Health Insurers Increase Debt in Wake of the ACA

Since 2011, U.S. health insurers have nearly doubled their borrowing levels due to the Affordable Care Act (ACA), according to a report by A.M. Best. With traditional health insurance products, insurers receive full premium payment every month before paying any claims. But that’s not the case with exchange products. In the first few years of the exchanges, insurers relied heavily on risk-adjustment, reinsurance, and risk corridors. The timing of paying direct premium subsidies fluctuated significantly. So health insurers had to pay the claims because their liquidity was under pressure. They turned to borrowing to alleviate this pressure. A.M. Best has not seen any significant rating pressures due to borrowing. However, heavy reliance on borrowed funds could put pressure on ratings if it reduces financial flexibility or slows the growth of capital and surplus. However, financial institutions see the use of borrowed funds as favorable since many top borrowing insurers are very big, highly capitalized, and highly rated, according to the report. 

Wellness program sees success cutting chronic disease risk, trimming waistlines

University of Pittsburgh researchers said the work-based Group Lifestyle Balance program tested at Bayer MaterialScience helped employees reduce their risk of diabetes and heart disease. The program was based on the National Diabetes Prevention Program used mainly in community settings, and at the end of one year, workers who participated lost an average 5% of body weight and doubled their physical activity. The study was published in the Journal of Occupational and Environmental Medicine. Pittsburgh Post-Gazette (5/26

Patients Are in Denial About Diabetes Risks

Nearly 80% of patients who are at elevated risk for Type 2 Diabetes seem to be deluding themselves by assuming that they are in excellent or very good health, according to a survey from the American Diabetes Association (ADA). “These findings suggest it is critical for providers to connect the dots with patients between risk factors and disease development,” said Virginia Peragallo-Dittko, R.N., C.D.E., incoming chair of the ADA’s Prevention Committee. For more information, visit www.ada.org

Enrollment Trends a Key Risk to Health Insurers

The difference between the age distribution assumptions made when insurers set premium rates on their exchange products and the actual age distribution will be a key determinant of the products’ financial results, according to Fitch. The more these pricing assumptions skew younger than actual experience, the greater the potential is for health insurers to experience adverse financial results from exchange-sourced business. It also increases the importance of risk sharing programs built into the ACA. This is especially true for insurers offering individual and small group products on state or Health and Human Services Department (HHS) managed health insurance exchanges.
According to HHS, as off Dec. 28, 2013, 24% of exchange enrollees were 18 to 34 years old. A Kaiser Foundation Family report estimates that number at 40%. Fitch says that healthy 18-34-year-olds who are eligible for exchange enrollment are more likely to delay their enrollment compared to older, less healthy people. The 2014 enrollment period remains open until March 31, 2014.
The HHS report indicates that eight times as many 18 to 34 year olds enrolled in an exchange-sponsored health insurance plan in December than in October and November. For more information, visitwww.fitchratings.com.

The Costs of Remaining Uninsured: Navigating the Affordable Care Act

NavigatingSome consumers will pay the penalty instead of buying insurance through the exchange. But they should consider the long-term financial benefits of having health insurance, according a blog entry by Consumer Advocate Eleanor Blayney, CFP.

Facing the choice to get insurance or pay a penalty, they may resort to simple math and conclude that $95 is a lot more affordable than the $3,000 or $4,000 for the lowest level of insurance coverage available on the state exchanges. However, Blayney advises Americans to consider several factors before deciding to pay the federal penalty and forego health insurance:

• You Risk penalties for having no insurance: In 2014, uninsured Americans will have to get health insurance or pay a penalty of $95 per adult and $47.50 per child or 1% of family income, whichever is greater. In 2015, the penalty rises to $325 per adult (half as much for each child) or 2% of income, whichever is greater. The penalties rise even further in 2016 and beyond.

 You risk huge medical costs due to an accident: Being young and healthy does not vaccinate you from the kind of risk that can leave you and your family destitute.

You May have limited access to quality medical care when you do need it:  Some providers may simply decline you as a patient when they find out that you are uninsured.

• You will be more likely to neglect the routine, preventative procedures: If you are unwilling to pay for insurance, you’ll probably skip the high cost of an annual check-up or routine procedures. It will cost more for the uninsured to get health care coverage under the Affordable Care Act.

Job loss may increase heart attack risk

Adults who were unemployed were at a greater risk of developing acute myocardial infarction, according to a study in the Archives of Internal Medicine. “Although the risks for AMI were most significant in the first year after job loss, unemployment status, cumulative number of job losses and cumulative time unemployed were each independently associated with increased risk for AMI,” the researchers wrote. Nurse.com (11/19)

Study finds greater risk of stroke following hip replacement

Adults who underwent a total hip replacement had a higher risk of suffering an ischemic or hemorrhagic stroke two weeks after the procedure than those who didn’t get the surgery, a Dutch study found. Researchers noted that antiplatelet therapy following discharge was associated with lower odds of ischemic stroke in the six weeks after the procedure. The findings were published in Stroke: Journal of the American Heart Association. MedPage Today (free registration) (11/11)

Miscarriages are associated with risk of heart problems

Women who experienced one or more miscarriages had a greater likelihood of suffering a heart attack, stroke, atherosclerosis and renovascular hypertension than those who had no miscarriages, a Danish study found. The findings, based on data from more than 1 million women, were presented at the American Heart Association meeting. HealthDay News (11/6)

Higher BMI raises hospitalization risk in study

Data on nearly 250,000 Australian participants showed that every additional BMI point was tied to up to a 4% higher risk of being hospitalized for a variety of conditions within a two-year period. The study was published in the International Journal of Obesity. Reuters (10/21)

Abdominal fat, insulin resistance raise diabetes risk in obese

Data on more than 700 obese participants showed those who had excess belly fat and insulin resistance faced a greater risk of type 2 diabetes than those without the conditions. The findings in the Journal of the American Medical Association suggest that evaluating fat distribution and insulin resistance may help identify patients with a higher risk of diabetes, researchers said. HealthDay News (9/18)

Last Updated 12/06/2017

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