare's Medicaid expansion," the answer says. "We freeze enrollment and allow natural turnover in the Medicaid program as beneficiaries see their life circumstances change. This strategy is both fiscally responsible and fair, ensuring we don't pull the rug out on anyone while also ending the Obamacare expansion that unfairly prioritizes able-bodied working adults over the most vulnerable."

That is highly misleading, experts say.

The Affordable Care Act allowed states to expand Medicaid eligibility to anyone who earned less than 138 percent of the federal poverty level, with the federal government picking up almost the entire tab. Thirty-one states and the District of Columbia opted to do so. As a result, the program now covers more than 74 million beneficiaries, nearly 17 million more than it did at the end of 2013.

The GOP health care bill would pare that back. Beginning in 2020, it would reduce the share the federal government pays for new enrollees in the Medicaid expansion to the rate it pays for other enrollees in the state, which is considerably less. Also in 2020, the legislation would cap the spending growth rate per Medicaid beneficiary. As a result, a Congressional Budget Office review released Wednesday estimates that millions of Americans would become uninsured.

Sara Rosenbaum, a professor of health law and policy at the Milken Institute School of Public Health at George Washington University, said the GOP's characterization of its Medicaid plan is wrong on many levels. People naturally cycle on and off Medicaid, she said, often because of temporary events, not changing life circumstances -- seasonal workers, for instance, may see their wages rise in summer months before falling back.

"A terrible blow to millions of poor people is recast as an easing off of benefits that really aren't all that important, in a humane way," she said.

Moreover, the GOP bill actually would speed up the "natural turnover" in the Medicaid program, said Diane Rowland, executive vice president of the Kaiser Family Foundation, a health care think tank. Under the ACA, states were only permitted to recheck enrollees' eligibility for Medicaid once a year because cumbersome paperwork requirements have been shown to cause people to lose their coverage. The American Health Care Act would require these checks every six months -- and even give states more money to conduct them.

Rowland also took issue with the GOP talking point that the expansion "unfairly prioritizes able-bodied working adults over the most vulnerable." At a House Energy and Commerce Committee hearing earlier this year, GOP representatives maintained that the Medicaid expansion may be creating longer waits for home- and community-based programs for sick and disabled Medicaid patients needing long-term care, "putting care for some of the most vulnerable Americans at risk."

Research from the Kaiser Family Foundation, however, showed that there was no relationship between waiting lists and states that expanded Medicaid. Such waiting lists pre-dated the expansion and they were worse in states that did not expand Medicaid than in states that did.

"This is a complete misrepresentation of the facts," Rosenbaum said.

Graves' office said the information on his site came from the House Republican Conference. Emails to the conference's press office were not returned.

The GOP talking points also play up a new Patient and State Stability Fund included in the AHCA, which is intended to defray the costs of covering people with expensive health conditions. "All told, $130 billion dollars would be made available to states to finance innovative programs to address their unique patient populations," the information says. "This new stability fund ensures these programs have the necessary funding to protect patients while also giving states the ability to design insurance markets that will lower costs and increase choice."

The fund was modeled after a program in Maine, called an invisible high-risk pool, which advocates say has kept premiums in check in the state. But Senator Susan Collins (Republican, Maine) says the House bill's stability fund wasn't allocated enough money to keep premiums stable.

"In order to do the Maine model 2014 which I've heard many House people say that is what they're aiming for -- it would take $15 billion in the first year and that is not in the House bill," Collins told Politico. "There is actually $3 billion specifically designated for high-risk pools in the first year."

Deleting Comments

Morley, 28, a branded content editor who lives in Seaford, New York, said she moved into Representative King's Long Island district shortly before the 2016 election. She said she did not vote for him and, like many others across the country, said the election results galvanized her into becoming more politically active.

Earlier this year, Morley found an online conversation among King's constituents who said their critical comments were being deleted from his Facebook page. Because she doesn't agree with King's stances, she said she wanted to reserve her comment for an issue she felt strongly about.

A day after the House voted to repeal the ACA, Morley posted her thoughts. "I kind of felt that that was when I wanted to use my one comment, my one strike as it would be," she said.

By noon the next day, it had been deleted and she had been blocked.

"I even wrote in my comment that you can block me but I'm still going to call your office," Morley said in an interview.

Some negative comments about King remain on his Facebook page. But King's critics say his deletions fit a broader pattern. He has declined to hold an in-person town hall meeting this year, saying, "to me all they do is just turn into a screaming session," according to CNN. He held a telephonic town hall meeting but only answered a small fraction of the questions submitted. And he met with Liuba Grechen Shirley, the founder of a local Democratic group in his district, but only after her group held a protest in front of his office that drew around 400 people.

"He's not losing his health care," Grechen Shirley said. "It doesn't affect him. It's a death sentence for many and he doesn't even care enough to meet with his constituents."

King's deleted comments even caught the eye of Andy Slavitt, who until January was the acting administrator of the Centers for Medicare and Medicaid Services. Slavitt has been traveling the country pushing back against attempts to gut the ACA.

.@RepPeteKing, are you silencing your constituents who send you questions? Assume ppl in district will respond if this is happening.

-- Andy Slavitt (@ASlavitt) May 12, 2017

Since the election, other activists across the country who oppose the president's agenda have posted online that they have been blocked from following their elected officials on Twitter or commenting on their Facebook pages because of critical statements they've made about the AHCA and other issues.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.


We Fact-Checked Lawmakers' Letters To Constituents on Health Care

[Editor's Note: today's guest post, by the reporters at ProPublica, explores the problem of "fake news" and whether elected officials contribute to the problem while discussing health care legislation. The article was originally published yesterday, and is reprinted with permission. Interested persons wanting to help ProPublica's ongoing fact-checking efforts can share with ProPublica messages you have received from your elected officials.]

by Charles Ornstein, ProPublica

When Louisiana resident Andrea Mongler wrote to her senator, Bill Cassidy, in support of the Affordable Care Act, she wasn't surprised to get an email back detailing the law's faults. Cassidy, a Republican who is also a physician, has been a vocal critic.

"Obamacare" he wrote in January, "does not lower costs or improve quality, but rather it raises taxes and allows a presidentially handpicked 'Health Choices Commissioner' to determine what coverage and treatments are available to you."

There's one problem with Cassidy's ominous-sounding assertion: It's false.

The Affordable Care Act, commonly called Obamacare, includes no "Health Choices Commissioner." Another bill introduced in Congress in 2009 did include such a position, but the bill died 2014 and besides, the job as outlined in that legislation didn't have the powers Cassidy ascribed to it.

As the debate to repeal the law heats up in Congress, constituents are flooding their representatives with notes of support or concern, and the lawmakers are responding, sometimes with form letters that are misleading. A review of more than 200 such letters by ProPublica and its partners at Kaiser Health News, Stat and Vox, found dozens of errors and mis-characterizations about the ACA and its proposed replacement. The legislators have cited wrong statistics, conflated health care terms and made statements that don't stand up to verification.

It's not clear if this is intentional or if the lawmakers and their staffs don't understand the current law or the proposals to alter it. Either way, the issue of what is wrong -- and right -- about the current system has become critical as the House prepares to vote on the GOP's replacement bill today.

"If you get something like that in writing from your U.S. senator, you should be able to just believe that," said Mongler, 34, a freelance writer and editor who is pursuing a master's degree in public health. "I hate that people are being fed falsehoods, and a lot of people are buying it and not questioning it. It's far beyond politics as usual."

Cassidy's staff did not respond to questions about his letter.

Political debates about complex policy issues are prone to hyperbole and health care is no exception. And to be sure, many of the assertions in the lawmakers' letters are at least partially based in fact.

Democrats, for instance, have been emphasizing to their constituents that millions of previously uninsured people now have medical coverage thanks to the law. They say insurance companies can no longer discriminate against millions of patients with pre-existing conditions. And they credit the law with allowing adults under age 26 to stay on their parents' health plans. All true.

For their part, Republicans criticize the law for not living up to its promises. They say former President Obama pledged that people could keep their health plans and doctors and premiums would go down. Neither has happened. They also say that insurers are dropping out of the market and that monthly premiums and deductibles (the amount people must pay before their coverage kicks in) have gone up. All true.

But elected officials in both parties have incorrectly cited statistics and left out important context. We decided to take a closer look after finding misleading statements in an email Senator Roy Blunt (R-Missouri) sent to his constituents. We solicited letters from the public and found a wealth of misinformation, from statements that were simply misleading to whoppers. More Republicans fudged than Democrats, though both had their moments.

An aide to Rep. Dana Rohrabacher (R-California) defended his hyperbole as "within the range of respected interpretations."

"Do most people pay that much attention to what their congressman says? Probably not," said Sherry Glied, dean of New York University's Robert F. Wagner Graduate School of Public Service, who served as an assistant Health and Human Services secretary from 2010 to 2012. "But I think misinformation or inaccurate information is a bad thing and not knowing what you're voting on is a really bad thing."

We reviewed the emails and letters sent by 51 senators and 134 members of the House within the past few months. Here are some of the most glaring errors and omissions:

Rep. Pat Tiberi (R-Ohio) incorrectly cited the number of Ohio counties that had only one insurer on the Affordable Care Act insurance exchange.

What he wrote: "In Ohio, almost one third of counties will have only one insurer participating in the exchange."

What's misleading: In fact, only 23 percent (less than one quarter) had only one option, according to an analysis by the Kaiser Family Foundation.

His response: A Tiberi spokesperson defended the statement. "The letter says 'almost' because only 9 more counties in Ohio need to start offering only 1 plan on the exchanges to be one third."

Why his response is misleading: Ohio has 88 counties. A 10 percent difference is not "almost."

Representative Kevin Yoder (R-Kansas) said that the quality of health care in the country has declined because of the ACA, offering no proof.

What he wrote: "Quality of care has decreased as doctors have been burdened with increased regulations on their profession."

Why it's misleading: Some data shows that health care has improved after the passage of the ACA. Patients are less likely to be readmitted to a hospital within 30 days after they have been discharged, for instance. Also, payments have been increasingly linked to patients' outcomes rather than just the quantity of services delivered. A 2016 report by the Commonwealth Fund, a health care nonprofit think tank, found that the quality care has improved in many communities following the ACA.

His response: None.

Representative Anna Eshoo (D-California) misstated the percentage of Medicaid spending that covers the cost of long-term care, such as nursing home stays.

What she wrote: "It's important to note that 60 percent of Medicaid goes to long-term care and with the evisceration of it in the bill, this critical coverage is severely compromised."

What's misleading: Medicaid does not spend 60 percent of its budget on long-term care. The figure is closer to a quarter, according to the Center on Budget and Policy Priorities, a liberal think tank. Medicaid does, however, cover more than 60 percent of all nursing home residents.

Her response: Eshoo's office said the statistic was based on a subset of enrollees who are dually enrolled in Medicaid and Medicare. For this smaller group, 62 percent of Medicaid expenditures were for long-term support services, according to the Kaiser Family Foundation.

What's misleading about the response: Eshoo's letter makes no reference to this population, but instead refers to the 75 million Americans on Medicaid.

Representative Chuck Fleischmann (R-Tennessee) pointed to the number of uninsured Americans as a failure of the ACA, without noting that the law had dramatically reduced the number of uninsured.

What he wrote: "According to the U.S. Census Bureau, approximately thirty-three million Americans are still living without health care coverage and many more have coverage that does not adequately meet their health care needs."

Why it's misleading: The actual number of uninsured in 2015 was about 29 million, a drop of 4 million from the prior year, the Census Bureau reported in September. Fleischmann's number was from the previous year.

Beyond that, reducing the number of uninsured by more than 12 million people from 2013 to 2015 has been seen as a success of Obamacare. And the Republican repeal-and-replace bill is projected to increase the number of uninsured.

His response: None.

Rep. Joseph P. Kennedy III (D-Massachusetts) overstated the number of young adults who were able to stay on their parents' health plan as a result of the law.

What he wrote: The ACA "allowed 6.1 million young adults to remain covered by their parents' insurance plans."

What's misleading: A 2016 report by the U.S. Department of Health and Human Services, released during the Obama administration, however, pegged the number at 2.3 million.

Kennedy may have gotten to 6.1 million by including 3.8 million young adults who gained health insurance coverage through insurance marketplaces from October 2013 through early 2016.

His response: A spokeswoman for Kennedy said the office had indeed added those two numbers together and would fix future letters.

Representative Blaine Luetkemeyer (R-Missouri.) said that 75 percent of health insurance marketplaces run by states have failed. They have not.

What he said: "Nearly 75 percent of state-run exchanges have already collapsed, forcing more than 800,000 Americans to find new coverage."

What's misleading: When the ACA first launched, 16 states and the District of Columbia opted to set up their own exchanges for residents to purchase insurance, instead of using the federal marketplace, known as Healthcare.gov.

Of the 16, four state exchanges, in Oregon, Hawaii, New Mexico and Nevada, failed, and Kentucky plans to close its exchange this year, according to a report by the House Energy and Commerce Committee. While the report casts doubt on the viability of other state exchanges, it is clear that 3/4 have not failed.

His response: None.

Representative Dana Rohrabacher (R-California) overstated that the ACA "distorted labor markets," prompting employers to shift workers from full-time jobs to part-time jobs.

What he said: "It has also, through the requirement that employees that work thirty hours or more be considered full time and thus be offered health insurance by their employer, distorted the labor market."

What's misleading: A number of studies have found little to back up that assertion. A 2016 study published by the journal Health Affairs examined data on hours worked, reason for working part time, age, education and health insurance status. "We found only limited evidence to support this speculation" that the law led to an increase in part-time employment, the authors wrote. Another study found much the same.

In addition, PolitiFact labeled as false a statement last June by President Donald Trump in which he said, "Because of Obamacare, you have so many part-time jobs."

His response: Rohrabacher spokesman Ken Grubbs said the congressman's statement was based on an article that said, "Are Republicans right that employers are capping workers' hours to avoid offering health insurance? The evidence suggests the answer is 'yes,' although the number of workers affected is fairly small."

We pointed out that "fairly small" was hardly akin to distorting the labor market. To which Grubbs replied, "The congressman's letter is well within the range of respected interpretations. That employers would react to Obamacare's impact in such way is so obvious, so nearly axiomatic, that it is pointless to get lost in the weeds," Grubbs said.

Representative Mike Bishop (R-Michigan) appears to have cited a speculative 2013 report by a GOP-led House committee as evidence of current and future premium increases under the ACA.

What he wrote: "Health insurance premiums are slated to increase significantly. Existing customers can expect an average increase of 73 percent, while the average change due to Obamacare for those purchasing a new plan will be a 96 percent increase in premiums. The average cost for a new customer in the individual market is expected to rise $1,812 per year."

What's misleading: The figures seem to have come from a report issued before the Obamacare insurance marketplaces launched and before 2014 premiums had been announced. The letter implies these figures are current. In fact, premium increases by and large have been moderate under Obamacare. The average monthly premium for a benchmark plan, upon which federal subsidies are calculated, increased about 2 percent from 2014 to 2015; 7 percent from 2015 to 2016; and 25 percent this year, for states that take part in the federal insurance marketplace.

His response: None

Representative Dan Newhouse (R-Washington) misstated the reasons why Medicaid costs per person were higher than expected in 2015.

What he wrote: "A Medicaid actuarial report from August 2016 found that the average cost per enrollee was 49 percent higher than estimated just a year prior 2014 in large part due to beneficiaries seeking care at more expensive hospital emergency rooms due to difficulty finding a doctor and long waits for appointments."

What's misleading: The report did not blame the higher costs on the difficulty patients had finding doctors. Among the reasons the report did cite: patients who were sicker than anticipated and required a raft of services after being previously uninsured. The report also noted that costs are expected to decrease in the future.

His response: None

Senator Dick Durbin (D-Ill.) wrongly stated that family premiums are declining under Obamacare.

What he wrote: "Families are seeing lower premiums on their insurance, seniors are saving money on prescription drug costs, and hospital readmission rates are dropping."

What's misleading: Durbin's second and third points are true. The first, however, is misleading. Family insurance premiums have increased in recent years, although with government subsidies, some low- and middle-income families may be paying less for their health coverage than they once did.

His response: Durbin's office said it based its statement on an analysis published in the journal Health Affairs that said that individual health insurance premiums dropped between 2013 and 2014, the year that Obamacare insurance marketplaces began. It also pointed to a Washington Post opinion piece that said that premiums under the law are lower than they would have been without the law.

Why his response is misleading: The Post piece his office cites states clearly, "Yes, insurance premiums are going up, both in the health care exchanges and in the employer-based insurance market."

Representative Susan Brooks (R-Ind.) told constituents that premiums nationwide were slated to jump from 2016 to 2017, but failed to mention that premiums for some plans in her home state actually decreased.

What she wrote: "Since the enactment of the ACA, deductibles are up, on average, 63 percent. To make matters worse, monthly premiums for the "bronze plan" rose 21 percent from 2016 to 2017. 2026 Families and individuals covered through their employer are forced to make the difficult choice: pay their premium each month or pay their bills."

What's misleading: Brooks accurately cited national data from the website HealthPocket, but her statement is misleading. Indiana was one of two states in which the premium for a benchmark health plan -- the plan used to calculate federal subsidies -- actually went down between 2016 and 2017. Moreover, more than 80 percent of marketplace consumers in Indiana receive subsidies that lowered their premium costs. The HealthPocket figures refer to people who do not qualify for those subsidies.

Her response: Brooks' office referred to a press release from Indiana's Department of Insurance, which took issue with an Indianapolis Star story about premiums going down. The release, from October, when Vice President Mike Pence was Indiana's governor, said that the average premiums would go up more than 18 percent over 2016 rates based on enrollment at that time. In addition, the release noted, 68,000 Indiana residents lost their health plans when their insurers withdrew from the market.

Why her response is misleading: For Indiana consumers who shopped around, which many did, there was an opportunity to find a cheaper plan.

Senator Ron Wyden (D-Ore.) incorrectly said that the Republican bill to repeal Obamacare would cut funding for seniors in nursing homes.

What he wrote: "It's terrible for seniors. Trumpcare forces older Americans to pay 5 times the amount younger Americans will -- an age tax -- and slashes Medicaid benefits for nursing home care that two out of three Americans in nursing homes rely on."

What's misleading: Wyden is correct that the GOP bill, known as the American Health Care Act, would allow insurance companies to charge older adults five times higher premiums than younger ones, compared to three times higher premiums under the existing law. However, it does not directly slash Medicaid benefits for nursing home residents. It proposes cutting Medicaid funding and giving states a greater say in setting their own priorities. States may, as a result, end up cutting services, jeopardizing nursing home care for poor seniors, advocates say, because it is one of the most expensive parts of the program.

His response: Taylor Harvey, a spokesman for Wyden, defended the statement, noting that the GOP health bill cuts Medicaid funding by $880 billion over 10 years and places a cap on spending. "Cuts to Medicaid would force states to nickel and dime nursing homes, restricting access to care for older Americans and making it a benefit in name only," he wrote.

Why his response is misleading: The GOP bill does not spell out how states make such cuts.

Representative Derek Kilmer (D-Washington) misleadingly said premiums would rise under the Obamacare replacement bill now being considered by the House.

What he wrote: "It's about the 24 million Americans expected to lose their insurance under the Trumpcare plan and for every person who will see their insurance premiums rise 2014 on average 10-15 percent."

Why it's misleading: First, the Congressional Budget Office did estimate that the GOP legislation would cover 24 million fewer Americans by 2026. But not all of those people would "lose their insurance." Some would choose to drop coverage because the bill would no longer make it mandatory to have health insurance, as is the case now.

Second, the budget office did say that in 2018 and 2019, premiums under the GOP bill would be 15-20 percent higher than they would have been under Obamacare because the share of unhealthy patients would increase as some of those who are healthy drop out. But it noted that after that, premiums would be lower than under the ACA.

His response: None.

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The Boston Keep ACA Rally on January 15 And Senator Warren's Remarks

Crowd gathering an hour before Boston healthcare rally. January 15,, 2017. click to view larger version On Sunday January 15, 2017 I attended the healthcare rally in Boston at iconic Faneuil Hall. It was one of a dozen rallies around the United States. Several people spoke, including Boston Mayor Marty Walsh, U.S. Senator Elizabeth Warren, activist Sarah Grow, Carla Leviano, and U.S. Senator Edward Markey. The attendance was great and far exceeded the capacity for the auditorium inside Faneuil Hall, where it was originally planned.

The event continued outside with what I estimated at least five thousand people standing in the cold 27 degrees Fahrenheit temperature. This blog post contains several photographs I took. The photo on the right shows the crowd gather more than hour before the official 1:00 pm start of the rally.

Carla Lievano, a single-mother whose family is on MassHealth, is worried about losing her health benefits if the Affordable Care Act is repealed. She said:

"I could lose my health benefits... I’m very low income. I don’t know how I would take care of [my daughter]..."

Senator Warren speaking at January 15, 2017 healthcare rally in Boston. Click to view larger version Grow shared the story of her mother's battle against cancer, and how the Affordable Care Act (ACA and a//k/a Obamacare) saved her mother's life. Her mother was able to find a replacement plan under the ACA. Below is the transcript of Senator Elizabeth Warren's remarks (courtesy of the Boston Globe):

"For eight years, Republicans in Congress have complained about health care in America, heaping most of the blame on President Obama. Meanwhile, they’ve hung out on the sidelines making doomsday predictions and cheering every stumble, but refusing to lift a finger to actually improve our health care system.

The GOP is about to control the White House, Senate, and House. So what’s the first thing on their agenda? Are they working to bring down premiums and deductibles? Are they making fixes to expand the network of doctors and the number of plans people can choose from? Nope. The number one priority for congressional Republicans is repealing the Affordable Care Act and breaking up our health care system while offering zero solutions.

Their strategy? Repeal and run.

Many Massachusetts families are watching this play out, worried about what will happen — including thousands from across the Commonwealth that I joined at Faneuil Hall on Sunday to rally in support of the ACA. Hospitals and insurers are watching too, concerned that repealing the ACA will create chaos in the health insurance market and send costs spiraling out of control.

Health care reform in Massachusetts wasn’t partisan. Democrats, Republicans, business leaders, hospitals, insurers, doctors, and consumers all came together behind a commitment that every single person in our Commonwealth deserves access to affordable, high-quality care. When Republican Governor Mitt Romney signed Massachusetts health reform into law in 2006, our state took huge strides toward offering universal health care coverage and financial security to millions of Bay State residents.

That law was a major step forward. Today, more than 97 percent of Bay Staters are covered — the highest rate of any state in the country.

But Massachusetts still has a lot to lose if the ACA is repealed. One big reason for our state’s health care success is that we took advantage of the new opportunities offered under the ACA. In addition to making care more accessible and efficient, our state expanded Medicaid, using federal funds to help even more people. And we combined federal and state dollars to help reduce the cost of insurance on the Health Connector.

When the ACA passed, Massachusetts already had in place some of the best consumer protections in the nation. But the ACA still made a big difference. It strengthened protections for people in Massachusetts with pre-existing conditions, allowed for free preventive care visits, and — for the first time in our state — banned setting lifetime caps on benefits.

If the ACA is repealed, our health care system would hang in the balance. Half a million people in the Commonwealth would risk losing their coverage. People who now have an iron-clad guarantee that they can’t be turned away due to their pre-existing conditions or discriminated against because of their gender could lose that security. Preventive health care, community health centers, and rural hospitals could lose crucial support. In short, the Massachusetts health care law is a big achievement and a national model, but it also depends on the ACA and a strong partnership with the federal government.

If the cost-sharing subsidies provided by the ACA are slashed to zero, Massachusetts will have a tough time keeping down the cost of plans on the Health Connector. The state can’t make funds appear out of thin air to help families on the Medicaid expansion if Republicans yank away support. And our ability to address the opioid crisis will be severely hampered if people lose access to health insurance or if the federal funding provided through the Medicaid waiver disappears. Even in states with strong health care systems — states like Massachusetts — the ACA is critical.

The current system isn’t perfect — not by a long shot. There are important steps Congress could take to lower deductibles and premiums, to expand the network of doctors people can see on their plans, and to increase the stability and predictability of the market. We should be working together to make health care better all across the country, just like we’ve tried to do here in Massachusetts.

This doesn’t need to be a partisan fight. But if congressional Republicans continue to pursue repeal of the ACA with nothing more than vague assurances that they might — someday — think up a replacement plan, the millions of Americans who believe in guaranteeing people’s access to affordable health care will fight back every step of the way.

Repeal and run is for cowards."

Want to read more? Try these hashtags on social networking sites: #repealandrun #ourfirststand #savehealthcare #CareNotChaos. Below are more photos from Sunday's event in Boston.

Protester sign at Boston healthcare rally
Protester sign. Boston healthcare rally. 1/15/17

Protester sign at Boston healthcare rally
Protester sign at Boston healthcare rally. 1/15/17

Boston Mayor Marty Walsh speaking at healthcare rally January 15, 2017
Mayor Marty Walsh speaking at healthcare rally. 1/15/17

View of crowd at Boston healthcare rally January 15, 2017
View from crowd at Boston healthcare rally. 1/15/17


Survey: Bankers Expect Consumers To Use Wearable And Smart Home Devices For Banking

Pegasystems logo Would you use a smart watch, fitness band, or other wearable device for banking? How about your smart television or refrigerator? Many bankers think you will, and are racing to integrate a broader range of mobile devices and technologies into their banking services. A recent survey of financial executives found that:

"... 20 per cent expect it to be common for consumers to make financial transactions using wearables within one year, 59 per cent within two years and 91 per cent within five years... 87 per cent expect it to be common for consumers to make financial transactions using Smart TVs and 68 per cent via home appliances."

The survey included 500 executives globally in several financial areas: banking, financial advice, consumer finance, investment management, insurance, and payments. So, consumers are likely to see these changes not just at your bank, but in a variety of financial and insurance transactions. Here's why:

"... too many banks are out of touch with what customers really want: one survey found 62 per cent of retail banking executives believed their bank offered excellent service compared to just 35 per cent of customers.... Millennials will have annual spending power of US$1. trillion [in 2020] and represent 30 per cent of total retail sales... Millennials not only have an appetite for disruptive new technologies but also an affinity with brand-savvy digital leaders... The Millennial Disruption Index, a three-year study of industry disruption conducted by Viacom subsidiary Scratch, found that banking was most vulnerable to disruption..."

The report discussed the desire by executives to serve customers via a variety of methods:

"Today’s customers expect a flawless end-to-end experience across all channels, yet fewer than 4 per cent of our respondents say they have achieved full omni-channel integration... by 2020, 89 per cent of our respondents expect to achieve full omni-channel integration. This either suggests a massive surge of investment over the next five years – or an industry in denial about the scale of the task ahead... 70 per cent expect video chat to largely replace branch appointments. Indeed, six out of ten now believe a digital-only channel model is viable."

Bankers view the Internet-of-Things (IoT) as both a collection of endpoint devices to provide services through, and a rich source of data:

"...93 per cent agree that finding innovative ways to provide value-added services to customers based on data-driven insight will be crucial to long-term success... 86 per cent agree that once consumers recognize the data potential of the IoT they will increasingly seek to benchmark their own behavior against their peers..."

Banks will probably develop more non-human (e.g., self-service) interfaces:

"... 76 per cent agree the widespread use of virtual assistants such as Siri on the iPhone means customers are more willing to engage with automated assistance and advice... almost three quarters of our respondents agree that in the future customers will interact with a human-like avatar..."

Another technology being considered:

"... 60 per cent [of survey respondents] believe that blockchain, a distributed public ledger which can securely record any information and the ownership of any asset, will prove to be the most significant technology development to affect financial services since the Internet and 45 per cent think the combination of blockchain wallets and peerto-peer (P2P) lending could herald the end of banking as we know it... 12 per cent expect the settlement of insurance claims using IoT data, blockchain and smart contracts to be mainstream practice within two years and 74 per cent expect it to be mainstream by 2025..."

Don't expect your bank to provide these new services next week or next month. It will take them time. New systems must be built, tested, debugged, and integrated with legacy computer systems and processes. All of this suggests that to fund their investments in innovation projects, banks probably won't lower their retail banking prices and fees (e.g., checking, savings, etc.) any time soon. While writing this blog the past 8+ years, I've found it wise to always keep an eye on the banks.

Download "The Future of Retail Financial Services" report by Cognizant, Marketforce, and Pegasystems.


Police Officer Charged with Insurance Fraud

[Editor's Note: I am happy to feature a post by guest author Arkady Bukh. He leads the law firm of Bukh & Associates, PLLC which specializes in criminal law, family law, and several areas of civil law. He is a frequent contributor on CNN, Wired, Forbes, Huffington Post, and several other sites. Today's post is about insurance fraud.]

By Arkady Bukh, Esq.

Occasionally, insurance claims are more fiction that reality.

Adjusters know that not every case is as it seems. Some are complex and others bizarre — if not downright creative. Sometimes it appears that the protected have no remorse when it comes to submitting claims that no sane and rational person would think about.

Insurance fraud claims probably require the greatest ingenuity. According to the Insurance Information Institute, fraud losses are over $30 billion a year. Add-on costs for health care fraud, $77 billion to $359 billion, and the damages add up quickly.

Insurance fraud falls into two types: hard and soft.

Hard fraud typically means someone deliberately creates a bogus claim application. Soft fraud is more of a crime of chance — padding a legitimate claim, changing a home location so that the insurance premiums are lower — that sort of thing.

Regardless if it’s hard or soft fraud, it’s all illegal and accounts for 5% to 20% of insurers’ claims costs.

The good news is that roughly 95% of insurers use antifraud technology that makes it easier to catch the crooks.

The best technology though doesn't stop some individuals from filing claims that shouldn’t have been filed.

Sometimes though the crooks’ stupidity trips them up. Here are two examples:

The Golfer

In a discussion on Quora.com, the online Q&A forum, one case of insurance fraud stands out.

An executive for a publicly traded corporation was big on golfing. As most serious amateurs, he was also big on the new clubs and all the gadgetry that golfers like to purchase.

The executive filed a multi-million dollar lawsuit for disability, claiming that he had fallen and hurt his back while on a business trip out of town.

Several private investigator firms, hired by our fraudster’s employer, were unable to gather information to disprove the disability claim.

Then, a creative Private Investigator came along and figured he could trap the alleged swindler using his love of golf against him.

Running a fake ad in the local newspaper, the PI announced that a new golf club manufacturer was opening up and would be giving away brand-new sets of clubs in exchange for a testimonial.

The VP saw the ad, made the call, and the PI came to the suspect’s house to measure him for his new clubs.

There was just one catch. The PI wanted to take some photographs of the VP using the clubs to go along with the testimonial.

The VP obliged, swung the clubs while the PI snapped away, and the rest of the story can be figured out quickly enough.

The Cop

Perpetrators of workers’ compensation fraud can be found in any job. Law enforcement officers aren’t immune.

Jaime Robinson, a veteran Pasadena police officer, found her undoing during the 2014 craze — ALS’s Ice Bucket Challenge.

Robinson was away from work on a disability claim when someone with a camera captured her on video showing her pouring a bucket of ice water on a fellow cop.

The five-gallon bucket, weighing in at 42 pounds, wasn’t too much for her to lift despite receiving over $116,000 for the past year in disability payments.

Charged with four counts of insurance fraud, Robinson faces a maximum of six years and four months in prison if she’s convicted.


Fraudulent Insurance Claims Affect Mobile Device Users

The Best Techie blog published a very interesting post about how easy it is for criminals to file fraudulent insurance claims for mobile devices. The problem isn't just the ease that the fraud is committed, but also that consumers probably aren't aware of fraud claims submitted against their accounts until they file a valid insurance claim:

"If you use one of the major carriers in the U.S. such as AT&T, Verizon, T-Mobile, and/or Sprint the insurance you buy comes from a company called Asurion Insurance Services, Inc... : it appears Asurion’s claim system is very easy to defraud... The only real deterrent in the claim system is that you need to sign an affidavit and provide a photo ID but if high school students can get fake IDs, I’d imagine for a fraudster obtaining a fake ID to scan is laughably easy..."

The I've Been Mugged blog has reported about Asurion. When evaluating mobile insurance offers, it is wise for consumers to do the math first. You'll want to decide if you want malware protection, and if the one- or two-year total of monthly insurance premiums exceeds the cost of your mobile device.

According to the Best Techie report, the fraudster used a combination of the victim's name and valid phone number with a different residential address. You'd think that Asurion would have easily spotted that and contacted their customer at their current address to confirm the claim and the new address.

Consumers pay good money for mobile device insurance, and deserve better protection against insurance fraud. What are your opinions?


Considering A Cruise Ship Vacation? What Consumers Need To Know

It's the middle of Winter, and you are probably tired of the cold, the snow, or both. At this time of year, many people consider warm weather vacations.Last week, a friend asked about cruise ship vacations:

"Do you have a travel agent you use for cruises? A group of us who are turning 60 this year are thinking of taking a cruise to celebrate. Maybe a repositioning cruise. Are there suites for 5 people? Any advice is most welcome."

Cruise ship vacations are popular. A cruise is a good way to sample several destination ports, and return to the ports you like for a longer, land-based visit. You can board a cruise ship near where you live, or sail from a popular travel destination.

According to the industry group Cruise Lines International Association (CLIA), about 20 million consumers went on cruise ship vacations globally during 2012.There are about 60 cruise lines with 400 total ships. The industry generated about 356,000 jobs paying $17.4 billion in wages to American workers.

It's not just more people cruising. Experienced cruise customers also book cruise itineraries with longer durations. The CLIA surveyed travel agents and 37 percent reported an increase in books of longer cruises (e.g., 14 to 100 days duration). If you have the time and money, several cruise lines offer itineraries of 30 days or longer.

I was happy to answer my friend's questions. Nobody wants to overpay or have their wallet "mugged" during a vacation. My wife and I have sailed on 22 cruise ship vacations to many parts of the world. For several years, i ran a cruise group of interracial couples and families. At a major creative advertising agency, I worked on web projects for a cruise line client. Interesting publications include the book, "Devils On The Deep Blue Sea," a history of the cruise industry, and industry magazines such as Porthole and Cruise Travel. So, I know the industry well and feel pretty qualified to give advice and answer my friend's questions.

1. Your interests. Decide what type of vacation you and your group like. Some people like as much beach time as possible. Others like golf. Others like Eco-tours. Others like active sports, such as hiking, bicycling, surfing, snorkeling, and scuba diving. Some like motorized excursions including off-road vehicles. Pick a cruise line and itinerary that fits your interests. Royal Caribbean focuses upon active sports.

2. Themed cruises. If you group has a specific interest, there is often an itinerary for that. So you can find singles cruises, NASCAR cruises, cruises for nudists, gay/lesbian cruises, and so forth. Carnival has the best night clubs and discos. It also has the best Las Vegas style shows. Celebrity Cruises is known for having the best food. Disney focuses upon families with children. All ships in Royal Caribbean's fleet feature rock-climbing walls. Some include specialize pools you can surf in. A good place to start looking for theme cruises is www.cruisecritic.com. Other places to look include Cruise Addicts and Cruise 411.

3. Cruise lines. Just like land-based hotels, there are entry/discount, mid-range, and luxury cruise lines. Entry/discount: Carnival, Royal Caribbean, Disney, Costa, and Norwegian. Mid-range: Holland America, Princess, Celebrity, and MSC. Luxury: Crystal, Cunard, Seabourn, Silversea, Windstar, Viking, and Avalon. The entry/discount cruise lines focus upon people under 40. The mid-range cruise lines focus on people 55+. The luxury cruise lines tend to have smaller ships with 150 or 200 passengers. The entry/discount cruise lines tend to have larger ships, with as many as four or five thousand passengers.

The primary language spoken varies by cruise line. For example, when we sailed on Costa and MSC in the Mediterranean, we noticed that the primary language spoken on board was Italian. We do not speak Italian and felt we had a poor experience on board these two cruise lines.

4. River or ocean cruises? My friend and her group seemed interested in ocean cruises. There are also river cruises. The two types are ENTIRELY different. Rive cruises are all about the shore excursions: you get off the ship every day, Usually, the shore excursions and tips are included in one cruise price. Viking River Cruises and Avalon Waterways focus on river cruises. Some destination ports are only acessible via river cruises.

5. Departure ports. When selecting an itinerary, some people start with the departure port because that is often a city you may want to explore its land-based attractions, restaurants, and sights. Then, you can get good and juiced before you board the cruise ship. When traveling in Winter, it is always wise to arrive at the departure city 2 days before the ship sails, in case your flight is delayed by bad weather. Departure ports we have sailed from: Amsterdam, Boston, Ft. Lauderdale, Honolulu, Los Angeles, Miami, New Orleans, San Juan (Puerto Rico), Seattle, and Venice (Italy).

6. How the industry works: pay their minimum deposit. Buy travel insurance at that time, too. The full amount is typically due 90 days before the ship sails. You will probably set up an account through the cruise line’s website to indicate in your profiles any preferences (e.g., non smoking, diets, physical limitations, etc.). After you have paid for your cruise, then you can select (and pay for) the optional shore excursions in each destination port.

Similar to airlines, all of the major cruise lines have rewards programs for frequent travels. Some consumers book travel with a single cruise line to generate as many rewards points as quickly as possible. Some pick itineraries based upon where they want to go, and then look for cruise lines sailing there.

Some consumers wait until the last minute and book whatever empty cabins are available. This is a good strategy for consumers (e.g., retirees) with flexible schedules who can travel on a moment's notice. It's a good way to get a cabin cheap, but you may not get the cabin location you want on a ship. This strategy works well if you live reasonably close to the departure port. If not, what you saved on a low-priced cruise may be eaten up by higher, last-minute, air fares.

7. Selecting your cabin: there is no single correct way. After selecting a ship or itinerary, some people select a cabin type: inside, outside, balcony, suite. Others pick a specific cabin on a ship they already know. All of the cruise lines have websites that present deck plans. My advice: no matter what type of cabin, you do NOT want a cabin underneath the disco, dining room, or lido deck pool... unless you like hearing footsteps overhead.

8. Use a travel agent? Some in your group will likely ask: are travel agents necessary? While you can do it all yourself and book your cruise through a cruise line’s website, you may want more service or have questions. Travel agents are there to answer your questions. They can give you the kinds of advice I mentioned above, recommend hotels in departure cities, often get you a lower price than the cruise line’s website, and book all elements of your vacation: the cruise, hotels, air travel, and transfers between airports, hotels, and cruise ship terminals. Whenever we work with a travel agent, we have in mind a budget and the probable retail price for the itinerary we want. We use a travel agent located nearby, so we can visit their office.

9. Read cruise reviews. Once you've selected 3 or 4 itineraries and ships, then it makes sense to read cruise reviews about the ships or itineraries you are considering. Many passengers write and post online their reviews. This is a good way to learn about the advantages and disadvantages of a ship or itinerary. A good place to read passenger-written cruise reviews is the Community section at the Cruise Critic site. Select the cruise line and then the cruise ship you are interested in.

As I said above, my wife and I have sailed on 22 cruises; both ocean and river cruises; and to most parts of the world: Mediterranean, Alaska, Hawaii, Bermuda, Panama Canal, the Caribbean, and northern South America. We have sailed on almost all of the above entry and mid-range cruise lines. We’ve only sailed on one of the luxury cruise lines.

Learn more: 8 tips about cruise ship vacations.

My friend really appreciated this detailed reply. If you have sailed on cruise ship vacations, what are your favorite itineraries? Your favorite destinations? Favorite ships? Any advice you have for new cruisers?


What Data Does Your Web Browser Collect About You?

While many people use mobile apps, most people use web browsers to access the Internet. Last week, Mozilla released a new version of its popular Firefox browser. If you use this browser and haven't reviewed some of its newer features, you probably should. The web browser software contains several options that collect data about how you use the Interenet, and then transmits this information back to the developers at Mozilla.

To view these options, open the Firefox browser on your computer and open the Tools drop-down menu. Then, select Options, then Data Choices. You'll see:

  • Telemetry
  • Firefox Health Report
  • Crash Reporter

What are these options? What data do they collect? First, Firefox defines Telemetry as:

"Usage statistics or "Telemetry" is a feature in Firefox that sends Mozilla usage, performance, and responsiveness statistics about user interface features, memory and hardware configuration. Your IP address is also collected as a part of a standard web log. Usage statistics are transmitted using SSL and help us improve future versions of Firefox. Once sent to Mozilla, usage statistics are aggregated and made available to a broad range of developers, including both Mozilla employees and public contributors. This feature is turned on by default in Nightly, Developer Edition, Aurora and Beta builds of Firefox to help those users provide feedback to Mozilla. In the general release version of Firefox, this feature is turned off by default."

Are you comfortable with your browser collecting and transmiting this data? That's your choice. The default for this option is off, so you have to opt-in or enable it. To enable it, click the check box next to Telemetry in the pop-up Options box.

The second option is the Firefox Health Report:

"Firefox Health Report (FHR) is designed to provide you with insights about your browser's stability and performance and with support tips should you experience issues, such as high crash rates or slow startup times. Mozilla collects and aggregates your data with that of other Firefox users and sends it back to your browser so you can see how your Firefox performance changes over time. This data includes, for example: device hardware, operating system, Firefox version, add-ons (count and type), timing of browser events, rendering, session restores, length of session, how old a profile is, count of crashes, and count of pages. FHR does not send Mozilla URLs that you visit. We use the data sent through FHR to provide users with FHR's functionality, such as helping you analyze and address performance issues with your browser..."

Anytime I see the phrase, "includes, for example" that tells me the option collects and transmits more data elements than those listed above. Why didn't Mozilla provide the entire list of data elements? Not doing so forces users to hunt for the complete list.

The third option is the Crash Reporter:

"This report contains technical information for us to improve Firefox including why Firefox crashed, the active URL at time of crash, and the state of computer memory during the crash. The crash report we receive may include personal information. We make portions of crash reports available publicly at https://crash-stats.mozilla.com/). Before publicly posting crash reports, we take steps to automatically redact personal information. We do not redact anything you may write in the comments box."

Maybe your Firefox browser is stable, or not. Mine is pretty stable. It rarely crashes. I have a hard time remembering the last time it crashed... probably four or five years ago. The default for this option is already enabled, so you have to opt out or remove the check box next to the Crash Reporter option.

To me, this crash data seems worthwhile, so I left the Crash Reporter opinion enabled. The other two options didn't seem critical, so I decided not to enabled them. My point: wise Internet users know what data their web browsers collect.

I like that Mozilla provided these options with their web browser. I feel informed and in control of my personal information and privacy. Perhaps, you feel similarly. I hope so.

It'd be great if all other web browser software developers offered similar options to help their users. It'd be great if all manufacturers of mobile devices (e.g., tablets, smart phones, fitness accessories, watches, cameras, auto insurance trackers, etc.) provided consumers with similar options to maintain control of their information and privacy.

What are your options of the Firefox options? Of the options device manufacturers provide?


Asurion Expands Service Offering With Malware Protection For Smart Phones

Asurion, a provider of mobile device insurance services, announced yesterday that it will provide Walmart MobileCarePlus customers with free Asurion Mobile Security software. The Asurion security software is available in the respective app stores for Android and Blackberry smart phone users. According to the announcement:

"The Asurion Mobile Security solution regularly scans messages, pictures, installed applications and files on a customer's phone to identify and eliminate the latest viruses and malware, many of which can access private information and harm the mobile device itself. Safe browsing alerts users before visiting web sites which may compromise their phone's security and in the event a protected phone is misplaced, locate features can trigger an audible alarm, making recovery much easier... During the last two years, 48 percent of high school and college age students required a replacement device due to loss or damage."

For lost or stolen smart phones, the security service also includes a remote wipe feature to prevent thieves from accessing sensitive data and contacts on your smart phone.

This blog has warned mobile device users to add anti-malware software to their devices. Security software is available from a variety of vendors. If you are considering insurance for your mobile device, then read this first to help decide what's best for you.


Data Breach At Nationwide Insurance Affects More Than 28,000 Consumers In Georgia

On Monday, the State of Georgia Insurance Commissioner (GADOI) confirmed a data breach at Nationwide Insurance. Hackers gained unauthorized access to private and sensitive information at the company's online computers.

The announcement contained few details. It did not list the specific personal data elements stolen or exposed, nor explain how the breach happened and what the insurance company is doing so this breach won't happen again.

About 28,467 Georgia residents and policyholders were affected. The insurance company has agreed to:

  • Provide the GADOI with copies of written breach notices sent to affected consumers,
  • Set up a toll-free phone number (800-760-1125) for breach victims to ask questions, and
  • Provide breach victims with at least one year of free credit monitoring services

Some news sources reported that the F.B.I. is investigating the breach. Another news source reported that names, birth dates, drivers license numbers, and marital statuses were stolen. Given the personal data elements stolen, the hackers can do damage.

This is not the first data breach at Nationwide. A check of the breach database at Privacy Rights Clearinghouse found that the insurance company had two small breaches (Florida and New York) during 2007 where laptops containing sensitive personal information were stolen from employee's cars. In 2006, Nationwide was one of severalinsurers affected by a lockbox theft at Concentra Preferred Systems in Ohio.

The insurance company has not disclosed the number of affected consumers in other states. More details will emerge and the number of breach victims will most likely increase since several states require notice of data breaches.


You've Been 'Mugged' In An Auto Accident Insurance Scam. What To Do Next?

Recently, an I've Been Mugged reader wrote asking what to do. She had been the innocent victim in an auto insurance scam:

"Two days ago, I was surprised to find myself in a situation that I believe is a clever scam. It involves auto insurance and a trumped up claim. Although the situation is still unfolding, and my carrier may not pay once they investigate, I am shaken at being on the business end of such a scheme. I'm afraid to drive. I feel unsafe because this person has my address and who knows what else such a person might do."

While I had heard about these scams, I have never been involved in an auto accident insurance scam. And, I had not thought about an insurance claim scam as also being a potential identity theft risk, too. It stands to reason that if some criminals are willing to stage a bogus accident, intentionally cause a collision, and/or submit bogus medical claims after an accident, then they are also willing to abuse the other driver's personal data.

So, what should a consumer do to protect yourself? What can a consumer do to protect yourself after a staged accident?

First, I did some online research to learn about the types of auto insurance scams. My thinking is that by understanding them, it would be easier to recognize them and not get tricked. The Allstate Insurance page lists the types of auto insurance scams and fraud schemes:

  • Swoop & Squat
  • Sideswipe
  • Shady Helpers

I am not going to repeat the scam descriptions here. You can visit the site and read them for yourself. Some are intentional collisions. Sadly, criminals will stage bogus accidents or cause intentional collisions. In 2010, Florida led the nation in the number of complaints about insurance fraud related to staged accidents.

Second, I found that auto insurance company websites often provide advice for their policyholders about how to protect yourself, and what to do if you suspect fraud. The State Farm site lists the types of auto insurance frauds and provides instructions for its policyholders:

"To report suspected insurance fraud, call State Farm or the National Insurance Crime Bureau (NICB) hotline: 1-800-TEL-NICB / 1-800-835-6422"

So, if you suspect fraud, you should inform both your auto insurance company and the NICB. I visited the NICB website to learn more.

The NICB, based in Des Plaines, Illinois, is a non-profit organization dedicated to preventing, detecting, and defeating insurance fraud and vehicle theft. The NICB works with more than 1,100 property and casualty insurance companies. The NICB offers an Apple iPhone app for consumers to report suspected insurance fraud.

According to the NICB, staged accidents occur in every state in the nation. In 2010, the top five cities with the most staged accidents and related auto insurance fraud schemes were:
  1. New York, New York
  2. Tampa, Florida
  3. Miami, Florida
  4. Orlando, Florida
  5. Houston, Texas

And, the top five states were:

  1. Florida
  2. New York
  3. California
  4. Texas
  5. Illinois

The NICB also describes the types auto insurance scams:

  • Swoop & Squat
  • Sideswipe
  • Panic Stop
  • Drive Down

While at the site, I downloaded the NICB Staged Automobile Accident Fraud brochure (Adobe PDF) to learn more. It sounded to me like the I've Been Mugged reader had experienced a "Drive Down" scam.

The NICB also offers a really good flyer for consumers about what to do after an auto accident. Download the Accident Checklist (Adobe PDF). The NICB advises consumers to:

  • Tend to the injured. Call emergency and/or ambulance personnel if needed
  • Keep a disposable camera in your auto. Take photos of the entire accident scene, and damage to your car, the other car(s), and any buildings affected. Take photos of all cars' license plates and Vehicle Identification Numbers.
  • Notify the police immediately, and call them to the scene
  • Get the information (e.g., name, address, phone, insurance certificates) of all other drivers involved, and of any witnesses. Either write down the informaton, or take photos of any documents, especially if the driver is not the registered owner of the other car
  • Notify your insurance company immediately
  • Don't disclose your Social Security Number or bank account information

If you suspect that others involved in the (staged) accident have abused your personal information or committed identity fraud, file a report with local police and get a copy of that police report. I have used the Identity Theft Resource Center (ITRC) website before, and highly recommend it. The site provides plenty of information and advice for a variety of identity theft and fraud situations. If you suspect other drivers in the (staged) accident are abusing your personal information, then Fact Sheet 110 seems to apply. It makes sens to file fraud complaints with your insurance company and with the U.S. Federal Trade Commission (FTC).

If you are feeling particularly vulnerable, you might arrange a consultation with an attorney to get advice about what to do next. Get an attorney referral from somebody you trust and know. I also visited the websites for several states' Attorney General offices, as these websites often contain advice and resources for consumers.  For example, the New York State Attorney General website provides advice for consumers about how to fight auto insurance fraud.

I am sure that some I've Been Mugged readers have opinions or experience with auto insurance claim scams. If you were a victim in a staged auto accident auto insurance scam, what did you do to protect yourself? What resources did you find most helpful?


Houston Identity Theft Theft Ring Arrested After Ordering Smart Phones

The Houston Examiner reported the arrest of members of an identity theft ring that used the stolen identities of Sprint customers to order fraudulent replacement smart phones, which they resold:

"Customers are routinely asked for their secret PIN numbers when they walk into Sprint stores, and federal agents say employees of the store were giving that information to thieves who were using it to get replacement phones that could be sold online."

What I found interesting about this case were the three points where data security failed. Better security at any one of these points could have stopped this theft ring before it started.

First, insider identity theft by employee facilitated the thefts. Using the stolen identities, the thieves ordered replacement smart phones from the insurance company, Asurion, used by Sprint mobile customers. A data breach like this highlights the need for a mobile service provider to implement a Red Flags program to identify and address problem data-security areas.

Second, the insurance company didn't seem to notice the rise in replacement phones within a specific geographic area:

"After filing the insurance claims, Secret Service agents say brand new phones were mailed out to hotels throughout the Houston area."

Most banks regularly flag purchases outside a consumer's normal credit card purchase patterns. Mobile service providers and mobile device insurers could and should do the same; especially where insurance claims include a different delivery address than the customers' home address. The new overage alert features by mobile service providers is a good first step in this direction, but it shouldn't require prodding by the FCC.

Third, several Houston area hotels seem to routinely accept and deliver packages to people who routinely made reservations but never checked in. This is like airlines accepting luggage for passengers who make reservations but never buy a ticket. Airlines have identified this security risk, and so too should hotels. Accept packages if you want, but deliver them only to customers have they have registered and checked in; or make it a perk only for loyalty program members.


The Frenzied World Of Companies Collecting Consumers' Financial Histories

Many consumers believe that if you pay your bills on time, keep your (Experian, Equifax, and TransUnion) credit reports accurate, and keep your credit scores high, then all is well. Not necessarily. There are many more companies that track and collect data about consumers financial history.

Chances are, you haven't heard of their names. The Washington Post reported:

"But little attention has been paid to the firms that target consumers outside the mainstream financial system. Often they are students, immigrants or low-income consumers who do not qualify for traditional loans or choose not to use them... they carry particular weight for the estimated 30 million people who live on the margins of the banking system."

Who are some of the smaller firms? Some of them this blog has covered: ChoicePoint, Innovis, RapLeaf, Quantcast, First Data, Acxiom, Intelius, US Search, and Spokeo. Some are data brokers. Some collect website visitation statistics. Others focus on finance or insurance. Some are technology vendors working with ISPs. A prior blog post discussed the variety of brands of credit scores. Some other firms' names you may not have heard about:

"LexisNexis, whose parent company bought ChoicePoint three years ago, handles background checks, tax assessments and criminal histories. Bounced checks can be tracked through Chex Systems, TeleCheck or SCAN. Payday lenders report to a company called Teletrack. Alliant Data compiles information on so-called “installment payments,” industry jargon for recurring monthly fees such as gym memberships. The National Communications, Telecom and Utilities Exchange collects account information for 63 of that industry’s largest firms..."

The accuracy of the information collected by these firms is suspect:

"Arkansas resident Catherine Taylor didn’t learn about the fourth bureau until she was denied a job at her local Red Cross several years ago. Her rejection letter came with a copy of her file at a firm called ChoicePoint that detailed criminal charges for the intent to sell and manufacture methamphetamines. The information was incorrect... Taylor said she has identified at least 10 companies selling reports with the inaccurate personal and financial information, wrecking her credit history so badly that she says she cannot qualify to purchase a dishwasher at Lowe’s. Taylor must apply for loans under her husband’s name and has retained an attorney to force the firms to correct the record..."

And all of these firms do not include social networking websites, advertising networks, and mobile device marketers -- all collect information and profiles about consumers.

Given the long list of companies across several industries collecting consumers' personal information, you could call this a feeding frenzy.


Would You Buy Pay-As-You-Drive Auto Insurance?

A few nights ago, the CBS affiliate here in Boston broadcast a news story about "pay-as-you-drive auto insurance." The idea is that if you pay auto insurance premiums based on the number of miles you drive. If you drive a lot, you pay more. If you drive less, you pay less. Good drives might pay 2 cents a mile; bad drivers 10 cents a mile.

Why am I writing about this? Be patient and read to the end. The reason will quickly become obvious.

The idea of pay-as-you-drive or pay-per-mile auto insurance appeals to me, mostly because I don't drive much. I am happy to walk and/or take mass transit. Boston has a pretty good mass transit system with buses and subway trains.

My wife and I own one car which we share. When we need a second car, I use Zipcar.com, which is effectively paying for the use of a car (and its auto insurance) only when I need it -- on an hourly basis. If I use a Zipcar more, I pay more. I pay for only for what I use.

It seems a little unfair for me to pay the same amount as a person who drives 1,500 miles each month, while I drive only about 350 miles monthly. So, my auto insurance premiums would decrease substantially with pay-as-you-drive pricing. Another benefit of mileage-based auto insurance:

"A new study commissioned by the Conservation Law Foundation found that basing premiums on mileage would encourage drivers to drive less, cut down on pollution from tailpipe emissions, even reduce accidents which could be attractive for insurers."

The idea of pay-per-mile auto insurance also appeals because this form of pricing is not new. Rental car rates are often mileage based. Airplane and bus travel are often mileage based. you pay more the further you travel.

The news story was rolling along nicely until the reporter mentioned how insurance companies might measure drivers' mileage:

"... drivers would probably have to agree to a tracking device in their car to monitor their mileage and  check their driving habits."

Whoa!! More tracking of consumers?

There is tracking and then there is tracking. Simple tracking might upload once a month the car's odometer mileage reading. That is simple enough, since most new cars have digital odometers. Or, the folks at On-Star might include this with their existing service. It's what I had in mind during this news broadcast.

More invasive tracking might use a GPS device to measure your mileage and speed; in theory to determine whether or not drivers comply with posted speed limits. That is problematic and unnecessary.

Why? First, insurance companies already obtain speeding ticket information from state motor vehicle registries. Second, inspection stations already record mileage during the auto inspection. Just add the upload feature to the RMV.

Third, slow drivers could get penalized needlessly if the tracking doesn't include traffic information. Fourth, extensive tracking collects more information a company could lose or have stolen during a data breach.

Fifth and perhaps most importantly, GPS tracking captures a lot more information than insurance companies need: your location, time of day, travel patterns, and how long you stay at certain places. That is far more extensive data collection than any insurance company deserves, or should have.

Are insurance companies prepared to invest more in data security to protect this information? So far, they don't seem prepared to do so. They would have to because where you are during the day, and your travel patterns over weeks or months, is very valuable information. Burgulars, for one, would love to have it. They'd know when you aren't home and when you are expected to return.

The news reporter, Beth Germano, didn't discuss any of the privacy issues related to tracking. Hopefully she will in a future news telecast, because a rental car company, using GPS tracking, issued a consumer a speeding ticket and included the speeding fine with his auto rental bill. Insurance companies should not perform law enforcement tasks. The insurance company was forced to stop billing speeders.

What's your opinion about pay-as-you-go auto insurance? Would you buy it? What track would you be comfortable with? If you missed the news telecast, here it is:


How To Make Sure Your Bank Accounts Are Covered By FDIC Insurance

You work hard for your money. Naturally, you want to make sure your money is protected. The Federal Deposit Insurance Corporation (FDIC) insures the deposits at member banks. The current FDIC insurance limits:

"If you (or your family) have deposits at one FDIC-insured bank with a combined total balance less than the basic maximum insurance amount under federal law – currently $250,000 through year-end 2013 – all of that money is fully protected. And, as always, you may qualify for much more than the standard maximum insurance amount at the same bank – perhaps millions of dollars of coverage – if you have funds in different "ownership" categories. That's because the FDIC's rules allow for separate $250,000 coverage for deposits held in your name alone (single accounts), accounts with one or more other people (joint accounts), accounts that name beneficiaries when you die (testamentary or revocable trust accounts), and certain retirement accounts, such as Individual Retirement Accounts (IRAs)."

All of this sounds great. How can a consumer easily find out which accounts are insured? Try EDIE, an online estimation tool by the FDIC.

To use EDIE, first you enter (or select) your bank. EDIE has a nice look-up mechanism to find your bank by name and by branch location. Then, select the type of account (e.g., checking, savings, IRA, etc.) you have at that bank, and the amount in that account. You then repeat this last step for each account you have at the same bank.

After entering this data, EDIE will tell you if each account at that bank is covered by FDIC insurance, the amount insured by the FDIC, and if any amounts are not insured (e.g., over the FDIC insurance limit). This presentation by EDIE makes it easy to see how much money you must move to another bank so that it is insured by the FDIC.

I hope that you will use EDIE. I did. It's easy to use.


The 2009 Data Breach Hall Of Shame

This month, Network World magazine released its list of the 2009 Data Breach Hall of Shame. This list includes companies and government agencies that really effed up... they didn't protect consumers' sensitive personal information as they should have. All of these breaches were preventable. Here's who made the list:

  1. Transportation Security Administration (TSA) after it accidentally posted on a public Web site a manual that contained complete details on its airport screening procedures,
  2. Heartland Payment Systems after it allowed hackers to steal about 130 million credit and debit cards over several months while the company was being certified as PCI compliant for security,
  3. Health Net after it lost a hard drive with unencrypted personal, financial, and medical information of 1.5 million consumers and after it waited for six months before notifying government authorities and its breach victims,
  4. U.S. Government Printing Office after it posted on a publicly accessible web site a document with details on U.S. civilian nuclear sites marked as "Highly Confidential Safeguards Sensitive,"
  5. RockYou Inc after a hacker stole over 32 million consumers' passwords and sign-in credentials that were stored in plain text without any encryption or protection

I agree with Network World. The companies and agencies on this list deserved to be on this list. Their executives were sound asleep when they should have been awake and actively protecting the sensitive information they were entrusted with. In honor of these executives, I'd like to present them with the Data Breach Analysis Flow below, which was first published in this blog in September 2007:

Data Breach Flow


Health Net May Have Violated Consumer Notification Laws After Its Data Breach

From the Boston Examiner:

"On Friday Attorney General Terry Goddard called on Health Net, a Connecticut-based insurance company, to immediately notify its Arizona policyholders whose personal, medical and financial information was either lost or stolen in a data breach that occurred six months ago. He said further that his Office will open an investigation to determine whether a state law requiring prompt notification was violated. Health Net notified the Arizona Department of Insurance on Wednesday that a hard drive containing personal data on some 316,000 present and former Arizona policyholders has been missing since May from the company's headquarters in Shelton, Conn. The company has yet to contact the affected policyholders about the breach, however, saying it plans to send letters to them soon."

Soon? The company already waited six months after the breach to notify State of Connecticut officials. To learn more, read this prior blog post.


How To Check Your Insurance Company's Complaint Record

Everyone has horror stories about insurance companies, whether its auto insurance, health insurance, homeowners, or property insurance. There's a good article at Kiplinger.com that has documented the leading ways insurance companies "mug" or abuse their customers:

"... the top complaint had to do with claims payments -- claims-handling delays (19.1%), followed by denial of claims (17.9%) and unsatisfactory settlement offers (15.0%). You should be concerned if a company you're considering has a lot of complaints in these areas. The next category of complaints revolves around underwriting -- the insurer's process of accepting or rejecting applicants and setting rates. Premium and rating accounted for 4.8% of the complaints, and policy cancellation for 4.2%. The type of insurance policyholders had the most complaints about was accident and health insurance (37.7%), followed closely by auto insurance (33.7%). There were fewer complaints about homeowners insurance (12.71%) and life insurance and annuities (10.4%)."

Maybe you are looking for a new insurance company, or just curious about your current provider. To check an insurance company's complaint record, visit the Consumer Information Source Web site produced by the National Association of Insurance Commissioners (NAIC). Then:

"Type in the name of the company, the state where you live and the type of insurance. (Under "statement type" and "business type," click on "property/casualty" for home and auto insurance or "life, accident and health.") The site then provides the insurer's national complaint statistics. Focus on the complaint ratio, which shows the ratio of the company's U.S. market share of complaints to the company's U.S. market share of premiums for a specific policy type... If the national median complaint ratio is 1.00 and the ratio for the company you're considering is 2.00, for example, that should be a red flag. Also look at the complaint trend report to see whether the company's complaints have been increasing or decreasing over time. If the insurer's complaint ratio is high, check its record at your state insurance department and find out whether any enforcement actions have been taken against the insurer."

To find your state government's insurance department, browse this NAIC Web page with a map of insurance commissioners by state. Both links are great resources, whether you are happy with your current insurance company or looking for a new one.


ChoicePoint Settles With The FTC About Its Data Breaches and Security Lapses

I'd written previously about my less than consumer friendly experiences with ChoiceTrust, a service from ChoicePoint, Inc.. Recently, the U.S. Federal Trace Commission (FTC) announced a settlement by ChoicePoint, Inc. after the company's past data breaches and data security lapses:

"In April 2008, ChoicePoint (now a subsidiary of Reed Elsevier, Inc.) turned off a key electronic security tool used to monitor access to one of its databases, and for four months failed to detect that the security tool was off, according to the FTC. During that period, an unknown person conducted unauthorized searches of a ChoicePoint database containing sensitive consumer information, including Social Security numbers. The searches continued for 30 days. After discovering the breach, the company brought the matter to the FTC’s attention. The FTC alleged that if the security software tool had been working, ChoicePoint likely would have detected the intrusions much earlier and minimized the extent of the breach. The FTC also alleged that ChoicePoint’s conduct violated a 2006 court order mandating that the company institute a comprehensive information security program reasonably designed to protect consumers’ sensitive personal information."

Gee, that's extremely poor management. First, the company fails to implement every security feature it had already established. Second, its actions violated a previous court order about data security. How arrogant can a company act?

ChoicePoint's settlement included actions to:

"... strengthened data security requirements to settle Federal Trade Commission charges that the company failed to implement a comprehensive information security program protecting consumers’ sensitive information... This failure left the door open to a data breach in 2008 that compromised the personal information of 13,750 people and put them at risk of identify theft. ChoicePoint has now agreed to a modified court order that expands its data security assessment and reporting duties and requires the company to pay $275,000."

Was this fine sufficiently large enough? In my opinion, no.

Will ChoicePoint do the right thing and maintain adequate protections for the consumer data it stores and sells? Will it comply with applicable Red Flag rules by the FTC in 2010? Time will tell. I'm not holding my breath.

I'd love to be able to pull my C.L.U.E. insurance reports and records from Choicetrust, but we consumers don't have that option. Due to ChoicePoint's cozy relationship with the government, the company enjoys a near-oligopoly status regarding C.L.U.E. insurance reports. This is a good example of a "free market" sham. Same for the credit-reporting agencies.

At some point, this crap has to end.


How To Confirm That Your Bank Is FDIC Insured

Great advice for consumers from The Consumerist blog. First, some background:

"... FDIC insurance covers banks and NCUA insurance covers credit unions. Not all credit unions are insured by the NCUA, the ones that aren't often have insurance from American Share Insurance (ASI)..."

Here's the important information:

"The best and only way you can confirm that a bank is FDIC insured is by using the FDIC's Bank Find tool. The search will tell you whether or not the bank is in the database but it's not very robust because it does a broad match search. If you search for ING, as in ING Direct, you'll get every bank with 'ing' in its name which is is pretty much every single bank with the word "Savings" in it. An alternative is if you go to the site and find the FDIC certificate number. On the FDIC Bank Find page, click on "More Search Options" and you can enter the certificate number."

For consumers who use credit unions:

"The NCUA has a similar Find a Credit Union search that lets you find the credit union you're interested in. Again, the search is broad match so it might be easier to get the Charter Number of the credit union and entering it directly... Finally there's ASI and you can search for credit unions insured by ASI at their credit union search. FDIC and NCUA are effectively backed by the full faith and credit of the United States, ASI is not."