Health Insurance News

On May 11, 2012, the Department of Health and Human Services (HHS) issued final rules on the Medical Loss Ratio (MLR) rebate notices for policyholders and subscribers who are not receiving rebates. Insurance companies and HMOs will not be required to communicate their specific MLR percent to those who are not receiving rebates.

Instead, they must issue a new notice that says they have met or exceeded the minimum MLR standard. Policyholders and individuals who receive these notices will be directed to www.HealthCare.gov for information about their insurer’s actual MLR. The notice to those not receiving rebates is required only for the 2011 rebates that will be issued in 2012.

The purpose of sending it this year is to help educate consumers about MLR and direct them to the www.HealthCare.gov website for MLR information. The notice must be provided with the first plan document (for example, open enrollment material) that is provided to enrollees on or after July 1, 2012. It may also be provided electronically.

This notice is not required for expatriate or mini-med policies where no rebate is due. In addition, for groups of policies with fewer than 1,000 participants where there is not enough credible data to determine if the MLR standard has been met, this notice is not required.

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Deductible Credit is a feature offered on UnitedHealthOne^SM renewable plans that can help you save money.¹

Here’s how it works: If you do not meet your in-network calendar-year deductible, you can receive a credit of 20% on the following year’s deductible. If this happens two years in a row, you can receive a 40% credit. And if you don’t meet the in-network calendar-year deductible three years in a row, your deductible responsibility can be cut in half – 50%!² You can save money with your United policy year-after-year.

Applications with effective date July 1, 2012 or earlier may be eligible for 2013 Deductible Credit! UnitedHealthOne^SMDeductible Credit can give you an edge over your competition

The Deductible Credit Calculator: See It & Believe It!

The Deductible Credit Calculator shows you the potential savings with a UnitedHealthOne^SM plan featuring Deductible Credit.¹

Simply plug in your  health plan and deductible amount, and the Deductible Credit Calculator will demonstrate how UnitedHealthOne^SM Deductible Credit can cut your client’s in-network calendar year deductible responsibility up to 50%!²

See for yourself how Deductible Credit can save you  money – Check out the Deductible Credit Calculator now! .

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Imagine a doctor’s appointment without the commute, or the waiting rooms with strange smells, forced to peruse magazines you would never typically pick up just to ignore your surroundings. The living room sofa, your local drugstore, or the coffee shop are the potential faces of the new waiting room. With the capabilities of telemedicine, the virtual realm has extended itself to online doctor visits, providing the high-speed pace of service we come to expect in this age. We also can miraculously find better prices on everything we need online, so why not skip the PCP, or in-store clinic, and go straight to the first available board-certified physician? The convenience and the price sound unbeatable, but there are several factors that may not make it such a perfect operation.

Several things are compromised in this situation: the patient’s security, the health care system’s security, and the welfare of the medical field. A virtual doctor is not the same as having a personalized visit, someone peering inside your ear canal, inspecting the problem. Listening to a patient’s description and trusting their words is a cheap, easy road to manipulation of the system. How much abuse does the medical system already experience? Telemedicine could create an increase in this mistreatment for personal and ultimately illegal benefit. Also, what about people who have dedicated their lives to helping people (in person)? Sure, a $45, 10-minute visit is appealing, but in the long run, you are short changing yourself and others. Doctor’s salaries have already seen significant cuts in the past few years, and this virtual “solution” could lead to hard-earned degrees, and decades of valuable medical experience going to waste.

There is little trust that can be had over any internet transaction. Though board certifications are present, these doctors are still not examining your symptoms with their own eyes and ears. Pixels and sound waves, however HD the quality, are not medical devices. As for the patient’s information, there should hopefully be a secure application process, as sometimes efficiency can take precedence over security. People may be so eager to receive quick, affordable health care that they do not realize who is collecting their information. UnitedHealth Group is surely reputable, but there is always the possibility of information selling and interception.

In short, keep doctors in business; they might still be paying back loans for med school, and have families to insure themselves. Also, help in the effort to minimize manipulation of the health care system. Many people seem to get away with lying to doctors in person, imagine the possibilities when it’s buffered by thousands of miles and an LCD screen.

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It should come as no great surprise that United States leads all other nations in spending on health care.  It might come as a surprise that the level of care received in the United States is not better.

This information is what led the Massachusetts government to not allow is health care facilities to charge premiums for health care because of more effective care.  The reason why is because there is no such thing.  Not one of these health care providers or facilities could claim their premium level of care had any better results than the least expensive providers.

The U.S. spent $8,000 per person in 2009 for health care services.  The two nations (Norway and Switzerland) that came in second and third were at a little more than $5,000 per person.

So what is the difference between the $8k and the 5K?  Its not more services if that is what you are thinking.  In fact, the US came in near the bottom for total number of doctor consultations. Nor is it longer hospital stays.  The U.S. had shorter hospital stays than most countries.  So in other words, utilization is way lower in the U.S. and results are no better.

The latest study of health care costs was undertaken by the Commonwealth Fund who points to the high costs of medication and medical services in the U.S. that is causing these excessive differences.  Additionally, there is more use of MRIs and CT scans which are very expensive in any country.

Who else is to Blame?  As most of us know, 1/3 of our country is obese and that is a major driver of health care costs.

Back to the standard of care, there is no better results here and life spans are definitely lower in our country.  On the bright side, we have excellent cancer survival rates.  But chronic conditions are the death of us (no pun intended).  Diabetes, asthma, and other chronic conditions bring our results way down.

Countries like Japan, use strong price regulations to control medical costs.  Health care spending has increased only 2 percentage points in two decades.  However, Japan has suffered from chronic stagflation issues.

The best course of advice that our medical field could follow now is to focus on improving lifestyle choices in this country including diet, smoking, and exercise.

If you were expecting a health insurance related cause for this excessive health care cost, I can assure you it was not cited anywhere.  Thus in battling health reform, to blame health insurance companies will not solve our problems.  (Though many suspect doing away with them would help).

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A Proposed Rule Could Make Millions Ineligible For Health Insurance Subsidies
by Erik Berman

A major issue in the workplace today is the U.S. Government’s Health Care Insurance subsidy proposal to allow low to moderate income employees to opt out of their employer’s health insurance coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called “exchanges.”

A health insurance exchange is an exchange run by a private sector company or nonprofit.  They
are designed to help consumers find plans personalized to their specific health conditions, preferred doctor/hospital networks, and budget. These exchanges are sometimes called marketplaces or intermediaries, and work directly with insurance carriers, effectively acting as an extension of the carrier.

President Obama promoted the concept of a health insurance exchange as a key component of his health reform initiative. Obama said that it should be “…a market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that’s best for them, in the same way that Members of Congress and their families can.

There is a debate going on right now over who actually qualifies for subsidies and whether or not the government has the authority to force most people to buy health insurance. It’s up to the Supreme Court to resolve how tax credits will be used to subsidize coverage and how many people will qualify.

A proposed Treasury Department rule says workers and their families cannot qualify for those subsidies unless their employer’s health plan is unaffordable because it exceeds 9.5 percent of their household income. There is a legal battle going on right now between Democrats and Republicans about the U.S. Government’s proposed mandate to force people to buy health insurance and to possibly allow tax credit subsidies for low –moderate income employees. Most people agree that health insurance should be available to everyone at reasonable rates and the U.S. Government should not be able to force you to buy it, especially if you cannot afford it.

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Since the making of the Medicaid and Medicare programs in the U.S., perhaps the most far-reaching health legislation is the health care reform signed into law by President Barack Obama. Also, other changes are likely to occur once a reconciliation bill part of the health care overhaul is passed by the Senate. It is expected that by the year 2019, the entire health care overhaul will extend insurance coverage to 32 million additional citizens, affecting almost every American in the country.

Under the new health care law, a citizen would have to have insurance by 2014 if he or she does not want to get penalized. The penalty fee would start up to 1 percent of income or 2.5 percent by 2016. However, a family has a limit of 2,085 dollars. Some would get exemption from the insurance requirement due to some reasons such as religious beliefs and financial hardships. This is best shown in those who are American Indians.

You can get eligibility for Medicaid but it depends on the income you are gaining. Medicaid is a state-federal program for people with disabilities and the poor that is expands dramatically starting in 2014. Adults with low income as well as those without children can still get eligibility as long as their income does not surpass 133 percent of the federal poverty level.

You can pay for private insurance that are sold in the new insurance marketplaces expected to start operation in 2014. You might be helped by government subsidies which you are eligible for. And for those families and individuals generating income between 133 percent and 400 percent of the poverty level, premium subsidies would be available. These subsidies will be on a sliding scale as shown in the new overhaul system. Let say for example: four members of the family are earning 150 percent of the poverty level. Then they would have to pay 4 percent of its income. 9.5 percent would be paid by a family with income of 400 percent of the poverty level. In addition, there would in a limitation to your out-of-pocket health expenses if you are gaining income below 400 percent of the poverty level.

The new health care reform law would make it easier for every American to get coverage, especially if you have a medical condition. This will bar insurers from rejecting applicants based on health status once the exchanges are starting operation in 2014. In the meantime, bill would provide a temporary high-risk insurance pool to people with medical problems rejected by insurers or those with no insurance at least six months. Also coverage for specific medical conditions for children with pre-existing problems will no longer be excluded by insurers. Insurance companies will never be allowed to set limits to lifetime coverage for adults and kids.

You can use the insurance coverage of your parents if you are not yet married in the age below 26 as long as you are not offered health coverage at work.

Furthermore, tax credits are offered to companies having small workforce and averaging wage of up to 50,000 dollars to purchase insurance.

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The Implications of Health Care Reform on Employers and the Benefits They Offer to Employers

The employer-provided health benefits in the U.S. are facing a large change, if not the largest. President Barack Obama signed into law a new health care reform that restructures employer-sponsored health benefits following the passage of the Affordable Care Act in 2010.

Many of the relevant provisions of the health care overhaul will take effect in 2014. According to some studies, employers will make dramatic changes in their organization once they become aware of the new social and economic incentives in the law. It is estimated that only about 7 percent of the workers who are presently covered by employer-sponsored insurance will transfer to subsidized-exchanges policies by 2014.

Surveys show that in the years after 2014, 30 percent of the companies will definitely stop employer-sponsored insurance. And this proportion is likely to increase to more than 50 percent among employers with a high awareness of the overhaul. Economically, at least 30 percent of employers would gain benefits from aborting coverage even if they completely compensated their workers for the change through higher salaries or other benefit offerings. Contrary to the belief, more than 85 percent of workers would retain their jobs even if their companies stopped provided employer-sponsored insurance. However, increased compensation might be expected by about 60 percent.

As the world continues to change, employers are examining the impact of health care reform on their workforce and benefit strategies, as well as the risk and opportunities generated by the reform. It is also important to note that the extent of the possible changes that employers will make will vary by the industry they belong to. Collective bargaining agreements will also take part of this.

There are several new requirements imposed by the health care reform on employer health benefits. Some changes will include the elimination of annual and lifetime limits and mandatory offering of coverage to dependents through age 26. These changes could force several companies to reconsider what benefits they have to offer to their workers. The health care overhaul is requiring all companies with more than 50 workers to provide health benefits to every employee working full time. Failure to do this would penalize them up to 2,000 dollars per employee. Also, a reasonable level of health coverage must be provided by the benefits. Moreover, high compensated executives will never be allowed to receive better benefits than those hourly employees. Thus, medical expenses for many employers will increase.

Families would spend on health coverage as the amount lower- and middle-income individuals will be capped by the subsidies. The cost of insurance coverage from the exchanges below what many workers are paying toward employer-sponsored coverage will be kept by the subsidies.

Because of the dramatic implications that this health care reform has on business, many employers are expected to turn to alternatives to employer-sponsored insurance. With increasing awareness of reform, interest in these alternatives will rise. Employers dropping employer-sponsored insurance will escalate employee compensation in other ways such as benefits like retirement, vacation time and health-management programs. Nonetheless, employers in the country will remain competitive as the introduction of new health care reform continues.

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The best thing that came out of the current health reform legislation is PCIP which has been a godsend to some of our uninsurables.   What we have been doing is placing these people with a low cost discount carrier until the 6 month waiting period elapses and they can sign up with PCIP.  It is working really well for everyone.

However, it seems the medical costs (not the admin costs) for the members in these plans is costing more than double what the Obama administration estimated. Check out this report on the PCIP medical expenses.

I guarantee that right now United Health, Aetna, Humana, and Blue Cross are all laughing at this.  They knew what was going to happen.  Everyone blames the greedy insurance companies for the spiraling medical costs, but now it seems maybe its the actual members?

The PCIP law set aside $5 billion to provide insurance coverage to those that have been declined by private individual carriers or more plainly, the undesirable uninsurables.

By 2014, the PCIP plan will be phased out as all plans will become guarantee issue.  (If you recall the central tenant for this is a mandate or tax to ensure compliance, otherwise there will be a looming moral hazard disaster.)

The exact numbers include an estimate of $13,026 per member and an actual expense to be $28,994!  Or more, than double.  Whoever these actuaries are that performed this estimate should come forward and point out their other estimates so we can identify other weaknesses in the health reform legislation.

Another funny piece of data, is that the estimate was correct in the respect that similar state-run high risk pools only spent $12,471 per member.  The difference?  Well the federal government is one piece of the puzzle.  The other piece is that the state run risk pools had much higher premiums which prevented a good deal of the moral hazard.  The plan designs are also different but I am not sure that is related.  However pent up medical demand is a reasonable excuse as well.

Most of the PCIP expenses are coming from cancer, heart disease, and chronic conditions.  However these people are having eight times as many hospital admissions as normal government workers, and the worst part, three times as many ER visits.

The Obama administration has spent $600 million of its $5 billion budget for the program over the past 18 months.  Enrollees in the high-risk pools also tend to be older, with 67 percent of participants over the age of 45. Fewer than one in five enrollees are under 34.

While the administration has tried to put a positive spin on these numbers by saying things like, “oh yeah dude, that means we are serving the right people, bro,” or “hey are you gonna eat that?” in reality it is putting the whole reform bill into new light.

These figures present a challenge for federal high-risk pools over whether the program can take on many new enrollees and stick within its budget constraints. Congress appropriated only $5 billion for the program, to last through 2014. Some states have blown through their budgets faster than expected and have begun capping enrollment. Wait till PCIP goes away and private health care companies need to administer these people.

Not too mention that many people will only get health insurance when they are riding in the back of an ambulance.  In fact, part of our new marketing plan should be to buy ad space in ambulances and hospitals so as agents we can capitalize on the moral hazards.   And you thought lawyers were ambulance chasers? Wait to you see what insurance agents do!

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I woke up this morning to find that the government was getting back into the business of playing favorites by loaning money (at very low rates) to certain organizations that promise to launch consumer governed health plans in eight states currently and eventually all 50.  I guess I knew this day was coming, but in light of the health reform debate in the Supreme Court I was surprised that these companies are getting funded so soon.

And as you read this article (assuming anyone is still, actually reading this) keep in mind that these plans will be exchange friendly not agent.  At least 50% of the people that buy insurance need to be guided by an agent.  This is not a #4 at McDonald’s, this is health insurance.

Seven organizations were lucky enough to split $639 million in start up costs to launch these plans in 2014.  They will be sold on the health insurance exchanges and not necessarily by agents and between the exchanges and these plans, agents are likely to go the way of the Israeli spotted owl (blown up in a suicide attack).

Eventually one of these non profit plans will operate in all states.  What a great idea!! Non profit plans!  Actually these already exist of course.  For instance in Florida there are 2 including the tiny Blue Cross of Florida and Avmed.  Interesting point, these 2 plans are no cheaper than the for profit carriers!  In fact in Florida they are both more expensive in most demographics.

So basically the government will hand out interest free loans to public health activists, medical associations, business groups, hospital executives, labor unions and anyone else that has either friends in the administration or is particularly adept at filling out forms.

The goal of these co-ops is to supposedly increase competition among insurers which should in theory reduce premiums and/or improve health care quality and customer service.  In some states, this is a good plan like North Dakota where only one or two insurers control the bulk of the health insurance business.

But in most states these new entrants will be flayed by the existing network of agents and direct sales and because of scale they will be unable to offer lower premiums.  Not too mention hiring experienced people will be difficult as will building a large enough base of members virtually overnight.  Whats the track record on nonprofits?  Most of them have either gone out of business or were sold or converted to for profit.  And of all the consumer governed insurers only 2 million Americans are still covered by them including Group Health and HealthPartners.

So if you are looking for a new business and fill out the form properly or have a friend in Washington you could easily get a $15 million startup loan and another $100 million for reserves.  Interest is less than 1% and the payback period for the startup loan is 5 years and 15 for the reserve loans.  Once the 3.4 billion reserved for this function is used the program is over.  So hurry up and start your insurance company!!

The government is guessing 40% of these companies are likely to fail, but if it is anything resembling the public sector, only 10% will likely survive!

So in conclusion, what is the right answer?  Well the right answer is for every American to pay a tax and have a single payer plan like any normal bankrupt European nation, but this messy legislation is right up there with the tax code and will be costly and stupid.  Repeal this nonsense Supreme Court!  And then lets get a handle on medical inflation.  Once we do we can pass a serious reform or a single payer plan.

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