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Thursday, 31 May 2012

BMI and insurance premiums.



The Body Mass Index has its origins in the mid-1800s, when Belgian statistician and “social physicist” Adolphe Quetelet devised it to describe "a normal man". The original Quetelet index was merely a means of working out the average build of a typical male human.

Enter Louis I. Dublin, who over one hundred years later would oversee the development of height and weight tables in his capacity as vice president of Metropolitan Life Insurance Company. These tables were based not on medical information but on actuarial statistics. The charts depicted the mortality rates of men based on height and weight, which was (and is) important data for an insurance company for rating life insurance policies.

In 1998, the U.S. National Institutes of Health brought U.S. definitions into line with World Health Organization guidelines, lowering the normal/overweight cut-off from BMI 27.8 to BMI 25. This had the effect of redefining approximately 25 million Americans, previously "healthy" to "overweight".[13] It also recommends lowering the normal/overweight threshold for South East Asian body types to around BMI 23, and expects further revisions to emerge from clinical studies of different body types.

In the United States, where medical underwriting of private health insurance plans is widespread, most private health insurance providers will use a particular high BMI as a cut-off point in order to raise insurance rates for or deny insurance to higher-risk patients, thereby reducing the cost of insurance coverage to all other subscribers in a 'normal' BMI range. The cutoff point is determined differently for every health insurance provider and different providers will have vastly different ranges of acceptability. Many will implement phased surcharges, in which the subscriber will pay an additional penalty, usually as a percentage of the monthly premium, based on membership in an actuarially determined risk tier corresponding to a given range of BMI points above a certain acceptable limit, up to a maximum BMI past which the individual will simply be denied admissibility regardless of price. This can be contrasted with group insurance policies which do not require medical underwriting and where insurance admissibility is guaranteed by virtue of being a member of the insured group, regardless of BMI or other risk factors that would likely render the individual inadmissible to an individual health plan

The Lobbying Disclosure Act of 1995 requires lobbyists at the federal level, including Congress, the White House, and federal agencies, to submit biannual reports describing the organization they lobbied for and the amount spent on lobbying activities. However, the lobbying reports do not specify the legislation discussed or the positions advocated by lobbyists. Thus, it is not possible to determine the extent to which health policy decisions were affected by lobbying. The Lobbying Disclosure Act could be strengthened by requiring more detailed reporting, such as specifying the legislation discussed and the positions advocated by lobbyists, say the authors of this new study.

Health care organizations lobby lawmakers in order to influence health policy decisions. Such decisions affect virtually all aspects of health care, including compensation for goods and services, licensing and oversight, and research priorities. The investigators found that a total of 1192 organizations were involved in health care lobbying. Individual organizations with the highest lobbying expenditures included the American Medical Association ($17 million), the American Hospital Association ($10 million),Pharmaceutical Research & Manufacturers of America ($7 million), Schering Corporation ($7 million), Health InsuranceAssociation of America ($7 million), Blue Cross/Blue Shield ($6 million), and Eli Lilly & Company ($5 million).

Reports on the finding by nonprofit Center for Responsive Politics that insurance firms and allied organizations have spent $66 million lobbying the United States Congress in 1997. List of the top 16 insurance lobbying spenders; Insurance industry as the second biggest lobbying spender among industries.





LOBBYIST EMPLOYERS - FINANCE & INSURANCE* Jan - Mar 97Apr - Jun 97  1997 Total
Adam's Marketing Associates, Inc.$45,942 $45,942 $91,884 
Aetna Inc.$9,919 $8,006 $17,925 
AFLAC$7,899 $7,899 $15,798 
Alliance of American Insurers$34,635 $34,635 $69,270 
Allstate Insurance Company$33,800 $68,619 $102,419 
American Agents Alliance $7,770 $9,785 $17,555 
American Council of Life Insurance $76 $25,036 $25,112 
American Express Financial Advisors Inc. $3,000 $3,000 $6,000 
American Express Travel Related Services Co., Inc.$13,250 $15,412 $28,662 
American General Finance$5,054 $7,362 $12,416 
American Insurance Association $81,781 $50,646 $132,427 
American International Group, Inc.$5,391 $30,106 $35,497 
American Share Insurance $12,027 $11,017 $23,044 
American Stock Exchange $0 $0 $0 
AON Corporation$0 $0 $0 
Associated Electric & Gas Insurance Services Limited $0 $0 $0 
Association of Banks-In-Insurance$6,062 $6,055 $12,117 
Association of California Insurance Companies$141,584 $146,395 $287,979 
Association of California Life and Health Insurance Companies$99,705 $109,614 $209,319 
Association of California Surety Companies$4,875 $10,787 $15,662 
Aurora National Life Assurance Company$15,996 $15,000 $30,996 
Avco Financial Services$4,570 $3,769 $8,339 
AXA Global Risks (UK) Limited$1,539 $0 $1,539 
BankAmerica Corporation/Bank of America NT&SA (a wholly owned subsidiary of BankAmerica Corporation)$118,137 $75,398 $193,535 
Beneficial Management Corporation of America$4,911 $10,675 $15,586 
Blue Cross of California $64,160 $141,853 $206,013 
Boxers and Wrestlers Benefit Fund of Southern California$0 $0 $0 
California Administrative Services Organization$3,210 $6,605 $9,815 
California Association of Exclusive Insurance Agents, Inc.$0 $3,000 $3,000 
California Association of Health Underwriters$10,650 $10,650 $21,300 
California Association of Life Underwriters, Inc.$33,125 $32,168 $65,293 
California Association of Professional Liability Insurers$0 $0 $0 
California Association of Thrift & Loan Companies $23,750 $0 $23,750 
California Automobile Assigned Risk Plan $5,371 $353 $5,724 
California Bankers Association $146,022 $216,911 $362,933 
California Credit Union League $62,032 $69,914 $131,946 
California Financial Services Association$9,195 $9,736 $18,931 
California Independent Bankers of the IBAA$0 $0 $0 
California Insurance Guarantee Association$5,000 $6,353 $11,353 
California Insurance Wholesalers Association (CIWA)$16,250 $8,125 $24,375 
California Investor's Mutual$3,025 $3,000 $6,025 
California Land Title Association $26,192 $21,269 $47,461 
California Public Securities Association $21,455 $18,512 $39,967 
California Self-Insurers Association $9,873 $10,699 $20,572 
California State Automobile Association and California State Automobile Association Inter-Insurance Bureau$178,986 $120,589 $299,575 
California Surety Federation $6,750 $10,125 $16,875 
California Workers' Compensation Institute$4,538 $0 $4,538 
Central Mutual Insurance Company$0 $0 $0 
Charles Schwab and Company, Inc.$3,000 $18,087 $21,087 
Chase Manhattan Bank, The $0 $25,121 $25,121 
Chicago Title Company, and affiliated Title Insurance Companies$6,719 $6,699 $13,418 
CIGNA Corp. on behalf of CIGNA Healthcare of CA., Inc. and Pacific Employers Insurance Co. and its affiliated entities$85,000 $15,000 $100,000 
Citicorp & Subsidiaries$13,496 $19,068 $32,564 
Claims Benefit Insurance Administrators, Inc.$0 $250 $250 
CollegeFund-Partners in Education, Inc.$0 $0 $0 
Collegiate Capital Group, LLC$2,000 $10,000 $12,000 
Colonial Life & Accident Insurance Company$6,000 $6,000 $12,000 
Commonwealth Land Title Insurance Company$0 $8,000 $8,000 
Continental Casualty Company$82,554 $83,995 $166,549 
Cooperative of American Physicians/Mutual Protection Trust$6,845 $16,292 $23,137 
Council for Affordable Health Insurance, The$0 $0 $0 
Dean Witter Reynolds$0 $0 $0 
Delta Dental Insurance Co. $0 $0 $0 
Doctors' Management Company, The$15,081 $15,000 $30,081 
Dun & Bradstreet$0 $60,000 $60,000 
Escrow Agents Fidelity Corporation$6,062 $6,080 $12,142 
Fannie Mae$11,442 $5,509 $16,951 
Farmers Group, Inc.$127,455 $65,586 $193,041 
Federal Home Loan Mortgage Corporation (Freddie Mac)$31,844 $41,095 $72,939 
Federated Investors$13,461 $9,465 $22,926 
Federated Mutual Insurance Company$3,325 $11,548 $14,873 
Federation of Exchange Accommodators, Inc. $7,856 $8,448 $16,304 
FGIC Capital Market Services$0 $0 $0 
Fidelity Investments Public Sector Services Company$0 $0 $0 
Fireman's Fund Insurance Company$21,269 $15,414 $36,683 
First American Financial Corporation, The$20,103 $10,069 $30,172 
First American Title Guaranty Company$0 $0 $0 
FMR Corp.$0 $0 $0 
Fremont Compensation Insurance Group$30,045 $30,045 $60,090 
Funeral Security Life $0 $0 $0 
Funeral Security Plans, Inc.$6,900 $8,137 $15,037 
G.E. Capital/Monogram Retailer Credit$0 $0 $0 
Gerald J. Sullivan & Associates, Insurance Brokers$3,644 $7,292 $10,936 
Goldman, Sachs & Company$12,590 $9,360 $21,950 
H & R Block $45 $135 $180 
H.F. Ahmanson & Company, including its subsidiaries$1,500 $1,500 $3,000 
Health Insurance Association of America $18,750 $18,750 $37,500 
Health Net $81,964 $83,009 $164,973 
Heddington Insurance (U.K.), Limited$0 $0 $0 
Highlands Insurance Company$18,612 $8,275 $26,887 
Home Warranty Association of California$9,480 $24,970 $34,450 
Household Financial Group, Ltd. $40,316 $28,055 $68,371 
Independent Administrators Association$2,250 $0 $2,250 
Industrial Bank of Japan, Ltd.$0 $0 $0 
Insurance Agents and Brokers Legislative Council $0 $0 $0 
Insurance Brokers and Agents of the West$88,192 $82,848 $171,040 
Insurance Brokers Society of Southern California$0 $0 $0 
Insurance Services Office, Inc.$35,478 $34,629 $70,107 
Investment Company Institute$0 $2,814 $2,814 
Koiso & Company$1,076 $3,302 $4,378 
Lehman Brothers, Inc.$9,737 $15,336 $25,073 
Lincoln National Life Insurance Company$900 $400 $1,300 
McLaughlin & Associates, Incorporated$0 $250 $250 
Massachusetts Mutual Life Insurance Company $13,667 $10,250 $23,917 
Maxicare$6,000 $6,000 $12,000 
MBIA Insurance Corporation$232 $32 $264 
Medical Insurance Exchange of California $11,475 $11,475 $22,950 
Mercury General Corporation & its subsidiary Mercury Casualty Company$64,040 $63,039 $127,079 
Merrill Lynch & Co., Inc., and its subsidiaries$27,682 $27,108 $54,790 
Metropolitan Life Insurance Company$0 $19,039 $19,039 
MGIC Investment Corporation$2,563 $1,232 $3,795 
Money Store, The$135 $0 $135 
Morgan Stanley, Dean Witter, Discover & Co.$13,155 $8,803 $21,958 
Mortgage Association of California$5,200 $6,325 $11,525 
Mortgage Insurance Companies of America (MICA) $7,500 $0 $7,500 
Multistate Associates Inc. on behalf of H.D. Vest$5,000 $10,000 $15,000 
Muriel Siebert & Company $3,000 $2,000 $5,000 
National Association of Bail Insurance Companies$0 $15,000 $15,000 
National Association of Independent Insurers$14,095 $9,333 $23,428 
National Association of Insurance Brokers$0 $1,500 $1,500 
National Association of Securities Dealers (NASDAQ)$0 $0 $0 
National Consumers Finance Company$6,000 $6,049 $12,049 
National Council on Compensation Insurance, Inc. (NCCI)$16,357 $7,819 $24,176 
Nationwide Insurance Enterprise$10,222 $10,381 $20,603 
New York Life$7,500 $7,500 $15,000 
New York Stock Exchange$0 $0 $0 
Norcal Mutual Insurance Company$11,683 $11,475 $23,158 
Norwest Financial$0 $0 $0 
Norwest Mortgage, Inc.$19,660 $10,145 $29,805 
Pacific Genesis Group, Inc.$4,000 $16,000 $20,000 
Pacific Life Insurance Company$3,590 $8,906 $12,496 
Pacific Rim Assurance Company$4,474 $0 $4,474 
Personal Insurance Federation of California $78,552 $82,912 $161,464 
Physicians Mutual Insurance Company$1,500 $0 $1,500 
Pipar Jaffray Companies, Inc.$4,296 $2,565 $6,861 
Presidio Capital Corp.$3,494 $15,573 $19,067 
Private Medical-Care Inc.$0 $0 $0 
Professional Insurance Agents of California and Nevada$32,037 $39,669 $71,706 
Program Beta$0 $15,900 $15,900 
Prudential Insurance Company of America, The$0 $12,500 $12,500 
Re-Insurance Association of America$18,750 $12,500 $31,250 
Reliance Insurance Company$0 $225 $225 
Safeguard Health Enterprises, Inc.$7,500 $6,000 $13,500 
Securities Industry Association$16,498 $20,316 $36,814 
Skandia International Insurance Corporation $1,553 $0 $1,553 
Society of Insurance Brokers$0 $8,334 $8,334 
Southern California Physicians Insurance Exchange$11,475 $43,475 $54,950 
St. Paul Reinsurance Company, Limited$1,553 $0 $1,553 
State Farm Insurance Companies $100,792 $204,863 $305,655 
Stewart Title Guaranty Company$1,507 $4,852 $6,359 
Surety Company of the Pacific $23,323 $20,580 $43,903 
Surplus Line Association of California, The$51,750 $22,251 $74,001 
Teachers Insurance and Annuity Association of America/College Retirement Equities Fund$9,000 $9,000 $18,000 
Terra Nova Insurance Company Limited$1,553 $0 $1,553 
Threadneedle Insurance Company Limited, The$1,485 $0 $1,485 
Title Loans of America$19,500 $0 $19,500 
Trans Union Corporation$5,017 $10,177 $15,194 
Transamerica HomeFirst, Inc.$0 $0 $0 
Transamerica Occidental Life Insurance Company$5,590 $3,069 $8,659 
Travelers Express Company, Inc.$6,036 $4,000 $10,036 
Travelers Group, Inc.$0 $818 $818 
Underwriters at Lloyd's, London$7,493 $8,171 $15,664 
UnionAmerica Insurance Company Limited$1,545 $0 $1,545 
United Healthcare$13,750 $13,750 $27,500 
United Services Automobile Association (USAA)$21,045 $42,265 $63,310 
Variable Annuity Life Insurance Company, The$12,180 $9,087 $21,267 
Ventura & Associates Insurance$0 $0 $0 
Viaticus Inc.$5,000 $0 $5,000 
VISA U.S.A. Inc.$9,222 $9,434 $18,656 
Vision Service Plan$2,602 $2,570 $5,172 
Wausau Insurance Companies$0 $0 $0 
Wells Fargo and Company $58,870 $74,228 $133,098 
Western Association of Venture Capitalists $7,200 $7,200 $14,400 
Western League of Savings Institutions$64,694 $63,486 $128,180 
Word & Brown$750 $2,436 $3,186 
Zenith Insurance Company $50,022 $33,464 $83,486 
Zurich Reinsurance (London) Limited$0 $1,555 $1,555 
20th Century Insurance Company$20,343 $31,198 $51,541 
21st Century Casualty Company$0 $0 $0 
TOTAL$3,047,205 $3,308,687 $6,355,892 

Looking very quickly and non-analytically at the report and accounts for a quantity of the Top 25 Health Insurance companies in the US, there was a sharp jump in revenue for the financial year 1999/2000 in the majority of the companies. 

Just sayin......

Sources: Wikipaediea, Open Secrets, Centre for Responsive Politics,

3 comments:

  1. Where did you get all this stuff, darling? Fascinating.

    ReplyDelete
  2. Wiki

    Some interminable long insurance document I read and now wish to forget on calculating premiums and setting rates for actuaries

    Goggling lobbying and then lobbying by insurance companies in 1996/7

    Reports to shareholders 1996 - 2004 for Blue Cross, Wellpoint, Kaiser etc

    Centre for Responsive Politics

    Those are the websites I used. I also read a load of other stuff but would have to look at my computer history...........

    ReplyDelete
  3. This is obviously a major flaw in the insurance industry and body builders are paying the price. Both BMI and body fat should be included in the formula to ensure fair rates to all consumers.

    ReplyDelete