Prescription Drug Use Rises for the Newly Insured

A survey of more than 3,000 U.S. employers finds that 54% are paying at least 5% more for employee medical insurance this year. Nearly one in four has seen increases of at least 10%, according to a study by Arthur J. Gallagher & Co. Sixty-seven percent say that medical and pharmacy benefits are the cornerstone of their employee benefit package and an important tool to recruit and retain talent in a tightening labor market. Telemedicine, now used by 24% of employers, is predicted to reach 42% in 2018. Narrow network healthcare plans show a growth trend from 18% to a predicted 27% in 2018. A rise in adoption of consumer directed health plans is expected from 36% to 51% in 2018. Self-insuring is expected to grow from 28% to 38% in 2018. Fewer than 5% of employers have used a private exchange, but that figure is expected to triple by 2018. Employers that excel at healthcare cost management take a comprehensive, data-driven and multi-year approach to compensation and benefit planning. However, just 8% of employers do multi-year planning with multiple data inputs. Seventy-six percent plan their benefits year-to-year, which puts them in a reactive position and less able to manage costs. For more information, visit ajg.com/NBS2016.

Groups Says California Should Reject the Anthem-Cigna Merger

Consumer Watchdog called on Insurance Commissioner Dave Jones to reject a proposed merger of Anthem and Cigna. Carmen Balber with Consumer Watchdog said, “Insurance industry consolidation has gone too far in California, costing consumers in the form of higher prices, reduced benefits, narrower networks, and fewer choices. It is no longer believable to claim that making the few insurance giants larger could benefit consumers. It’s time to draw a line in the sand. The only action that truly protects California policyholders is for the Dept. of Insurance to reject the Anthem-Cigna deal.” Nine metro areas in California will be among the hardest-hit in the nation if the merger is approved, and nearly every major population center in the state could be affected, according to an American Medical Association analysis using federal merger guidelines,” she said.

The following is a summary of a statement prepared by Consumer Watchdog: If the Anthem-Cigna merger proceeds, Anthem will gain a near-monopoly in the self-insured market at 69% of the market, meaning higher costs and less options for large companies that pay Anthem or Cigna to administer their health plans and employ nearly 4 million Californians. A merged Anthem-Cigna would surpass Kaiser to become the largest insurer in the state. Regulators cannot exact enough concessions from the companies to protect consumers from the negative impacts of an Anthem-Cigna merger.

Consumer Watchdog recommends these conditions for approving the merger:

  • Anthem should commit to not implementing rate hikes that regulators find to be unreasonable.
  • Anthem should be prohibited from upstreaming profits to its parent company while increasing premiums.
  • Anthem should have to disclose details of any administrative services payments to its parent company out of state. This would allow the public to determine whether the payments have been inflated to hide upstreaming of California policyholder money to shareholders.
  • Anthem should not be allowed to remove reserves from California or otherwise require California policyholders to pay for severance, retention, or other compensation packages for executives in connection with the merger.
  • Anthem should immediately submit its provider networks for review.
  • Anthem should commit to expanding network size for all plans that give consumers access to less than 50% of providers in the area.
  • Anthem’s filings with the Dept. of Insurance should be public documents. Grants of confidentiality should only be allowed sparingly, with explanation of the sensitive nature of the withheld documents, if at all.
  • Anthem should be subject to steep penalties for violating any provision of these undertakings, and revocation of approval if there is a pattern of violations.

The Downside of Narrow Networks and High Deductibles

The Downside of Narrow Networks and High Deductibles
Seven in 10 emergency physicians are seeing patients with health insurance who have delayed medical care because of high out-of-pocket expenses, high deductibles, or high co-insurance, according to a survey by The American College of Emergency Physicians.

Also 73% are seeing more Medicaid patients who delayed medical care because their health plan didn’t have enough primary care physicians (narrow networks). Sixty-seven percent of emergency physicians say that primary care physicians are sending patients to emergency departments to get medical tests or procedures because their health plan refused to cover an office visit.

Sixty-percent of emergency physicians say that they’ve had a hard time referring their patients to specialists because of narrow network plans. More than 80% have treated patients who had difficulty finding specialists because their health plans have narrow networks. Sixty-five percent are seeing more patients in the emergency department due, in large part, to the fact that health insurance companies don’t have enough primary care physicians. Seventy-three percent are seeing more Medicaid patients because insurance companies don’t have enough primary care or specialty physicians.

Jay Kaplan, MD, FACEP, president of ACEP said, “Health insurance companies are shrinking the number of doctors available in their networks, making it more likely that patients will be forced into out-of-network situations…Balance billing would not even exist if health plans paid what is known as ‘usual and customary’ payment in the insurance industry — what is also known as ‘fair payment.’  Emergency patients are especially vulnerable because health plans know that emergency departments never turn anyone away. Health insurers have been taking gross advantage of patients and medical providers since the Affordable Care Act (ACA) took effect, arbitrarily slashing reimbursements to physicians by as much as 70%. Patients and physicians should band together to fight these dangerous insurance industry practices.” Dr. Kaplan also questioned why four of the largest insurance companies had the resources to merge, given the ACA requires insurers to spend at least 80% of premium revenue on medical care.

AMA Addresses Problems with Narrow Networks

As open enrollment for the health insurance exchanges gets underway, the American Medical Association (AMA) has adopted a new policy to address inadequate networks. The AMA wants insurers to make provider terminations without cause before the enrollment period begins. The AMA says that inaccurate or late revised provider directories are leaving patients stuck with plans that dropped their physicians after they enrolled. The AMA says that new physicians should be able to be added to a network at any time. Also, health plans need to give patients an accurate, complete directory of participating physicians through multiple media outlets, which includes identifying providers who are not accepting new patients. AMA president Robert Wah, MD said, “Patients who need to seek care out-of-network should not be punished financially. If patients find themselves in networks that are deemed inadequate, there should be adequate financial protection in place to ensure they can access the care they need and deserve…As enrollment opens for health insurance exchanges, patients deserve to have an honest look at their coverage options including the physicians, hospitals and medications they will have access to as well as cost-sharing so that they can make an informed choice.”

The AMA says the following:

  • If the patient’s plan is deemed inadequate, insurers should treat visits to out-of-network physicians the same as visits to in-network physicians.
  • There should be a way for patients to file formal complaints with regulators about network adequacy.
  • The AMA supports regulation and legislation that would require out-of-network expenses to count toward annual deductibles and out-of-pocket maximums when a patient is enrolled in a plan with out-of-network benefits or is forced to go out-of-network based to get care.
  • State regulators should enforce network adequacy requirements so that patients have access to adequate provider networks throughout the plan year.
  • Insurers should submit public reports, at least quarterly, to state regulators on several measures of network adequacy, including the number and type of physicians who joined or left the network,  essential health benefits that are provided, and consumer complaints.

For more information, visit www.ama-assn.org/go/aca.

Exchange Customers Favor Narrow Networks

Fifty-four percent of those who are most likely to purchase an exchange plan (the uninsured and individuals) prefer less costly plans with narrow networks. Those who said they wanted a more expensive plan with a broader network were told that they could save up to 25% on health care costs with a narrow network plan. The share continuing to prefer the more expensive option dropped from 51% to 37% among the public, and from 35% to 22% among the uninsured and individuals. For more information, visitwww.kff.org.

Exchanges Bring Narrow Networks and High Cost-Sharing for Cancer Patients

healthspendingMany exchange health plans have limited access to National Cancer Institute (NCI) designated cancer centers or transplant centers. They also impose high out-of-pocket costs for patients with silver and bronze level plans, according to a report commissioned by The Leukemia & Lymphoma Society (LLS).

The report, prepared by Milliman, provides an early look at the 2014 individual benefit designs, coverage benefits, and premiums for policies sold on four state health insurance exchanges in California, New York, Florida, and Texas.
The report reveals the following areas of concern:
• Narrow networks: Many specialty providers and hospitals that cancer patients rely upon are largely left out of the new health insurance exchange plans. Cancer patients could rack up thousands of dollars of medical expenses without reaching their out-of-pocket maximum since it is unlikely that any out-of-network expenses will count toward a patient’s out-of-pocket maximum. This it more important than ever to have adequate networks covering specialty care.
• High cost sharing: The lower tier bronze and silver plans require significant cost-sharing from patients. Qualified health plans come with high deductibles — sometimes nearly as high as the out-of-pocket ceiling.  The maximum out-of-pocket limits set for 2014 are $6,350 for an individual policy and $12,799 for a family policy. Some insurers offer plans with lower out-of-pocket limits in some states. However, the out-of-pocket limit does not apply to non-covered drugs or treatment centers.
 Challenges with transparency: Given the difficulty in navigating the health insurance system and the number of choices for consumers, providing thorough and accurate information is critical to ensuring consumers have the right kind of health insurance.

For more information, visit www.LLS.org

Last Updated 08/10/2022

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