Healthcare in America 16-Apr-2019
Can “Limited Funding” reduce your health insurance costs? 3-Apr-2019
Federal Court Unravels Association Health Plans
We appear to have a Medicare "doc-fix" to delay deep cuts in Medicare payments to docs. Good news, right? This deal, rather bipartisan deal, includes changes in the tax subsidy program that will help fund premiums for some consumers buying insurance through the new insurance exchanges in 2014. It's a $19.2 billion proposal that will be on the Senate floor Wednesday. Supposedly it would be paid for by changing the rules on how the government will recoup overpayments in the subsidy program for people with incomes between 100 and 400 percent of the federal poverty level. Specifically, the program is slated to recoup up to $200 for an individual and $400 for a couple, but the agreement would raise the limits, as well as look for money elsewhere... sound complicate and iffy? It does to me, but I'm all for seeking stability as we sort out the details of the new healthcare reform law!
Department of Health and Human Services is expected to clarify the MLR rules today that govern exactly how much of each dollar is required to be used by insurance companies to pay for direct medical expenses versus administrative costs and profits. Meanwhile newly elected Republicans seem to be galvanized in an effort to repeal the new healthcare law. Not all Republicans support this movement. Some of the biggest players in the system are not willing to support the effort to scrap the law and start over. With 32 million more people in the system, I would certainly expect more than a little pushback from a significant number of hospitals, doctor groups and pharmaceutical manufactures. Also, keep in mind that health insurance companies endured major criticism in the national spotlight and managed to land on their feet with the prospect of insuring these new members with more government regulations. They have invested a lot of resources to design benefits and systems to accommodate the new market place. Would you want to see a total repeal if you were in any of their shoes?
Tennessee is in the process of deciding whether or not to establish its own Health Insurance Exchange. The State Insurance Exchange Planning Initiative has announced the members of the Technical Advisory Groups (TAGs) that will be working to help the state carefully consider all the issues before proceeding. The two TAGs are Actuarial/Underwriting and Agent/Broker. I had the opportunity last week to participate in a discussion by Director Brian Haile and I have to say he really gets it. This is a critical issue for the state and so far I am pleased to see how much feedback they are looking for in the planning phase. Without technical support from the industry and feedback from the broker community I believe even a decent strategy would be doomed. For more info check out: http://www.tn.gov/nationalhealthreform/exchange.html
So another one bites the dust! Carrier consolidation has been a way of life for the past several years and it appears that more is on the way. Principal Financial Group Inc. has stopped selling health insurance. When customers come up for renewal, they will have the opportunity to renew with UnitedHealthcare. The transition is expected to take up to three years. The funny thing is that we didn't get notified by Principal... I got the memo from UHC! It's not the worst news we've gotten, but it's certainly a sad day when a viable carrier exists our market... one less choice for our clients. We were surprised because they had committed to resources to be a player in our market again after losing ground for a number of years. I have to believe healthcare reform played into the decision since they were really gaining momentum prior to the news.
Principal's asset management and 401(k) businesses has grown. However, its health insurance segment has contracted and required more investment. We suspect healthcare reform will drive smaller players out of the game as the bigger players vie for market share. Principal announced they expect to cut 1500 jobs as a result of the exit from the health market.
I'm very pleased to be launching our new blog to facilitate the exchange of info, ideas and opinions focused on a new era in health care and health insurance with dramatic change being fueled by Patient Protection and Affordable Care Act Health Care Reform, PPACA. Thank you for visiting and your comments are always welcomed and encouraged!
We can now see the tip of the iceberg as the initial changes begin to take effect. We spend a good bit of time reminding people that the big changes come in 2014. For the most part officials in the current administration are downplaying the cost and projections of cost associated with reform. I have to say I agree with statements made by industry leaders that when you add benefits into health plans, the cost of coverage goes up. Near-term provisions to accommodate immediate regulations are being estimated to cost an additional 1.5%. All the initiatives appear to be well intended, but it appears to us that we're going to pay more, one way or another, to increase access to care and enhance benefits. Please don't misunderstand me, I want more benefits, more quality and I want to pay less for it too! However, I feel we are expanding the health care system without addressing systemic cost issues. In other words, we are doing too much too quickly and I believe we will pay dearly for it.
We have been working diligently for years to help employers and their employees manage the rising cost of health insurance. We were very much in favor of improving the health care and insurance systems to benefit our country's ability to have access to affordable health care. Unfortunately, the affordability initiatives appear to be missing from the overall health care reform effort. Our nation is now divided on the new rules and regulations that were supposed to be designed to help us have access to affordable care. My clients want to know why cost containment is not part of the results we see so far. What we do have for all plans with plan years effective on or after September 23, 2010, at an additional cost above medical inflation is the following benefit and eligibility enhancements, estimated to be about 1.5%:
- No lifetime dollar limits
- No annual dollar limits, except as permitted by HHS
- No pre-existing condition exclusions for anyone under age 19
- Dependents can be covered to age 26, regardless of marital status, tax dependent status, student status and whether or not they reside with or get financial support from parents
Grandfathered plans are not required to comply with the following and therefore can choose to avoid increased benefits cost as long as grandfathered status is maintained:
- First dollar coverage of preventive care benefits
- Provide coverage to adult dependents age 18-26 who have access to their own employer sponsored coverage
- Prohibitions of discrimination in favor of highly compensated individuals in group plans (IRC Section 105 (h)), this was previously applied only to self-funded plans
Welcome to the complexities of health care reform!