Tagged California Healthline

Molina Healthcare, A Top Obamacare Insurer, Investigates Breach Of Patients’ Data

Molina Healthcare, a major insurer in Medicaid and state exchanges across the country, has shut down its online patient portal as it investigates a potential data breach that may have exposed sensitive medical information.

The company said Friday that it closed the online portal for medical claims and other customer information while it examined a “security vulnerability.” It’s not clear how many patient records might have been exposed and for how long. The company has more than 4.8 million customers in 12 states and Puerto Rico.

“We are in the process of conducting an internal investigation to determine the impact, if any, to our customers’ information and will provide any applicable notifications to customers and/or regulatory authorities,” Molina said in a statement Friday. “Protecting our members’ information is of utmost importance.”

Brian Krebs, a well-known cybersecurity expert who runs the Krebs on Security website, said he notified the company of the potential breach earlier this month and wrote about it on his website Thursday. Molina said it was already aware of the security vulnerability when contacted.

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Until recently, Krebs said, Molina “was exposing countless patient medical claims to the entire internet without requiring any authentication.”

Krebs said the information he saw online included patients’ names, addresses, dates of birth and information on their medical procedures and medications.

“It’s unconscionable that such a basic, security 101 flaw could still exist at a major health care provider,” Krebs said. “This information is more sensitive than credit card data, but it seems less protected.”

Krebs said he received an anonymous tip in April from a Molina member who stumbled upon the problem when trying to view his medical claim online. The tipster found that by changing a single number in the website address he could then view other patient claims, according to Krebs.

Krebs said the Molina member showed him screenshots of his own medical records and how when he changed the web address slightly it then displayed records of another patient. On Friday, the Molina website told customers that the online portal was “under maintenance.”

Health care companies, hospitals and other providers must report data breaches to U.S. officials. Molina emphasized that it was still investigating the matter so had not yet reported it. Federal regulators can levy significant fines for violations under the Health Insurance Portability and Accountability Act, also known as HIPAA.

Many security experts question the ability of health care companies and providers to safeguard vast troves of electronic medical records and other sensitive data, particularly at a time when cybercriminals are targeting medical information.

Molina, based in Long Beach, Calif., posted $17.8 billion in annual revenue last year.

Molina made news earlier this month with the surprise firing of its top two executives, who are sons of the company’s founder. Both CEO J. Mario Molina and his brother, finance chief John Molina, were ousted. The company’s board said Molina’s disappointing financial performance led to the management change.

Molina has grown more prominent during the rollout of the Affordable Care Act, as Medicaid expanded and state insurance exchanges launched. The company serves more than 1 million people through Obamacare exchanges across several states. It has nearly 69,000 enrollees in the Covered California exchange, or about 5 percent of the market.

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Categories: California Healthline, Health Industry, Insurance

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Tab For Single-Payer Proposal In California Could Run $400 Billion

A proposed single-payer health system in California would cost about $400 billion annually, with up to half of that money coming from a new payroll tax on workers and employers, according to a state analysis.

The report by the state Senate Appropriations Committee, issued Monday, put a price tag for the first time on legislation that would make the state responsible for providing health coverage to all 39 million Californians. The state-run system would supplant existing employer health insurance in California, as well as coverage through public programs such as Medicaid and Medicare.

One of the chief obstacles to the legislation, Senate Bill 562, is the prospect of higher taxes. It also has exposed deep divisions among Democrats over whether now is the time to pursue single-payer — just as the Affordable Care Act comes under attack from Republicans in Washington. At a hearing Monday, one Democratic legislator questioned whether the state can effectively manage a universal health care system.

The legislative analysis estimates a total annual cost of $400 billion to enact the Healthy California program for all residents, regardless of their immigration status.

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To put that in perspective, about $367 billion was spent on health care last year statewide, including public and private spending by employers and consumers, according to the UCLA Center for Health Policy Research.

Legislative analysts said federal, state and local taxpayer funding of about $200 billion a year for existing programs could be available to offset the overall tab of $400 billion for universal coverage. But additional tax revenue would be needed to foot the other half of the cost, according to the report, which raised the possibility of a 15 percent payroll tax on earned income.

Of course, the shift to a single-payer system should reduce current spending on health insurance by employers and workers, so those savings could offset some of the new taxes, the analysts said. The report estimated that employers and employees in California spend $100 billion to $150 billion a year now on health insurance and medical care.

“Total new spending required under the bill would be between $50 billion and $100 billion per year,” the report said.

The Senate analysis noted that all of its projections were “subject to enormous uncertainty” because the bill would mark “unprecedented change in a large health care market.”

A single-payer system likely “would be more efficient in delivering health care,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. (California Healthline is produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.)

But the proposal expands coverage to all and eliminates premiums, copayments and deductibles for enrollees, and that would cost more money, Levitt said. “You can bet that opponents will highlight the 15 percent tax, even though there are also big premium savings for employers and individuals,” he added.

State Sen. Ricardo Lara (D-Bell Gardens), a chief sponsor of the legislation, said the present system is unsustainable because health spending continues to grow faster than the overall economy, making coverage unaffordable for too many people.

Lara touted the potential savings from creating a public plan with greater bargaining power and cutting out the administrative overhead and profits of private health insurers acting as middlemen.

Overall, many of the details behind California’s single-payer proposal remain in flux. Under questioning from fellow lawmakers, Lara said the 15 percent payroll tax is “hypothetical” and “we don’t have a financing mechanism yet for this bill.”

Lara said he has sought a review from researchers at the University of Massachusetts-Amherst into potential funding sources for the measure.

Lara also said there’s no guarantee the Trump administration would grant the federal waivers necessary for California to shift Medicare and Medicaid funding into a single pot for universal health care.

With so many unknowns, the Senate Appropriations Committee didn’t vote on the measure Monday. Backers of the legislation are hopeful for a vote in the full Senate next month and then lawmakers can continue to work on the financial aspects during the summer.

At Monday’s hearing, many consumers pointed to Medicare as a model for how single-payer works now and urged lawmakers to make California the proving ground for how it can succeed at the state level.

Business groups and health insurers spoke out in opposition, saying it would lead to massive disruption and escalating costs. Even if it passes the legislature, California Gov. Jerry Brown hasn’t endorsed the idea and new taxes may require a statewide ballot measure, which are always hard-fought campaigns.

The California Chamber of Commerce said the costs would likely be far higher than what was projected and the taxes imposed on employers would trigger major job losses.

State Sen. Jim Nielsen (R-Tehama), a member of the Appropriations panel, expressed similar concerns. “The impact on employers will be astounding,” Nielsen said. “How can you say this will be fiscally prudent for the state? The state has never gotten anything right in health care.”

State Sen. Steven Bradford (D-Gardena) also preached caution, questioning whether state agencies are up to the task. “I don’t want California to move toward a program that is not sustainable and one that we can’t manage,” Bradford said.

Other states have taken a close look at single-payer and balked. Colorado voters rejected a ballot measure last year that would have used payroll taxes to fund a near-universal coverage system.

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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