Media with too few journalists use outside news reporters

 

Bill Knight column for 10-7, 8 or 9, 2021

 As newsrooms lose journalists, solid reporting suffers. Luckily, good investigations occasionally arise from independent researchers, and, fortunately, skeletal news media sometimes pick up the stories.

Two recent examples both uncover sectors of the insurance industry making millions more than usual during COVID.

First, Illinois’ Better Government Association, the nonpartisan watchdog group, this summer showed that the state’s five for-profit insurance companies that run Illinois’ Medicaid program collected millions in extra revenues based on typical estimates, not from actual direct medical services, which many people have postponed during the pandemic.

Written by BGA senior investigative reporter David Jackson, a former Chicago Tribune reporter, the comprehensive piece says that the 2020’s shutdown of the economy resulted in some 480,000 lost jobs and new Medicaid clients, but no corresponding level of new care.

“Illinois’ five Medicaid insurance contractors — called Managed Care Organizations, or MCOs for short — reveals the unprecedented surge in profits from April 2020 through December 2020,” Jackson reported.

Three of the corporations (IlliniCare Health Plan, Meridian Health Plan of Illinois, and Molina Healthcare of Illinois) reported a combined $282 million increase in profits in Illinois during those nine months of the pandemic, compared to the same months in 2019. The other two (Aetna Better Health of Illinois, Inc. and Blue Cross and Blue Shield of Illinois) also reported big gains, but their apparent windfalls are less clear because their financial reports include non-Medicaid patients.

“If those numbers end up bearing out, we will be recouping a significant amount of money from the plans,” Illinois’ Department of Healthcare and Family Services director Theresa Eagleson told the BGA.

HFS could recover $120 million, her office said.

State Sen. Dave Koehler (D-46^th) is trying to reduce future payments to reflect excess payments, which he estimates at 20%.

“Our two hospital systems here in Peoria verified that their revenues were down during the height of the pandemic because everybody was not doing electives,” Koehler, an assistant majority leader, told the BGA. “We don’t really have a managed care system in this state; we have a managed payment system.

“If we are able to reallocate excess profits from these companies, we can help hospitals stay open and keep providing lifesaving care in our low-income and rural communities,” said Koehler, who introduced Senate Bill 455 in February.

However, critics of his bill say the state already has ways to recover overpayments, and the measure has been in the Assignments Committee since mid-April.

Elsewhere, an analysis of auto insurers by the Center for Economic Justice and the Consumer Federation of America weeks ago found that auto insurers nationally ended 2020 with “windfall profits of at least $29 billion” based on the premiums they took in and claims they paid compared with the average of four previous years. Also, insurers collected $42 billion more in 2020 while providing only $13 billion in policyholder refunds that they called “premium relief” during the early stage of the pandemic.

Internally, insurers were generous with their “windfalls.” For example, Northbrook-based Allstate increased compensation to Chief Executive Officer Thomas Wilson by 7.7% in 2020 (to $21.1 million), and

Bloomington-based State Farm likewise in 2020 gave its CEO Michael Tipsord an $18 million bonus to his $2.1 million salary, the groups reported.

Despite publicity about refunds to policyholders, most Illinoisans have seen little, the groups said.

Other states (California, Michigan, New Jersey and New Mexico all require refunds in such situations, but in Illinois it’s more of a suggestion.

The Illinois Department of Insurance last year issued two bulletins “to encourage insurance companies to provide relief to assist Illinois consumers during the pandemic.”

Consumer Federation insurance expert Douglas Heller commented, “I hope there’s a lawmaker that’s calling the insurance commissioner and saying, ‘How do we change that law?’ because this is really unacceptable.”

Indeed, reforms are needed; in auto insurance and in health insurance (especially Medicaid).

And also in news-media ownership, whose financial decisions have increasingly meant newsrooms have been forced to rely on others to do the basic reporting that historically was generated by working journalists.