HHS to require proof of eligibility for late health plan enrollment

People who want to use HealthCare.gov to subscribe to a health insurance plan or change plans outside the open enrollment period must now prove that they are eligible, marketplace CEO Kevin Counihan said. The requirement is “a much-needed step in the right direction,” said AHIP spokeswoman Clare Krusing. The New York Times (free-article access for SmartBrief readers) (2/24)

Medigap Continues to Provide Critical Financial Protection

Medicare supplement (Medigap) insurance remains a critical source of health coverage for low-income beneficiaries, particularly those living in rural areas, according to a  report from America’s Health Insurance Plans (AHIP). Enrollment has continued to grow over the past several years with more than 11 million Medicare beneficiaries enrolled in 2014. Medigap coverage helps cover significant out-of-pocket costs that are not covered by Medicare, such as deductibles, coinsurance, and copayments. As a result, Medigap beneficiaries are overwhelmingly satisfied with their coverage, and more than 9 in 10 would recommend Medigap to a friend or relative. The follow are key findings:

  • 48% of Medicare beneficiaries without any additional insurance coverage had Medigap policies in 2013.
  • 58% of Medigap policyholders in 2013 were women, and 42% were men.
  • 45% of Medigap policyholders were 75 years or older compared to only 38% of all Medicare beneficiaries.
  • 46% of rural Medigap policyholders and 39% of all Medigap enrollees had annual incomes below $30,000 in 2013.

CMS Undermines Medicare Advantage Chronic Care

CMS underestimates costs for people with multiple chronic conditions to the tune of  $2.6 billion annually, according to a study by Avalere. In the spring of 2015, CMS finalized changes to the risk adjustment system, targeting chronic disease prevention programs. These changes significantly limit health plans’ early intervention efforts and seniors’ benefits. Under the risk adjustment model, CMS substantially under-predicts expenditures for providing care to beneficiaries, including those with the following conditions:

  • Chronic kidney disease.
  • Osteoarthritis.
  • Rheumatoid arthritis.
  • Alzheimer’s disease and related conditions.

AHIP president and CEO Marilyn Tavenner said, “Further cuts to Medicare Advantage and seniors’ benefits are…at odds with…delivering better care and better value for beneficiaries. Rather than relying on an antiquated fee-for-service approach…, CMS should focus on strengthening Medicare Advantage and the innovative programs that improve seniors’ health.”

Last year, more than 340 members of Congress urged CMS to protect seniors’ coverage and provide stability to the program. Ahead of the upcoming February rate notice, more than 2 million seniors from AHIP’s Coalition for Medicare Choices have mobilized, urging Washington to defend the Medicare Advantage program from further payment cuts

CMS releases proposed rule on Medicaid managed care

A proposed rule would set a medical loss ratio of 85% for privately run Medicaid managed care plans, require states to establish quality rating systems for the plans and allow states flexibility in setting network advocacy standards. Plans that spend less than 85% of premium revenue on health care would not be required to rebate the difference. AHIP interim CEO Dan Durham lauded the flexibility plans would have under the law, but industry leaders criticized the inclusion of the MLR. Kaiser Health News (5/26), The Hill (5/26)

How Proposed Medicare Advantage Cuts Would Affect Enrollees

A recent Oliver Wyman report finds that CMS’ proposed changes to Medicare Advantage payments would result in a 1.2% cut in 2016. Medicare Advantage payments have already been cut by about 10% over the past two years. These cuts, combined with another payment reduction, could leave millions of seniors facing higher costs and reduced benefits — in some states as much as $120 per month on average, according to the report.

“Seniors cannot afford another cut to their Medicare Advantage coverage. Policymakers should take action to stabilize Medicare Advantage funding for the millions of beneficiaries who depend on the program,” said AHIP President and CEO Karen Ignagni.

The chart below highlights states most affected by the change in payments from 2013-2016:

STATE ENROLLMENT IMPACT
New York 1,183,621 > $120
Texas 1,066,577 > $120
Louisiana 228,196 > $120
California 2,087,054 $100-$120
New Jersey 207,954 $100-$120
New Mexico 104,826 $100-$120
Hawaii 88,336 $100-$120
Utah 90,079 $100-$120
Florida 1,529,840 $80-$100
North Carolina 489,578 $80-$100

As CMS prepares to finalize payment rates for next year, a growing number of voices are asking the agency to protect seniors from any further cuts. Bipartisan majorities in Congress—including 53 senators and 239 representatives—recently sent letters urging CMS to prevent additional cuts to coverage and benefits. Final payment rates will be released on April 6, 2015.

Premiums Are Lower When There Are More Hospitals

More competitive hospital markets had more than 8% reductions in premiums. That translates into savings of more than $20 a month for consumers in markets with less hospital concentration, according to a report commissioned by America’s Health Insurance Plans (AHIP). The report, authored by Scott Thompson, Ph.D. and published in the Antitrust Health Care Chronicle, finds that hospital systems with strong market influence can often negotiate higher rates for their services. Each additional effective hospital competitor is associated with a 1.5% drop in the cost of insurance premiums. Consumers in more competitive markets, such as Los Angeles, saw average monthly savings of $32.90 in reduced premiums when compared to consumers purchasing coverage in San Francisco, a market with fewer hospital competitors.

AHIP president and CEO Karen Ignagni said, “Consumers and employers benefit from competitive markets that promote affordability and choice. More needs to be done to encourage competition among providers. Hospital consolidation comes with a price that consumers and employers simply cannot afford.”

Report: LTC policy often can pay much of care costs

Most long-term-care insurance policies, including those with somewhat diminished buying power after many years, should be able to cover the bulk of costs for home care and assisted-living stays, as well as at least half of the cost of nursing home care, according to a LifePlans report for AHIP. National Underwriter Life & Health (11/12)

HSAs Provide Financial Flexibility

Fifty-two percent of HSA account holders spent more than 80% of their HSA funds for health care expenses during 2012, according to a survey by America’s Health Insurance Plans (AHIP) and the American Bankers Assn. Since Congress authorized HSA plans in 2004, AHIP has conducted three surveys on HSA banking activity. This latest report measuring the financial activity of more than 1.4 million HSAs, shows consumers taking an active role in managing their health care dollars. Fifty-five percent of HSAs received personal contributions during 2012. While end of the year account balances varied, roughly 80% of accounts had a positive balance that could be carried over to the next year to help pay for future expenses. Fifty-eight percent of accounts had withdrawals during the year. Of those accounts, the average withdrawal during 2012 was $2,081. For more information, visit http://www.hsaalliance.org.

HSA Accounts Provide Financial Flexibility

An HSA plan is a valuable financial tool for consumers, providing flexibility to cover immediate medical expenses and save for health care costs, according to a study by the American Bankers Association (ABA) and America’s Health Insurance Plans (AHIP.) Fifty-five percent of HSAs received personal contributions during 2012. Roughly 80% of accounts had a positive balance that could be carried over to the next year. “This study confirms that HSAs are being used as they were designed: to pay for routine health care needs and to save towards future medical expenses. HSAs have the advantage of offering consumers greater choice and control over their health care,” said Kevin McKechnie of the ABA. The study also reveals the following: • 44% of the accounts received employer contributions. Of those accounts, the average personal contribution was $2,337, and the average contribution from employers was $1,142. • 58% of accounts had withdrawals during the year. Of those accounts, the average withdrawal during 2012 was $2,081. • 19% of accounts had $0 available at the end of the year; 31% had $1 to $499; 11% had $500 to $999; 12% had $1,000 to $1,999; 14% had $2,000 to $4,999; and 12% had at least $5,000. For more information, visithttp://www.hsaalliance.org.

Proposed Medicare Advantage cuts will disrupt market, cost seniors, AHIP says

Proposed cuts in federal payments in 2015 to Medicare Advantage plans amount to about 5.9% and will cost each subscriber $420 to $900 more while reducing choice, an analysis by consulting firm Oliver Wyman found. The proposed cuts would result in fewer plans from which seniors could choose, fewer participating health care providers, higher premiums and fewer benefits, and would disproportionately affect low-income seniors, a statement from America’s Health Insurance Plans said. “CMS should keep Medicare Advantage payment rates flat next year to protect seniors from another round of harmful cuts that would put at risk the high-quality coverage they like and rely on today,” said Karen Ignagni, AHIP’s president and CEO. BenefitsPro.com (2/28)

Last Updated 10/14/2020

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