Anthem to Tackle Rx Drug Abuse

Anthem Blue Cross launched the Pharmacy Home Program to help high-risk individual and group members reduce addiction to opioids and other prescription drugs. The program also aims to improve drug safety and healthcare quality by choosing a single home pharmacy for patients in the program. The program targets members who meet these criteria within a 90-day period:

  • Filled five or more prescriptions for a controlled-substance or filled 20 or more prescriptions, not limited to controlled substances.
  • Visited three or more health care providers for controlled substance prescriptions or 10 or more providers not limited to controlled substances
  • Filled controlled substances at three or more pharmacies or filled prescriptions for 10 or more pharmacies not limited to controlled substances.

The Pharmacy Home program notifies prescribers in writing of the decision to include the member in the program. The prescriber gets a three-month member prescription history. If the member does not change behavior within 60 days of the first letter, the member is asked to choose a single pharmacy location to fill all medications for a year, with a few exceptions. Those with a diagnosis or prescription history for HIV, sickle cell anemia, multiple sclerosis, cancer, hospice, and palliative care are exempted from the program.

Californians with Individual Health Coverage Spent Significantly Less on Healthcare

California residents who bought insurance through the individual market spent significantly less on health care in 2014 than they did the year before. The year, 2014 marks the first year of the Affordable Care Act (ACA). The report by the California HealthCare Foundation reveals that median out-of-pocket spending for families with individual coverage dropped from $7,345 in 2013 to $4,893 in 2014. Thirty-five percent of Californians with individual coverage said that health care costs ate up more than 10% of their household income compared to 43% in 2013. The reduced spending is likely due to premium tax credits and cost-sharing subsidies available for the first time in 2014 through Covered California. Spending declines were more pronounced in California than in the rest of the country. In fact, it’s likely California’s spending declines helped pull down the national averages.

Health Plans Expect Group Premium Increase of 7.2% in 2016, 10.8% for Individual Plans

Health Plans Expect Group Premium Increase of 7.2% in 2016, 10.8% for Individual Plans
Premium rates  are expected to climb 7.2% for groups and 10.8% for individuals in 2016, according to Sherlock Company’s poll of 69 health plans. The health care cost trend is expected to be 6.6% for groups and 11.9% for individuals. The proportion of health insurance coverage paid  by consumers will increase 11% for groups and 15.6% for individuals.

The figure for individuals refers largely to out-of-pocket cost sharing. Because of buy-downs, actual premium rate increases are expected to be lower.

Individual Health Insurance Market Fails Farmers and Ranchers

Individual Health Insurance Market Fails Farmers and Ranchers
About one in three California family farmers and ranchers must purchase health coverage through the costly individual market, according to a report by the Access Project and commissioned by the California Endowment. Family farmers and ranchers with individual coverage spent about $4,600 more on premiums and out-of-pocket costs than did those with group health coverage. Many of these families average more than $4,000 in medical debt and $1,700 in dental debt. The average health care expenditures constitute 9% to 44% of their income. Fifty-four percent of respondents had household incomes from $20,000 to $99,000. In California, 98% of farms are family farms; they produce $32 billion per year in value; and support more than 1.1 million jobs. They account for about 7.4% of employment in the state.

HSAs and HRAs

In 2014, there was $22.1 billion in health savings accounts (HSAs) and health reimbursement arrangements(HRAs), spread across 10.6 million accounts, according to data from the
2014 EBRI/Greenwald & Associates. In 2008, there were only 4.2 million accounts with
$5.7 billion in assets. The average account balance was $2,077 in 2014, up from $1,356 in 2008.
An increasing number of people have held their account for three or more years. Twenty-seven percent had held their account for three to four years, up from 19% in 2008. Thirteen percent had held their account five or more years, up from 4% in 2008. Accounts with an employer contribution had an average balance of $2,403 while those without an employer contribution had an average balance of $2,056.

People who had held an HRA or HSA for five years or more had $3,092 in their account. Those who had held an account for less than a year had less than $1,500 in their account. In general, average account balances have grown over the longer term regardless of how long the account had been open. The report also found the following:

• Average rollover amounts increased from $1,165 in 2013 to $1,244 in 2014.
• $8.9 billion was rolled over in 2014, down from $9.4 billion in 2013.
• 11% of people had held an account for more than a year without a rollover in 2014.
• Rollover amounts increased with the length of time an individual had held an account. In 2014, those who had held an account one to two years rolled over an average of $982; those who had held an account three to four years rolled over an average of $1,421; and those who had held an account five or more years rolled over an average of $1,428.
• Accounts with an employer contribution had a higher amount rolled over than those without an employer contribution.
• Accounts with an employer contribution had an average rollover of $1,280 while those without an employer contribution had an average rollover of $1,069.

Rand: ACA will not lead to widespread premium hikes

The Affordable Care Act will affect individual and small-group health insurance prices differently state by state but it will not raise premiums overall. Premiums could soar by up to 43% on the individual market in Ohio, North Dakota and Minnesota. Rates could drop in New Mexico and Louisiana. The study concludes that the number of uninsured will drop significantly and challenges forecasts that the law will significantly increase premiums. The Hill/Healthwatch blog (8/29)

Individual Medicare Market to Get a Boost

Many employers are sourcing post-65 retiree health care coverage through the individual Medicare plan market or are considering doing so, according to a survey by Aon Hewitt. The ACA is causing more than 60% of employers to reassess their long-term retiree health strategies.

More than 40% companies that have decided to change their strategy for post-65 retirees are now directing retirees to the individual market for coverage, often accompanied by a defined contribution subsidy. More than half of companies that expect to change their post-65 retiree strategies indicate strong interest in this approach.

Maureen Scholl, CEO of Health Care Exchanges for Aon Hewitt said, “Individual market-based retiree health care sourcing strategies can create significant savings opportunities for all stakeholders. We expect to see many employers apply these strategies where possible and supplement them with modified group-based programs for those retiree populations where individual strategies do not make sense.”

Fifty-three percent of employers have altered or their Medicare Part D benefit strategies or plan to do so. Thirty-six percent of companies that have made changes, since 2010, have moved to a group-based Medicare Part D plan and another 21% anticipate doing so.

In 2013, 48% of of employers filed to collect the federal Medicare Part D Retiree Drug Subsidy compared to 63% in 2010. Only 18% plan to file for the subsidy longer-term. Milind Desai, retirement actuary at Aon Hewitt explained that employees had the impetus to take action with the elimination of the tax-favored status of the Retiree Drug Subsidy for 2013 and ACA-prescribed improvements to the Medicare Part D program. While many employers will continue to rely on group-based sourcing, they are likely to migrate toward more cost effective sourcing, he said.

Only 34% of employers offer local/regional or national group-based Medicare Advantage plans, and just 6% consider Medicare Advantage to be a viable group-based strategy. However, 38% of employers say they would consider replacing their group-based Medicare medical indemnity supplement strategies with a national Medicare Advantage PPO if there would be no change in retiree benefits and if it would generate near-term savings.

John Grosso, leader of Aon Hewitt’s Retiree Health Care task force said, “While ACA introduced a number of changes to the Medicare Advantage program, employers generally want to see consistent performance over time and a stable federal funding commitment before investing in these group-based strategies for the long-term.”

Some settlement strategies with a retiree benefit buy-out enable employers to eliminate their retiree medical commitment completely or in part. Employers are considering the following strategies: purchasing life annuities to provide a fixed income stream in lieu of ongoing medical coverage, establishing and funding a VEBA trust to support continued retiree benefits, or making direct cash lump-sum payments to retirees.

More than a quarter of companies say they would consider a retiree health care settlement strategy for all or a portion of their retiree group if it were cost-effective. Desai said, “We saw tremendous pension settlement activity during 2012, and that trend is continuing in 2013. Companies looking to shrink benefit liabilities…can explore…settling their retiree health care obligations as well…There are a number of tax, legal and market hurdles that limit the feasibility of settling retiree medical program commitments in a cost-effective manner, but this can change in the future.” For more information, visitwww.aonhewitt.com.

Individual Life Insurance Premiums Increase

New annualized premium for individual life insurance grew 7% in the first quarter of 2013, with every major product line experiencing positive premium growth, according to a LIMRA survey. Total individual policy count had been increasing slightly over the last two years, but fell 5% in the first quarter. All product lines except term experienced declines in policy count.

Universal life (UL) premium grew 8% in the first quarter, mostly because of strong indexed UL sales. IUL premium increased 23% compared to the first quarter last year, which is the 16th consecutive quarter of growth. UL premium represents 40% of the total individual life insurance market.

Universal life was the biggest driver of growth in the first quarter of 2013. “IUL offers upside potential without the worry of market-related loss, which continues to appeal to today’s buyers,” said Ashley Durham, senior analyst, LIMRA Product Research. UL policy count dropped 18% in the quarter. LIMRA attributes much of the decline to companies discontinuing their term-UL products.

Lifetime guaranteed (LTG) UL premium increased 9% through first quarter 2013. Companies cited improved competitive positions, fire sales, and the ability to keep cost increases to a minimum. LTG now represents 35% of UL premium, down from a high of 53% in 2009. It still represents the largest share of new UL premium.

Whole life sales remained strong in the first quarter of 2013. Premium increased 7% in the first quarter, which is the 15th consecutive quarter of positive growth. WL policy count declined 5% compared to the first quarter of last year. WL market share was 33% in the first three months of 2013.

Term premium grew 3% and policy count grew 1% in the first quarter. More than a third of term writers reported positive growth. Variable universal life (VUL) premium grew 10% in the first quarter, mainly due to sales of small corporate-owned life insurance and private placement. VUL policy count dropped 5% in the first quarter. VUL policy count hasn’t increased for 34 consecutive quarters. For more information, visit www.limra.com.

Rate Shock: In California, Obamacare to Increase Individual Health Insurance Premiums by 64-146%

Angela Braly, then-CEO of WellPoint, testified before Congress about allegations that its California unit, Anthem Blue Cross, was raising premiums on some customers by more than 30 percent. Last week, California announced that the Affordable Care Act would increase non-group insurance premiums by as much as 146 percent. (Image courtesy U.S. House of Representatives)

 

One of the most serious flaws with Obamacare is that its blizzard of regulations and mandates drives up the cost of insurance for people who buy it on their own. This problem will be especially acute when the law’s main provisions kick in on January 1, 2014, leading many to worry about health insurance “rate shock.”

Last week, the state of California claimed that its version of Obamacare’s health insurance exchange would actually reduce premiums. “These rates are way below the worst-case gloom-and-doom scenarios we have heard,” boasted Peter Lee, executive director of the California exchange.

But the data that Lee released tells a different story: Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.

Lee’s claims that there won’t be rate shock in California were repeated uncritically in some quarters. “Despite the political naysayers,” writes myForbes colleague Rick Ungar, “the healthcare exchange concept appears to be working very well indeed in states like California.” A bit more analysis would have prevented Rick from falling for California’s sleight-of-hand.

Here’s what happened. Last week, Covered California—the name for the state’s Obamacare-compatible insurance exchange—released the rates that Californians will have to pay to enroll in the exchange. “The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

That’s the sentence that led to all of the triumphant commentary from the left. “This is a home run for consumers in every region of California,” exulted Peter Lee.

Except that Lee was making a misleading comparison. He was comparing apples—the plans that Californians buy today for themselves in a robust individual market—and oranges—the highly regulated plans that small employers purchase for their workers as a group. The difference is critical.

Obamacare to double individual-market premiums

If you’re a 25 year old male non-smoker, buying insurance for yourself, the cheapest plan on Obamacare’s exchanges is the catastrophic plan, which costs an average of $184 a month. (That’s the median monthly premium across California’s 19 insurance rating regions.)

The next cheapest plan, the “bronze” comprehensive plan, costs $205 a month. But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the average cost of the five cheapest plans was only $92. In other words, for the average 25-year-old male non-smoking Californian, Obamacare will drive premiums up by between 100 and 123 percent.

Under Obamacare, only people under the age of 30 can participate in the slightly cheaper catastrophic plan. So if you’re 40, your cheapest option is the bronze plan. In California, the median price of a bronze plan for a 40-year-old male non-smoker will be $261. But on eHealthInsurance, the average cost of the five cheapest plans was $121. That is, Obamacare will increase individual-market premiums by an average of 116 percent.

For both 25-year-olds and 40-year-olds, then, Californians under Obamacare who buy insurance for themselves will see their insurance premiums double.

Impact highest in Bay Area, Orange County, and San Diego

In the map below, I illustrate the regional variations in Obamacare’s rate hikes. For each of the state’s 19 insurance regions, I compared the median price of the bronze plans offered on the exchange to the median price of the five cheapest plans on eHealthInsurance.com for the most populous zip code in that region. (eHealth offers more than 50 plans in the typical California zip code; focusing on the five cheapest is the fairest comparator to the exchanges, which typically offered three to six plans in each insurance rating region.)

As you can see, Obamacare’s impact on 40-year-olds is steepest in the San Francisco Bay area, especially in the counties north of San Francisco, like Marin, Napa, and Sonoma. Also hard-hit are Orange and San Diego counties.

According to Covered California, 13 carriers are participating in the state’s exchange, including Anthem Blue Cross (NYSE:WLP), Health Net (NYSE:HNT), Molina (NYSE:MOH), and Kaiser Permanente. So far, UnitedHealthCare (NYSE:UNH) and Aetna (NYSE:AET) have stayed out.

Spinning a public-relations disaster

It’s great that Covered California released this early the rates that insurers plan to charge on the exchange, as it gives us an early window into how the exchanges will work in a state that has an unusually competitive and inexpensive individual market for health insurance. But that’s the irony. The full rate report is subtitled “Making the Individual Market in California Affordable.” But Obamacare has actually doubled individual-market premiums in the Golden State.

How did Lee and his colleagues explain the sleight-of-hand they used to make it seem like they were bringing prices down, instead of up? “It is difficult to make a direct comparison of these rates to existing premiums in the commercial individual market,” Covered California explained in last week’s press release, “because in 2014, there will be new standard benefit designs under the Affordable Care Act.” That’s a polite way of saying that Obamacare’s mandates and regulations will drive up the cost of premiums in the individual market for health insurance.

But rather than acknowledge that truth, the agency decided to ignore it completely, instead comparing Obamacare-based insurance to a completely different type of insurance product, that bears no relevance to the actual costs that actual Californians face when they shop for coverage today. Peter Lee calls it a “home run.” It’s more like hitting into a triple play.

Obama attacked insurers in 2010 for much smaller increases

That Obamacare more than doubles insurance premiums for many Californians is especially ironic, given the political posturing of the President and his administration in 2010. In February of that year, Anthem Blue Cross announced that some groups (but not the majority) would face premium increases of as much as 39 percent. The White House and its allies in the blogosphere, cynically, claimed that these increases were due to greedy profiteering by the insurers, instead of changes in the underlying costs of the insured population.

“These extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy,” said Health and Human Services Secretary Kathleen Sebelius. “[Anthem’s] strong financial position makes these rate increases even more difficult to understand.” The then-Democratic Congress called hearings. Even California Insurance Commissioner Steve Poizner, a Republican running for governor, decided to launch an investigation.

http://www.forbes.com/sites/theapothecary/2013/05/30/rate-shock-in-california-obamacare-to-increase-individual-insurance-premiums-by-64-146/

What Clients Need to Know About ACA Changes

Susan Polk, a health insurance agent in San Luis Obispo, issued an advisory to help her clients sort out the Affordable Care Act (ACA), “Some people think that, come January 2014, a new insurance card will magically appear in their mailbox. This is most certainly not true. Enrollment will not be automatic, except in certain circumstances when you participate in an employer group plan of more than 200 employees, and you must make choices among various options, choose a plan, and enroll yourself and family members,” Polk says. She outlines the following key points:

 Individual health insurance – All insurance is guaranteed issue, meaning you are guaranteed to get coverage. There are no waiting periods for pre-existing conditions. Higher premiums cannot be charged for any health conditions, although an individual can be charged up to 50% more for smoking. California has decided not to implement this option.

 Free or low-cost health insurance – Individuals and families making less than 138% of the Federal Poverty Level (also known as the Federal Income Guidelines) will be eligible for MediCal in California (133% will be eligible for Medicaid in most other states). There is no longer an asset test, so people can now hold onto their retirement plans and other property and still qualify for free or greatly reduced medical care.

• Health Plans Offered – Insurance companies can offer four plans of insurance. Bronze plans must provide at least 60% coverage. Silver plans must provide at least 70% of coverage. Gold plans must provide at least 80% of coverage, and Platinum plans must provide at least 90% coverage. Deductibles and co-pays may vary from company to company. The only requirement is that they can prove that the actuarial value of the coverage meets the minimum percentages.

• Premium subsidies – Individuals and families making between 138% and 400% of the Federal Poverty Level will be eligible for premium subsidies. Your eligibility in 2014 will depend on your income in 2012. Each subsequent year, the eligibility will be based on your income in the calendar year two years prior, for example, in 2015 your subsidy would be based on your 2013 income. By purchasing insurance through the Health Benefit Exchange, they will be subsidized for the difference between the second lowest cost Silver Plan and the amount they are expected to pay, which varies from 2% to 9.5% of the Modified Adjusted Gross Income. For those who make over 400% of the Federal Poverty Level, there is no subsidy. However, they will be able to purchase any of the same products outside of the Exchange with no underwriting.

• Individual Mandate – Individuals will be required to purchase medical insurance starting in January 1, 2014. This is called the ìIndividual Mandate. Those not enrolling will pay a penalty along with their income taxes annually to the Internal Revenue Service, beginning in 2015. The penalty for not participating in 2014 will be the greater of 1% of Modified Adjusted Gross Income or $95, whichever is greater. This will increase each year, until it is the greater of 2% or $295.

• When to Enroll – The first open enrollment will start on October 1, 2013, and will continue until March 31, 2014. After that, open enrollments will occur each fall between October 15th and December 7th. There will be no enrollment into individual insurance outside of open enrollment except for certain qualifying events, including losing other coverage, birth, divorce, death, and a few other life events.

• Grandfathered Plans – If you have present individual insurance, you may be able to keep it, if your original effective date was before March 23, 2010, and you have not made substantial changes to your policy. In this case, your plan is said to be grandfathered and you can keep the plan even after ObamaCare is fully implemented. President Obamaís message to Americans in January of 2010 was that if we liked our health plans, that we would be able to keep it. He makes good on that promise if your plan is grandfathered. If your plan is not grandfathered, it will go away on December 31, 2013. You will then have a choice of any health plan offered by any health insurer in your county.

• Why enroll through a broker? – Private insurance brokers will go through a formal training process to be eligible to enroll folks in the Health Insurance Exchange (in California, this is known as Covered California). Health insurance brokers are qualified to assist people. Their training and experience with health insurers will make them the optimal choice for your enrollment needs. They can help you choose the best plan for your circumstances and help you with the tools youíll need to find a doctor and access care.

Polk offers the following advice for 2013:
• Know your income and optimize the results. Falling above the 400% threshold will mean paying 100% of the cost of your health insurance with no subsidy. Some individuals may not want to fall below the 138% (in California, 133% in other States), as that would mean eligibility in MediCal or Medcaid and could restrict access to personal physicians.

• If your plan is grandfathered, don’t make any changes until after the summer or fall. A synopsis of plans will be available later in 2013. At that time, you will be able to preview plans and see how the premiums compare to your present plan. It is expected that once the Affordable Care Act is fully implemented, grandfathered plans will see much lower premium increases.

• Make your appointment early. We will begin making appointments in August for the October enrollment.

• Keep your records handy. You may be asked to bring your 2012 tax return to your appointment, and other important records. This information will help insurance agents quickly determine your eligibility for subsidies and help you get the best result. All personal information is kept strictly confidential.

Last Updated 12/01/2021

Arch Apple Financial Services | Individual & Family Health Plans, Affordable Care California, Group Medical Insurance, California Health Insurance Exchange Marketplace, Medicare Supplements, HMO & PPO Health Care Plans, Long Term Care & Disability Insurance, Life Insurance, Dental Insurance, Vision Insurance, Employee Benefits, Affordable Care Act Assistance, Health Benefits Exchange, Buy Health Insurance, Health Care Reform Plans, Insurance Agency, Westminster, Costa Mesa, Huntington Beach, Fountain Valley, Irvine, Santa Ana, Tustin, Aliso Viejo, Laguna Hills, Laguna Beach, Laguna Woods, Long Beach, Orange, Tustin Foothills, Seal Beach, Anaheim, Newport Beach, Yorba Linda, Placentia, Brea, La Habra, Orange County CA

12312 Pentagon Street - Garden Grove, CA 92841-3327 - Tel: 714.638.0853 - 800.731.2590
Email:
Jay@ArchApple.com
Copyright @ 2015 - Website Design and Search Engine Optimization by Blitz Mogul