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Business

Some auto insurers are refusing to cover some Hyundai and Kia models

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CNN
 — 

Progressive and State Farm, two of America’s largest auto insurers, are refusing to write policies in certain cities for some older Hyundai and Kia models that have been deemed too easy to steal, according to the companies.

Several reports say the companies have stopped offering insurance on these vehicles in cities that include Denver, Colorado and St. Louis, Missouri. The insurance companies did not tell CNN which cities or states were involved.

The Highway Loss Data Institute released insurance claims data last September that confirmed what various social media accounts had been saying: Some 2015 through 2019 Hyundai and Kia models are roughly twice as likely to be stolen as other vehicles of similar age, because many of them lack some of the basic auto theft prevention technology included in most other vehicles in those years, according to the HLDI.

Specifically, these SUVs and cars don’t have electronic immobilizers, which rely on a computer chip in the car and another in the key that communicate to confirm that the key really belongs to that vehicle. Without the right key, an immobilizer should do just that – stop the car from moving.

Immobilizers were standard equipment on 96% of vehicles sold for the 2015-2019 model years, according the HLDI, but only 26% of Hyundais and Kias had them at that time. Vehicles that have push-button start systems, rather than relying on metal keys that must be inserted and turned, have immobilizers, but not all models with turn-key ignitions do.

Stealing these vehicles became a social media trend in 2021, according to HLDI, as car thieves began posting videos of their thefts and joyrides and even videos explaining how to steal the cars. In Wisconsin, where the crimes first became prevalent, theft claims of Hyundais and Kias spiked to more than 30 times 2019 levels in dollar terms.

“State Farm has temporarily stopped writing new business in some states for certain model years and trim levels of Hyundai and Kia vehicles because theft losses for these vehicles have increased dramatically,” the insurer said in a statement provided to CNN. “This is a serious problem impacting our customers and the entire auto insurance industry.”

Progressive is also cutting back on insuring these cars in some markets, spokesman Jeff Sibel said in an emailed statement.

“During the past year we’ve seen theft rates for certain Hyundai and Kia vehicles more than triple and in some markets these vehicles are almost 20 times more likely to be stolen than other vehicles,” he wrote. “Given that we price our policies based on the level of risk they represent, this explosive increase in thefts in many cases makes these vehicles extremely challenging for us to insure. In response, in some geographic areas we have increased our rates and limited our sale of new insurance policies on some of these models.”

Progressive continues to insure those who already have policies with the company, he said. Progressive is also providing them with advice on how to protect their vehicles from theft.

Michael Barry, a spokesman for the Insurance Information Institute, said it was very unusual for auto insurers to simply stop writing new policies on a given make or model of vehicle.

“They generally want to expand their market share depending on where they’re doing business,” he said.

Hyundai and Kia operate as separate companies in the United States, but Hyundai Motor Group owns a large stake in Kia and various Hyundai and Kia models share much of their engineering.

Engine immobilizers are now standard on all Kia vehicles, according to a statement by the automaker and the company says it has been developing and testing security software for vehicles not originally equipped with an immobilize. Kia said it has begun notifying owners of the availability of this software, which is being provided at no charge.

Hyundai said it is providing free steering wheel locks to some police departments around the country to give local residents who have easily stolen Hyundai models. Hyundai dealers are also installing free security kits for the vehicles, the company said.

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US

Women living in states with abortion bans suffer greater economic insecurity

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New York
CNN
 — 

Women living in states that restrict or ban abortion face greater economic insecurity than those living in states where they have access, new research finds.

Since the nearly seven months since the Supreme Court overturned Roe v. Wade, half of all states – 26 in total – have implemented new abortion restrictions or all-out bans.

In nearly all 26 states, there are lower minimum wages, unionization levels, access to Medicaid and unemployment benefits, as well as higher rates of incarceration than states with more lenient abortion policies, according to new research by the Economic Policy Institute.

“These economic policies all compound on each other. And you add to that an abortion ban, it just compounds this financial stress, this economic insecurity,” said Asha Banerjee, an economic analyst with the institute and the author of the report.

Last year, Treasury Secretary Janet Yellen made a similar argument to the Financial Oversight Council.

“I believe that eliminating the right of women to make decisions about when and whether to have children would have very damaging effects on the economy and would set women back decades,” Yellen told lawmakers in May.

The lack of abortion access has the greatest economic impact on women of color, especially those already in dire financial conditions, according to Banerjee.

“In many of these states, especially the states which have banned abortion, many of the women who are facing economic challenges already are also women of color,” she said.

Raising the minimum wage is a powerful tool that has been known to have significant impact on closing racial income gaps. But nearly two-thirds of abortion restrictive states have a $7.25 minimum wage, the lowest legal hourly wage for most workers in the United States.

The average minimum wage across the 26 states is $8.17, lower than the average $11.92 for states with no restrictions. (Many of those states also have a higher cost of living, however.)

“If the person denied an abortion is also working a minimum wage job, the negative economic effect is compounded,” the report states.

Many of those low-wage jobs also do not offer benefits like health care, which is why access to Medicaid is critical.

“Medicaid is a lifeline for low-income families and low-income women when jobs might not offer adequate healthcare. Medicaid in the immediate postpartum period is especially important,” said Banerjee.

Just 12 states have not expanded Medicaid benefits since the 2010 Obamacare law, and all of them have restrictive abortion policies.

However, some states with total abortion bans, with few exceptions, have expanded Medicaid, including Missouri. And in five other abortion restrictive states (Idaho, Missouri, Nebraska, Oklahoma and South Dakota later this year) residents voted to expand the benefit.

Access to unemployment insurance is another key indicator of a state’s commitment to economic support for residents. Forty-two percent of residents have access to unemployment benefits in states that have abortion protections. Compare that to 30% in states with abortion restrictions.

Even if unemployment is accessible, the amount differs from state to state. For example, in Mississippi, a state with a total abortion ban with limited exceptions, weekly unemployment checks average $217. Meanwhile in Massachusetts, which has a more protective 24-week abortion ban – checks average $556 weekly.

“When you have unemployment insurance it helps create financial stability. These states which have abortion bans also have really terrible unemployment insurance systems with really low benefits which do not help one support oneself,” said Banerjee.

Although women make up a smaller percentage of those incarcerated than men, it is the economic category with the greatest difference between abortion protected and abortion-restricted states. The rate of incarceration in states with restrictive or total bans on abortion is more than one and a half times higher than the rate of incarceration for states with abortion protections.

“It’s very much a racial justice issue because Black and Hispanic women are very disproportionately incarcerated. And that has huge economic impacts on future earnings and the ability to get a job,” said Banerjee.

In some states with abortion restrictions and higher rates of incarceration – legislation has suggested also criminalizing women, doctors or anyone aiding a woman in seeking an abortion.

“The incarceration argument is especially important because in these states where abortion bans have come into play, there’s a huge criminalization aspect,” said Banerjee.

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Business

Alzheimer’s drug lecanemab receives accelerated FDA approval amid safety concerns

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CNN
 — 

The US Food and Drug Administration granted accelerated approval Friday for the Alzheimer’s disease drug lecanemab, one of the first experimental dementia drugs to appear to slow the progression of cognitive decline.

“Alzheimer’s disease immeasurably incapacitates the lives of those who suffer from it and has devastating effects on their loved ones,” Dr. Billy Dunn, director of the Office of Neuroscience in the FDA’s Center for Drug Evaluation and Research, said in a statement. “This treatment option is the latest therapy to target and affect the underlying disease process of Alzheimer’s, instead of only treating the symptoms of the disease.”

Lecanemab will be marketed as Leqembi, the FDA statement said. It has shown “potential” as an Alzheimer’s disease treatment by appearing to slow progression, according to Phase 3 trial results, but it has raised safety concerns due to its association with certain serious adverse events, including brain swelling and bleeding.

In July, the FDA accepted Eisai’s Biologics License Application for lecanemab under the accelerated approval pathway and granted the drug priority review, according to the company. The accelerated approval program allows for earlier approval of medications that treat serious conditions and “fill an unmet medical need” while the drugs continue to be studied in larger and longer trials.

If those trials confirm that the drug provides a clinical benefit, the FDA could grant traditional approval. But if the confirmatory trial does not show benefit, the FDA has the regulatory procedures that could lead to taking the drug off the market.

Lecanemab, a monoclonal antibody, is not a cure but works by binding to amyloid beta, a hallmark of Alzheimer’s disease. In late November, results from an 18-month Phase 3 clinical trial published in The New England Journal of Medicine showed that lecanemab “reduced markers of amyloid in early Alzheimer’s disease and resulted in moderately less decline on measures of cognition and function than placebo at 18 months but was associated with adverse events.”

The results also showed that about 6.9% of the trial participants given lecanemab, as an intravenous infusion, discontinued the trial due to adverse events, compared with 2.9% of those given a placebo. Overall, there were serious adverse events in 14% of the lecanemab group and 11.3% of the placebo group.

The most common adverse events in the lecanemab group were reactions to the intravenous infusions and abnormalities on their MRIs, such as brain swelling and bleeding called amyloid-related imaging abnormalities, or ARIA, which can become life-threatening.

Some people who get ARIA may not have symptoms, but it can occasionally lead to hospitalization or lasting impairment. And the frequency of ARIA appeared to be higher in people who had a gene called APOE4, which can raise the risk of Alzheimer’s disease or other dementias. ARIA “were numerically less common” among APOE4 noncarriers, the study showed.

The drug’s prescribing information carries a warning about ARIA, the FDA says.

The trial results also showed that about 0.7% of participants in the lecanemab group and 0.8% of those in the placebo group died, corresponding to six deaths in the lecanemab group and seven in the placebo group.

The Alzheimer’s Association welcomed Friday’s decision.

“By slowing progression of the disease when taken in the early stages of Alzheimer’s, individuals will have more time to participate in daily life and live independently,” President and CEO Joanne Pike said. “This could mean more months of recognizing their spouse, children and grandchildren. This could also mean more time for a person to drive safely, accurately and promptly take care of family finances, and participate fully in hobbies and interests.”

More than 6.5 million people in the United States live with Alzheimer’s disease, according to the Alzheimer’s Association, and that number is expected to grow to 13.8 million by 2060.

Lecanemab will carry a wholesale price of $26,500 per patient per year, the drug’s manufacturers announced Friday.

Biogen and Eisai have listed the drug slightly below the reduced price of the Alzheimer’s medication Aduhelm, which now costs an average patient about $28,200. The companies had to lower the cost of Aduhelm – originally set at $56,000 per patient per year – after insurers balked at covering it.

In justifying the cost of Leqembi, the companies said in a news release that based on the estimated quality of life gained by people who take it, the value of the medication to society is around $37,000 a year, but they chose to go lower “aiming to promote broader patient access, reduce overall financial burden, and support health system sustainability.”

The wholesale cost of a drug is akin to a car’s sticker price. It isn’t necessarily what patients will pay after insurance or other discounts are factored in.

Insurance coverage for this medication is not a given, however. Medicare restricted its coverage of lecanemab’s sister drug, Aduhelm, after clinical trials showed questionable benefits to patients. The agency agreed to cover the drug only for people enrolled in registered clinical trials, which limited access to the medication.

Center for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure said after the FDA’s decision Friday that her office would quickly review Leqembi, but for now, because of its accelerated approval, it will be covered the same way Aduhelm is covered.

“At CMS, we will continue to expeditiously review the data on these products as they become available and are committed to timely access to treatments, including drugs, that improve clinically meaningful outcomes,” Brooks-LaSure said in a statement.

Last month, the Alzheimer’s Association filed a formal request asking CMS to provide “full and unrestricted coverage” Alzheimer’s treatments approved by the FDA.

“What the FDA did today in granting accelerated approval to Leqembi was the right decision. But what CMS is doing by severely restricting coverage for approved treatments is unprecedented and wrong,” Pike said in a statement Friday.

“The FDA carefully reviewed the evidence for Leqembi before granting approval. CMS, in sharp contrast, denied coverage for Leqembi months ago before it had even reviewed this drug’s evidence. CMS has never done this before for any drug, and it is clearly harmful and unfair to those with Alzheimer’s. Without access to and coverage of this treatment and others in its class, people are losing days, weeks, months – memories, skills and independence. They’re losing time.”

CMS told CNN that it will review and respond to the association’s request. The agency also noted that it continues to stay informed about ongoing clinical trials, including the most recent lecanemab results published in the New England Journal of Medicine. Also, it has met with drugmakers to learn about their efforts since CMS’s coverage decision was announced.

The FDA approved Aduhelm for early phases of Alzheimer’s disease in 2021 – but that decision has been shrouded in controversy as a congressional investigation found last week that the FDA’s “atypical collaboration” to approve the high-priced drug was “rife with irregularities.”

Before Aduhelm, the FDA had not approved a novel therapy for the condition since 2003.

Aduhelm’s FDA approval and initial hefty price tag hit Medicare’s Part B premiums, driving up the 2022 standard monthly payments by 14.5% to $170.10.

About $10 of the premium spike – or just under half the amount – was due to Aduhelm, a CMS official told CNN in late 2021.

The premium increase was set before Medicare announced its limited coverage of the drug, but its actuaries had to make sure that the program had sufficient funding in case Aduhelm was covered.

Medicare’s decision, as well as Biogen’s slashing of the drug’s cost, prompted a decline in monthly premiums for 2023 to $164.90.

The FDA’s accelerated approval of lecanemab was expected, said Dr. Richard Isaacson, director of the Alzheimer’s Prevention Clinic in the Center for Brain Health at Florida Atlantic University’s Schmidt College of Medicine.

Isaacson said lecanemab can be “another tool” in his toolbox to fight Alzheimer’s disease.

“I will prescribe this drug in the right person, at the right dose and in a very carefully monitored way, but this drug is not for everyone,” he said.

“I would do genetic testing for APOE4 first. I would have a frank discussion with my patients,” he said. “If someone is having side effects, if someone is on a blood-thinning medication, if someone has a problem, they need to discuss this with the treating physician, and they need to seek medical attention immediately.”

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World

Oil tankers are getting stuck in the Black Sea. That could become a problem

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CNN
 — 

A bottleneck is building across an important trading route for oil, which if left unresolved could knock global supply and boost prices at a fragile moment for energy markets.

As of Thursday, 16 oil tankers traveling south from the Black Sea were waiting to cross the Bosphorus strait into the Sea of Marmara, an increase of five from Tuesday, according to a report from Istanbul-based Tribeca Shipping Agency. A further nine tankers were waiting to cross southbound from the Sea of Marmara through the Dardanelles strait into the Mediterranean.

The snarl-up in waterways controlled by Turkey, which Turkish officials said is mostly affecting crude oil shipments destined for Europe, has caught the attention of UK and US government officials who are now in talks with Ankara to resolve the growing impasse.

The snag is linked to a Western price cap on Russian oil that came into effect on Monday. The cap is supposed to limit the Kremlin’s revenues without adding to stress on the global economy by reducing supply. But Turkey is insisting that vessels prove they have insurance that will pay out in light of the new sanctions, before allowing them to pass through the straits linking the Black Sea and Mediterranean.

Although currently causing no disruption to global oil supply and thus prices, the hold-up could become a problem if left unresolved, said Jorge Leon, senior vice president for oil market analysis at Rystad Energy. “This is a very popular route around the world for global trade and specifically for crude,” he told CNN Business.

Countries including Russia, Kazakhstan and Azerbaijan use the Turkish straits to get their oil to world oil markets.

The traffic jam in the Turkish straits arose following the imposition this week of the price cap on Russian oil. The cap bars ship owners carrying Russian oil from accessing insurance and other services from European providers unless the oil is sold for $60 a barrel or less.

In light of the cap, Turkish maritime authorities are concerned about the risk of accidents or oil spills involving uninsured vessels, and are preventing ships from passing through Turkish waters unless they can provide additional guarantees that their transit is covered.

In a notice issued last month by Turkey’s government ahead of the price cap, maritime director general Ünal Baylan said that given “catastrophic consequences” for the country in the event of an accident involving a crude tanker, “it is absolutely required for us to confirm in some way that their [protection and indemnity] insurance cover is still valid and comprehensive.”

The International Group of P&I Clubs, which provides protection and indemnity insurance for 90% of the goods shipped by sea, has said it cannot comply with the Turkish policy.

The Turkish government’s requirements “go well beyond the general information that is contained in a normal confirmation of entry letter” and would require P&I Clubs to confirm coverage even in the event of a breach of sanctions under EU, UK and US law, the UK P&I Club said in a statement.

Turkish officials say this position is “unacceptable” and on Thursday reiterated demands for letters from insurers. “The majority of the crude oil tankers waiting to cross the strait are EU ships and a majority of the petrol is destined for EU ports,” the Turkish maritime authority said in a statement.

“It is difficult to understand why EU-based insurance companies are refusing to provide this letter… for ships that belong to the EU, carrying crude oil to [the] EU when the sanctions in question have been set forth by the EU,” it added.

Western officials, clearly worried about potential disruption to oil supply, say they are in talks with Turkey’s government to resolve the situation.

US Deputy Treasury Secretary Wally Adeyemo told Turkish Deputy Foreign Minister Sedat Onal on a call that the price cap only applies to Russian oil and “does not necessitate additional checks on ships” passing through Turkish waters.

“Both officials highlighted their shared interest in keeping global energy markets well supplied by creating a simple compliance regime that would permit oil to transit the Turkish straits,” the Treasury Department said in a statement.

“The UK, US and EU are working closely with the Turkish government and the shipping and insurance industries to clarify the implementation of the Oil Price Cap and reach a resolution,” according to a statement from the UK Treasury.

“There is no reason for ships to be denied access to the Bosporus Straits for environmental or health and safety concerns,” it added.

Despite the backlog of tankers, the average waiting time to cross the Bosphorus strait is still well below where it was this time last year, according to Leon of Rystad Energy. “Given the reaction from UK and US officials, my hunch is that this is going to be resolved very soon,” he said.

-— Gül Tüysüz in Istanbul contributed to this article.



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