How Major Players Are Driving Regional Networks
Following implementation of the Affordable Care Act, large players are consolidating the control of hospitals and physician organizations in the San Francisco Bay area, according to a recent report by the California HealthCare Foundation (CHCF).
In a region with many segmented submarkets, major providers are expanding to manage care efficiently, serve more patients, and compete with Kaiser Permanente. The number of independent hospitals is shrinking as financial problems mount. Independent practice associations are seeking to diversify, raise capital, and keep private practice viable, especially for primary care physicians. Though none of the region’s remaining private safety-net hospitals appear threatened by imminent closure, several face an uncertain future. The safety net is strong, but faces capacity and access challenges resulting from Medi-Cal expansion. Safety net providers are particularly hampered by their limited ability to recruit and retain clinicians. For more information, visit www.chcf.org/almanac.
Health Net Merger Hearing
Insurance Commissioner Dave Jones is holding a public hearing to examine the implications of Centene Corporation’s proposed acquisition of Health Net Life Insurance Company and Health Net of California. The general public is encouraged to attend and provide testimony. The hearing will be held January 22 at 11:00 a.m. at the State Capitol Building Room 4202, 10th and L St., Sacramento, CA 95814.
DMHC’s Year in Review
Shelley Rouillard, director of the California Department of Managed Health Care (DMHC) provides a year in review. The following is a summary of her comments:
Merger Mania: This past year, we saw a wave of potential mergers and consolidations in the health care marketplace. In October, the DMHC approved Blue Shield’s acquisition of Care1st Health Plan. The DMHC’s approval included a series of commitments by Blue Shield to improve access and health care quality. Blue Shield also agreed to make investments to strengthen California’s health care delivery system. This includes $50 million toward a provider directory database project and an encounter data project, and $10 million for consumer assistance programs. Given the public interest in these mergers, the DMHC is committed to holding a public meeting on each significant merger even if it is not required. The Department held a public meeting on the acquisition of Health Net of California by Centene on December 7 and on the acquisition of Humana by Aetna on January 4. A public meeting will also be scheduled on the acquisition of Cigna by Anthem. For more information on these public meetings sign up for the DMHC list serve at www.HealthHelp.ca.gov.
Alameda Alliance for Health Conservatorship: The DMHC ended its conservatorship of the Alameda Alliance for Health after Alameda met milestones outlined in a corrective action plan including launching a claims-processing system, meeting financial solvency requirements, and clearing a backlog of claims . The DMHC will continue to monitor the plan closely.
Premium Rate Review: Since January 2011, the DMHC has saved Californians more than $100 million in health care premiums through its premium rate review program. Under state law, proposed rate increases for individual or small group health plans must be filed with the DMHC. Department actuaries review all proposed rate increases. The DMHC does not have the authority to approve or deny rate increases. However, the department’s review often results in a reduction in the proposed rate increase. The DMHC found two premium rate increases unreasonable in 2015. The unreasonable findings were for increases in Aetna’s small group products.
Federal Mental Health Parity Compliance: In 2015, the DMHC completed the first of a two-phase approach to ensure compliance with the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA). In phase one, health plans were required to submit compliance documents to the DMHC. The DMHC worked with plans to correct deficiencies. During phase one, the DMHC looked at three key parity indicators for compliance:
1. Cost-sharing charged for mental health and substance use disorder services.
2. Quantitative treatment limits, such as limits on the number of days or visits inpatient or outpatient services,
3. Non-quantitative treatment limits, such as authorization rules, drug formulary design, and provider qualifications.
The second phase involves on-site plan surveys, which are scheduled to begin in the spring.
Provider Directory Enforcement Actions: In November, the DMHC fined Blue Shield $350,000 and Anthem Blue Cross $250,000 for deficiencies provider directories. Blue Shield has already reimbursed more than $38 million to enrollees who incurred out-of-network costs. Blue Shield and Anthem will report to the Department the final number of enrollees reimbursed and the total amount reimbursed. The DMHC has initiated follow-up surveys to assess the plans’ efforts to correct the deficiencies.
Help Center: The DMHC has helped more than 1.6 million Californians resolve health plan problems through the Help Center. The Help Center assisted more than 125,000 consumers in 2015, an increase of about 20% from 2014. Help Center patient rights advocates, health care professionals, and consumer service representatives help consumers in 148 different languages.
Hundreds of Thousands of Californians Face Increased Tax Penalty
Covered California is reminding consumers that time is running out to avoid the tax penalty for those who do not have health insurance in 2016. A recent report from the Henry J. Kaiser Family Foundation (http://kff.org/health-reform/issue-brief/the-cost-of-the-individual-mandate-penalty-for-the-remaining-uninsured) estimates that the average household penalty in 2016 will be $969, which is a 47% increase from 2015. The report also estimates that those subject to the penalty include 75% of people who are eligible for premium subsidies. The fine is calculated two different ways; uninsured consumers will pay whichever amount is higher. The first calculation is 2.5% of household income, with a maximum of the total yearly premium for the national average Bronze health insurance plan premium. The second calculation is $695 per adult plus $347.50 per child under the age of 18, with a maximum of $2,085.
The following table shows the potential range of penalties for not having insurance in 2016.
| Estimated Annual Penalties for Not Having Health Insurance in 2016 | ||
| Household Size | Minimum | Maximum* |
| 1 (single filer) | $695 ($58 per month) | $2,484 ($207 per month) |
| 2 (single filer with one dependent under 18) | $1,043 ($87 per month) | $4,968 ($414 per month) |
| 3 (married filing jointly with one dependent under 18) |
$1,738 ($145 per month) | $7,452 ($621 per month) |
| 4 (married filing jointly with two dependents under 18) | $2,085 ($174 per month) | $9,936 ($764 per month) |
Nearly nine out of 10 Covered California enrollees get some financial assistance. Covered California says that 670,000 enrollees paid $100 a month or less for their coverage in 2015 and 350,000 enrollees paid $50 or less per month. Open enrollment runs through Jan. 31. Anyone signing up between Jan. 16 and Jan. 31 will have their health care coverage start on March 1. Consumers can sign up for coverage in a variety of ways, including enrolling online at www.CoveredCA.com, calling 800-300-1506 to enroll over the phone or finding in-person help in their communities.
Top Challenges for People with Medicare
The Medicare Rights Center released its annual report based on thousands of calls to its national helpline. Two trends stood out among the questions from helpline callers:
- Navigating Medicare Part B Enrollment: Many people are confused by Medicare enrollment rules, and specifically whether to take or decline Part B, which covers doctors’ and other services. Some have other coverage through an employer or the new state or federal Marketplace and want to know how insurance may change because they are eligible for Medicare. While callers may be aware of the risk of late enrollment penalties, they may not realize that their former insurance may refuse to pay for care once they are Medicare-eligible.
- Navigating Part D Prescription Drug Appeals: In addition to not knowing why their prescription drug was denied, callers are confused by the Part D appeals process. They are often unsure about whether their appeal has been filed, what level of appeal they are in, and what their doctors have done on their behalf.
Drawing from Medicare Rights’ 25 years of experience serving people with Medicare and their families, the report includes a comprehensive set of policy recommendations on how to improve access to affordable health coverage. Among the recommendations are to provide better education to newly eligible beneficiaries about Part B enrollment and prescription-drug appeals and streamline enrollment periods for employers.
Most Prospective Employees Consider Healthcare Benefits
Eighty-six percent of Americans say that competitive benefits would factor into their job choice, according to a survey by the Harris Poll on behalf of Collective Health. The study also reveals the following:
- They are are not prepared for an out-of-pocket medical bill of $5,000 or more: 80% of Millennial women (ages 18-34), 71% of 18- to 34-year-olds, 69% of parents with a child under 18 in their home, and 61% of Americans in general.
- 81% percent of parents with a child under 18 say healthcare benefits would be big factor in where they decide to work.
- 72% of 18- to 34-year-olds are often confused about their benefit options.
66% of Americans prefer a plan that takes more out of their monthly paycheck, but covers more of their medical bills. - 61% of Americans are often confused by their healthcare options (e.g. PPO vs. HMO, provider, FSA/HSA).
- 59% of Americans have been confused by a bill from a healthcare professional.
For more information, visit http://www.collectivehealth.com.
Nurses Applaud New Sanders Plan for Healthcare for All
National Nurses United (NNU) welcomes Sen. Bernie Sanders’ plan for achieving universal healthcare. Sanders’ plan aligns with the official position of the AFL-CIO, which has endorsed single payer health care with Medicare for all. NNU executive director RoseAnn DeMoro said, “With Sanders’ Medicare for all plan we can finally have a system based on patient need, with a single standard of quality care for all, regardless of ability to pay, race, gender, age, or where you live.” She added, “His plan includes a pledge to provide comprehensive coverage, inpatient and outpatient [care], emergency care, dental care, vision [care], long-term care, prescription drugs, medical supplies, and other basic needs. [The plan includes] one medical card, no networks that limit patient choice of doctor or other provider, and no fighting with insurance companies over needed care they refuse to pay for. Contrary to those in the Clinton camp who have claimed that Sen. Sanders wants to turn our healthcare over to state governors, many of whom have refused to expand Medicaid under the ACA, the Sanders plan would be federally administrated, with national standards and national reimbursements.” Sanders said that the typical family earning $50,000 a year would save nearly $6,000 annually in health care costs.
More Employers Are Outsourcing Benefit Administration
One in three employers outsources all of their benefit administration, up 20% since 2013, according to a study by the Guardian. Employers are also using more vendors for support. Nearly two-thirds that outsource some benefit administration use multiple vendors, up from 48% in 2013. Employers of all sizes are realizing the need to improve efficiency; keep compliant with requirements of the ACA, FMLA, and ADA; and improve the enrollment experience. They will need to rely more on external expertise to meet their goals, according to the study.
Only half of employers say their company is very effective in tracking and managing employee leave, including FMLA, disability, and other paid-time off. Nearly two-thirds of employers outsource some aspects of the enrollment process, such as preparing enrollment materials (49%) and presenting at enrollment meetings (48%). Only 31% outsource the development of their enrollment strategy. Having a decentralized approach lessens the effectiveness of enrollment activities. It’s best to outsource enrollment strategies to integrate services that support employee decision-making, according to the study. Ray Marra, senior vice president, Group Products at Guardian said that outside expertise can help companies transform their benefit package with a broader range of employee benefits and related services. For more information, visit https://www.guardiananytime.com/2015-workplace-benefits-study.
How Voluntary Carriers Measure Lapse Rates
An Eastbridge study finds that all but one of the 22 carriers surveyed can measure and track lapse rates for their voluntary business, at the account level, the employee level, or both. However, the methods vary greatly, making an exact comparison difficult. Carriers that track at the account level reported average lapse rates ranging from two percent to 35% for their voluntary line. For most, these percentages have stayed about the same or increased over the past two years. Carriers that track the percentage at the employee level reported an average lapse rate of 12% to 32%. Again, most said the rate has remained level or increased over the past one to two years.
The majority of carriers are most concerned with the potential for increasing lapse rates in the near future, citing several reasons for the upsurge—rising numbers of takeovers, changes in distribution and the use of enrollment technology/methods. They also mentioned the movement of all business due to rate increases and changes associated with health and/or employer-paid products, basic customer service and billing issues, and lack of employee understanding about the value of voluntary products as reasons.
To help improve lapse rates and reduce some or all of these increase, the carriers mentioned adding more lapse-tracking capabilities (at the employee and account levels), improving reporting, and adding account management and other customer service staffing. Another action includes identifying reasons for increased lapse rates. For more information, visit www.eastbridge.com.
Coding Error Finder
AmeriVeri’s flagship software-as-a-service solution finds medical coding errors that would otherwise go undetected, providing a last line of defense against improper payments and inaccurate medical records. For more information,visit www.ameriveri.com.
Quoting Platform
Limelight Health released QuotePad 2.0. It allows health insurance and benefit professionals to quote and compare health benefits from multiple carriers instantly from any desktop or mobile device. QuotePad won first prize at Silicon Valley Innovation Center’s Insurance Disrupted conference. For more information, visit www.limelighthealth.com.
Simplified Issue Life Insurance Coverage
National Western Life introduced a simplified issue life platform, called the “NWL OptionLife Series.” It features rapid issue life and graded death benefit versions with the choice of level term or whole-life coverage. OptionLife is an alternative for harder-to-place clients or for those who don’t want to wait for a traditional underwriting process. For more information, visit www.nationalwesternlife.com.
App for Agents
Agent Review introduced an app that helps insurance agents connect with consumers, get sales tips, and create their own marketing materials. The Agent Review app is now available for $3.99 for Apple and Android phones.
Group Voluntary Chiropractic Plan
Landmark is offering a group voluntary chiropractic plan for groups with two or more enrolled subscribers/employees. Premiums can be paid with pre-tax dollars, further enhancing the value of this benefit to the employee and employer. Plan benefits feature the following:
- A $20 office visit copayment
- 20 annual visits
- $20 emergency visit copayment
- $65 X-ray copayment
- No prior authorization
- No medical management
Participating employees can save over $1,000, or more than 60% off retail, when using a Landmark Voluntary Chiropractic Plan versus paying typical retail charges for the same services. For more information, email sales@LHP-CA.com, visit www.LHP-CA.com, or call 800-298-4875, Option 5.
Employee Assessment
Talexis launched a suite of workforce assessment products for upper-level, mid-level, and entry-level employees. Talassure Workforce Assessments help reveal insights about job candidates and existing employees. For more information, visit www.talexis.com.
Genworth Sells Blocks of Term Life Insurance Policies
Genworth Financial has sold blocks of term life insurance to Protective Life Insurance Company. Genworth says that the transaction generates capital from low-return blocks to increases the company’s strength and financial flexibility. For more information, visit genworth.com.
Webinar Series For Brokers
Unum’s free webinar series for brokers and consultants focuses on the issues and opportunities in employee benefits:
- Tuesday, Jan. 26, 2 p.m. – “The 6-Year-Old Affordable Care Act: It’s Predictable Yet Confounding, Exhausting, and Full of Possibility” by Andrew Molloy, assistant vice president of National Client Group products and service solutions
- Tuesday, Feb. 23, 1:30 p.m. – “Creating Value & Opportunity Through Technology,” by Krista Manning, assistant vice president of solutions management
- Thursday, March 10, 2 p.m. – “Long Term Disability’s Natural Extension to Individual Disability & Creating Clear Client Value” by Branden Pierson, national sales leader for executive benefits
For more information, visit www.unum.com.