HEALTHCARE
ACA Enrollment Trends
The ACA has had a substantial effect on health insurance enrollment, product mix, and company focus over the past 18 months, according to a report by Mark Farrah Associates (MFA). MFA focused on the fourth quarter of 2013 to the second quarter of 2015. The survey reveals the following:
- Blue plans gained over 2.3 million commercial members from the fourth quarter of 2013 to the second quarter of 2015.
- Commercial enrollment for non-Blue plans dropped .3%. Medicare membership increased for Blue plans and non-Blue plans.
- Non-Blue plans increased their Medicare membership by 35.9% from December 2013 to June 2015 while the Blues saw a 13.3% decline.
- Medicaid membership experienced the largest gains. As of June 2015, CMS reported 71.9 million Medicaid members, an increase of 13.1 million, since October 2013. For June 30, 2015, health insurance companies that file NAIC statutory statements reported Medicaid membership of 43.8 million, up 13.8 million, since December 2013. It is important to note Medicaid plans that are not regulated by state insurance departments generally account for differences between NAIC and CMS reporting.
- The top five leaders with Medicaid business include Anthem, UnitedHealth, Centene, Molina, and WellCare. Collectively, they added approximately 5.8 million members to their books, accounting for a 44% share of the growth in Medicaid enrollment over the 18-month period. Anthem had the greatest change in product mix with a shift toward Medicaid. As of June 2015, its Medicaid mix was 15.4%, up from 11.8% at the end of 2013.
For more information, visit markfarrah.com.
Consumers Spend Little Time Choosing Health Plans
With open enrollment for 2016 underway, 59% of consumers say they will spend less than 30 minutes selecting a plan, according to an October HealthMine survey. “Consumers are treating an increasingly complex and costly purchase with inertia. With rising out-of-pocket costs, narrowing networks, and growing prevalence of chronic disease, not doing your due diligence on healthcare coverage could be hazardous to your health—and to your pocketbook,” said Bryce Williams, CEO and president of HealthMine.
The most important factors in selecting a health plan are monthly premiums and out-of-pocket costs. However, 76% of consumers don’t know what they spent in total out-of-pocket on drugs in the past year. And 67% don’t know what they spent out-of-pocket for doctor visits and labs. In addition, 42% don’t understand their total spend on monthly premiums.
Even though 85% of respondents say they have a good idea of needed services in the coming year, 36% find their plan somewhat or very confusing. Of those, 58% are most perplexed about which services are covered by their plan. Another 46% are confused about costs. Twenty-eight percent don’t know how to get the most from their wellness program. Sixty-six percent of consumers don’t plan to make any changes to their health plan in this enrollment period. Forty percent say that there has been no recent change to their plan’s quality and value. Another 35% say their plan is getting better.
Americans Embrace Health and Fitness Technology
Sixty-three percent of consumers who use fitness or health monitoring technologies say it has changed their behavior significantly. Forty percent have shared their fitness or monitoring information with their doctor, according to a survey by the Deloitte Center for Health Solutions.
Twenty-two percent used technology to access, store, and transmit health records in the past year, up from 13% in 2013. Use was higher for those with major chronic conditions (32% compared to 19% in 2013). Sixteen percent who needed care went online for cost information, up from 11% in 2013. Technology use among Millennials increased the most (27% versus 17%). Further, 71% of all those surveyed have not gone online for cost information, but are very or somewhat likely to use a pricing tool in the future.
Twenty-five percent used a scorecard to compare the performance of doctors, hospitals, and health plans, up from 19% in 2013. The rate was highest in the youngest cohort, with 49% of Millennials who received care in the last year using a scorecard compared to 31% in 2013.
Greg Scott of Deloitte Consulting said, “Health care is becoming more digitized and consumer oriented. It’s not an overnight change, but more like how summer turns into fall – gradual yet very perceptible. The specter of a more customer-driven industry is causing many health companies to transform into retail-focused organizations, impacting everything from strategy and scale to operations and human capital…This is about more than a cool app; this is about making the…changes needed to better identify and engage a more empowered purchaser.” For more information, visit deloitte.com/us.
ACA Taxes Drive up Medicaid Plan Costs
For Medicaid plans in 2014, there was a 6.3% per-member increase in core operational administrative expenses under the control of management. That’s the second highest increase in the past five years, according to the Sherlock Company. (Core expenses exclude sales and marketing). Miscellaneous business taxes increased 617.7% to $6.09 per member/per month because of taxes and fees associated with the Affordable Care Act. That brings total administrative costs per member to 15.1%.
Account and membership administration costs increased 3.8%, which is higher than three of the prior five years. (These comparisons eliminate the effects of product mix and universe changes). The median core cost was $27.99 per member/per month before miscellaneous business taxes.
Per member, sales and marketing costs dropped 4.2%. Costs increased 5.6% for medical and provider management and 5.5% for corporate services. While costs for information systems declined, costs for enrollment and customer services increased at a double-digit rate. For more information, visit sherlockco.com.
IN CALIFORNIA
The Top Rated Medicare Part D Plans
Several California Medicare Part D plans were recognized for exceptional value by HealthMetrix Research and MedicareNewsWatch.com. The following are 2016 Senior Choice Gold Award Recipients:
| Bakersfield | Brand New Day |
| Fresno | Care1st |
| Los Angeles (Los Angeles & Orange)(Riverside & San Bernardino)(Ventura) | Humana (4 Star) Alignment Health Central Health Plan |
| Modesto | Alignment Health |
| Oakland | Easy Choice |
| San Diego | Care1st |
| San Francisco | Care1st |
| San Jose | Alignment Health |
| Stockton | Alignment Health |
Kaiser Medicare Plans Get Highest Rating
Kaiser Permanente’s Medicare health plans in California earned five stars from the Centers for Medicare & Medicaid Services. It’s the highest overall rating for quality and service. Also, the California Office of the Patient Advocate announced four-star ratings for that Kaiser Permanente’s health plans in Northern California and Southern California, again the highest possible. They were the only health plans in the state so ranked for overall quality of care. This is the third year in a row that Kaiser Permanente’s health plans have been rated four stars by Covered California. For more information, go to: kp.org/share.
Scan Plans Get High Ratings
SCAN Health Plans in California have received a 4.5-star rating by the Centers for Medicare & Medicaid Services (CMS). SCAN now has 4.5-star-rated plans in all 12 California counties it serves. CMS ranks health plans on a one- to five-star basis, weighing such factors as clinical outcomes, access to preventive services such as screenings and vaccines, management of chronic conditions, preventive care, and consumer satisfaction. Star ratings are calculated each year and may change from one year to the next.
The 4.5-star rating encompasses the majority of SCAN’s membership in both Northern and Southern California and includes all of SCAN’s Classic (HMO) plans as well as several special needs plans. In 2016 SCAN’s Classic plan will once again be available to Medicare-eligible beneficiaries in the following California counties: Los Angeles, Marin, Napa, Orange, Riverside, San Bernardino, San Diego, San Francisco, San Joaquin, Santa Clara, Sonoma and Ventura. Medicare beneficiaries living in these counties can join SCAN during the annual enrollment period, which runs October 15 to December 7, 2015.
SCAN recently announced that its 2016 benefit plans will feature all of the basic benefits traditionally covered under Medicare as well as a prescription drug benefit (Medicare Part D) with no deductibles and low copays for most services and plan selections.
Regulators Call Aetna Rate Hike Unreasonable
For the sixth time this year, California insurance regulators said that an Aetna rate hike is unreasonable. California Department of Insurance actuaries found Aetna Life Insurance Company’s most recent small group health insurance rate increase unreasonable. Aetna is increasing rates for small businesses and their employees by an annual average of 27.4%, affecting over 40,000 employees and costing small businesses a projected $5.5 million in excessive rates. Carmen Balber, executive director of Consumer Watchdog said, “The other troubling trend in health insurance pricing has been to mask cost increases for consumers by keeping premium increases slightly lower by restricting benefits, including narrower networks, costlier medications, and higher deductibles.”
LIFE INSURANCE AND LIFE SETTLEMENTS
Life Settlement Market: Continued Investor Interest, Smaller Face Amounts
The life settlement market continues to draw investor interest, but is challenged by the shifting demand for smaller face amounts, according to a study by Conning. Scott Hawkins, vice president, Insurance Research at Conning said, “We have seen continued investor interest in life settlements as they seek above average returns in this low interest rate environment. Investors purchased $1.7 billion worth of U.S. life insurance face value in 2014, bringing our estimate of the total face value of life settlements at year end to just over $32 billion. We project continued steady growth in the amount of face value available for life settlements, but the industry has a long way to go to re-attract capital to pre-2009 levels to meet that supply.”
Steve Webersen, head of Insurance Research at Conning said, “One challenge in attracting higher capital is the availability of other alternative investments. Investors [who are] interested in insurance-based assets are expanding their horizons beyond traditional life settlements to non-U.S. secondary markets for insurance, as well as secondary annuity and structured settlement markets. To attract capital to the traditional life settlement market, providers will need to restructure their operations to more effectively address small-face business and more closely align their compensation models with investor interests.” For more information, visit conningresearch.com.
Five Steps For Tracking Down A Lost Life Insurance Policy
The Insurance Information Institute offers the following steps to uncover unclaimed life insurance benefits:
- Look for insurance-related documents: Search through files, bank safe deposit boxes, and other storage places for insurance-related documents. Also, check address books where insurance agents or companies may be listed. The insurance professional who sold the deceased their auto or home insurance may be able to confirm the existence of a life insurance policy.
- Contact the most recent employer: If the deceased was working at the time of death, they might have been covered by an employer-sponsored life insurance policy. If not, the deceased may have converted their employer-sponsored life insurance into a permanent individual life insurance policy when the job ended.
- Review bank books and canceled checks: Look for any checks paid to a life insurance company.
- Check with the state’s unclaimed property office: If a life insurance company knows one of its life insurance policyholders has died but cannot find the beneficiary, the company must turn the death benefit over as unclaimed property to the state in which the policy was bought. If you know where the individual life insurance policy was purchased, you can contact that state’s government to see if it has any unclaimed money from life insurance policies belonging to the deceased. The National Association of Unclaimed Property Administration is a good place to start.
- Try the MIB database: The not-for-profit MIB Group, Inc., a consortium of life and health insurers, maintains a database of individual life insurance applications underwritten since 1996 by MIB member companies.
There is a fee of $75 per search. For more information, visit iii.org.
NEW PRODUCTS
Life Insurance Telemarketing Law Guide
The Life Insurance Direct Marketing Association (LIDMA) is offering the LIDMA Telemarketing Compliance Guide. For more information, visit lidma.org.
Managed Accounts For 401(k)s
MassMutual has teamed up with Envestnet Retirement Solutions to introduce managed accounts. They will provide personalized, professionally managed investment strategies to help participants in 401(k) s and similar retirement savings plans reach their retirement goals. For more information, visit massmutual.com.
Fixed Index Annuities
Voya Financial is offering a new index crediting strategy within its Voya Secure Index series and Retirement Index Select fixed index annuity product lines. A dynamic investment option aims to reduce volatility by allocating between select U.S. stocks and cash. For more information, visit voya.com.
Benefit Administration
Paychex introduced Paychex Flex Time and Paychex Flex Benefits Administration. These are the two newest modules for its cloud-based human capital management platform, Paychex Flex. The platform delivers access to payroll, HR, and benefit information for a streamlined approach to workforce management. For more information, visit paychex.com.
EMPLOYEE BENEFITS
Survey Finds Gaps in Latinos’ Understanding of Employee Benefits
Only half of Latino employees say they know how much they spend monthly on their benefits, how much life insurance coverage their family needs, whether they are on track to retire comfortably, and how much they should be spending on their benefits. according to a Mass Mutual study.
Many Latinos surveyed said that learning more about their finances is too complicated, confusing, and time-intensive. Seventy-six percent of Latino employees don’t use an online financial tool to manage their retirement, healthcare and other forms of insurance. However, 81% say that would be likely to use such a tool if it were free. This study finds that many Latino employees cite difficulty, time, and a lack of information about where to go and whom to trust as the reasons for not knowing more.
To help provide more educational resources, MassMutual launched MapMyBenefits (available in English only), a free, online tool that enables employees to prioritize their benefits choices and make the most of each benefit dollar based on life stages, financial goals and personal finances. The holistic approach to financial planning at the workplace combines retirement readiness, healthcare coverage and preparation for life’s unforeseen events. Additional in-language resources are available at massmutual.com/Latino.
