Young Men Saw Steep Premium Increases in 2014

Premiums for ACA plans increased an average of 78% for 23 year-old men and nearly 45% for 23-year-old women in 2014. HealthPocket compared the Obamacare market to the 2013 pre-reform market. Premiums increased 73% for 30-year-old men and 35% for 30-year-old women. Many young people don’t qualify for subsidies because the premium does not reach the percentage of income needed to trigger a subsidy. Premiums increased 37.5% for 63 year-old women and 22.7% for 63 year-old men. Kev Coleman, head of Research & Data at HealthPocket said, “The market trend we observed was an increase in average premium; this increase may have been obscured…by the fact that the first Affordable Care Act health plans were new and had no history against which to declare a rate increase within their state filing.” Some people get subsidies under the Affordable Care Act while others avoid a premium rate-up or rejection due to an expensive pre-existing condition, he added. For more information, visitwww.HealthPocket.com.

Experts predict more private exchanges, more regulations in 2014

As employers with 50 or more full-time employees prepare for the Affordable Care Act’s mandate to take effect in 2015, more privately run insurance exchanges will offer benefits, and consumers will become more cost-conscious, predicts Alan Cohen, chief strategy officer for private exchange firm Liazon. Transparency around health care costs will improve, says Ceci Connolly, managing director of PricewaterhouseCoopers’ Health Research Institute. The Obama administration is likely to extend the March 31 deadline for getting insurance or paying a tax penalty, and it will promulgate more rules implementing the ACA, says Catamaran’s Ellen Nelson. USA Today (1/1)

2014 Medicare Drug Plans Vary Widely in Availability of Drugs and Restrictions

Slightly more drugs will be available under Medicare stand-alone prescription drug plans (PDPs) in 2014, and fewer will be available under the Medicare Advantage prescription drug benefit (MAPD), according to analysis by HealthPocket.

The variation is significant: MAPD plans range from 956 to 2,334, and PDP plans range from 995 to 2,333. On average, MAPD plans will include 1492 drugs on plan formularies, and PDP plans will include 1,456. An estimated 90% of Medicare enrollees have a drug benefit. As with the private health insurance market, each Medicare plan has a formulary. Consumers pay the full cost of drugs that are not on the plan formulary. Even if a drug is on the formulary, plans can restrict access by limiting the quantity, requiring prior authorization, and mandating a step therapy process for certain medications.

In 2014, MAPD plans will carry quantity limits on 0% to 32% of drugs, prior authorization on 3% to 37%, and step therapy on 0% to 11%. PDP plans will have quantity limits on 1% to 31% of drugs, prior authorization on 7% to 32%, and step therapy on 0% to 9%. Kaiser’s MAPD plan offers a high number of drugs, with 2,320 drugs on its formulary, approaching the industry maximum of 2,333. None of the drugs on its formulary carries quantity limits or step therapy restrictions, and prior authorization is required for only 3% of all drugs offered.

Steve Zaleznick of HealthPocket stressed that Medicare patients need to do their homework during open enrollment to figure out which plans give them the best deal. The most important question is whether their prescriptions are on the plan’s formulary and what hoops they may have to jump through to actually get the drugs, he added. Consumers can review Medicare plan options for free using HealthPocket’s Medicare comparison tool at http://www.healthpocket.com/medicare.

Open Enrollment Season Foreshadows Significant Changes in 2014

As employees make their open enrollment selections, they are likely to see only minimal plan changes compared to last year. However, employees can expect significant change in 2014 and beyond with mounting cost pressures, health care reform, the emergence of new network configurations, and the rapid development of new health care delivery models, according to a survey by experts at Towers Watson.

Sixty-three percent of employers expect little or no change to their health benefit plan design or employee premium subsidies for 2013. Yet 2014 promises to be a different story, with 42% of employers considering changes to plan options and 31% considering reductions in subsidization of coverage for spouses or dependents. Likewise, the percentages of companies planning to use spousal waivers or surcharges when an employee’s spouse has access to employer-provided coverage elsewhere is expected to increase moderately in 2013, but grow significantly in 2014.

The survey projects a 5.3% net increase in total health benefit plan costs after any plan changes are taken into account, increasing the average cost per active employee from $10,925 in 2012 to $11,507 in 2013. Of the 2013 total, employees will pay an average of $2,596, or 22.6%, up from $2,436 in 2012.

The year 2013 is a bridge to an emerging health care landscape, said Randall Abbott, senior health care consulting leader at Towers Watson. Employers are working to deliver greater value for each dollar spent on health care in response to continued cost escalation, the rapidly changing provider marketplace and the many provisions of health care reform. This will translate into new plan options, new approaches to care delivery, and a marked shift to narrow provider networks.

Next year, employees should be on the lookout  for new health care plan designs that encourage them to make more informed decisions or bear a greater financial burden for their healthcare. Employees will see new plans emerging with different levels of coverage based on cost or quality, new networks of high-quality providers, and new modes of care delivery, such as retail care, telemedicine, and employer-sponsored onsite health coaching. They can also expect more interactive tools for selecting medical providers and services based on price and quality. Employers will offer incentives for using high-performance networks. Employers will make employees more accountable for their personal health decisions.

Employees will get more information and choices than ever. The next few years will mark a major reshaping of how health care is delivered, said Ron Fontanetta, senior health care consulting leader at Towers Watson. The use of reward or penalties based on biometric outcomes (achieving a target BMI and cholesterol level) could skyrocket in the next two years. Thirteen percent of employers use such incentives; 9% plan to add them in 2013; and another 52% are considering them for 2014 or 2015.

Six percent of employers plan to add account-based health plans in 2013 and another 19% are considering adding them in 2014 or 2015. While 12% offer an ABHP as their only plan option, this percentage could climb to 46% by 2014.

Fifty-nine percent of employers are somewhat likely to very likely to stop sponsoring retiree medical plans for post-65 retirees in 2014 or 2015. Instead, many employers will direct retirees to private Medicare exchanges. For more information, visit towerswatson.com.

Last Updated 01/19/2022

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