Millions Remained Uninsured in California | California Broker Magazine

IN CALIFORNIA

Millions Remained Uninsured in California
The Affordable Care Act (ACA) helped lower the uninsured rate in California from 16% in 2013 to 11% in 2014, but 3.8 million Californians under 65 remained uninsured. The California HealthCare Foundation released the following statistics on who gained coverage in California:

Californians age 21 to 24 experienced the largest drop in the number of uninsured from 25% in 2013 to 16% in 2014.
25% of the state’s remaining uninsured were 25 to 34, and 57% were Latino.
About 13% of the employed population were uninsured.

For more information, visit www.chcf.org/almanac.

Bill Would Prevent Over-Prescribing
A California bill would require doctors to check California’s prescription drug database before prescribing opiates. The Controlled Substance Utilization Review and Evaluation System (CURES) is the nation’s most advanced prescription drug monitoring program, but just 35% of California providers and dispensers use it. Carmen Balber, executive director of Consumer Watchdogs said, “California loses 4,500 people a year to preventable drug overdoses–more than any other state….The legislature can help…by requiring doctors to check the prescription database before recommending patients take the most dangerous and addictive drugs. It’s clear that making use of the database voluntary does not work.”

SB 482, by California state Senator Ricardo Lara, would require doctors to check California’s CURES database when prescribing Schedule II or III drugs like Oxycontin to a patient for the first time, and annually thereafter if the treatment continues. The Centers for Disease Control and Prevention issued new prescribing guidelines that recommend doctors use prescription drug databases every time they prescribe an opioid. Last month, president Obama proposed $1.2 billion in new federal funding to fight opioid abuse, including funds to expand the use of state prescription drug databases.

Twenty-two states mandate use of a state prescription database. States that track results have seen reduced doctor-shopping and lower opioid prescription rates. Also doctors say that the databases are useful to them in prescribing the right medications. The following states have seen improvements after mandating the use of a database:

New York saw a 75% drop in patients seeing multiple prescribers for the same drugs.
Kentucky found that opioid prescriptions to doctor-shopping individuals fell 54%. Also, overdose-related deaths declined for the first time in six years in 2013.
Tennessee saw a 36% drop in patients who were seeing multiple prescribers to get the same drugs. Tennessee prescribers say they are 41% less likely to prescribe controlled substances after checking the database, and 34% more likely to refer a patient for substance abuse treatment. Also, 86% of prescribers say the database is useful for decreasing doctor shopping.

Warner Pacific Welcomes Brent Hitchings
Brent Hitchings has joined Warner Pacific Insurance Services as director of sales. Hitchings will lead Warner Pacific’s efforts to grow relationships with its agent customers, primarily in Central and Northern California. Neil Crosby, also director of sales, will continue to do the same, and will be focused primarily in Southern California. As a 25-year veteran in the health insurance industry, Hitchings was most recently the vice president of Small Group Sales for Blue Shield of California. For more information, visit www.warnerpacific.com.

RETIREMENT PLANNING

401(k) Plans Don’t Get Reviewed Often Enough
A study by MassMutual reveals that many financial advisors don’t review retirement plans as often as many sponsors want. Fifty-seven percent of plan sponsors want advisors to help them review their retirement plans semi-annually or more often, but only 44% of sponsors say their their advisors do so. However, sponsors who rely on advisors typically review their retirement plans more often than those who don’t use an advisor.

Also, reviews often miss what’s most important. Tom Foster Jr. of MassMutual said, “Frequent, focused plan reviews are essential to…help ensure that plan participants are saving enough to retire when they reach their traditional retirement age. It’s a clear opportunity for financial advisors to improve and build their retirement plan practices.” Foster said, “Only one in four sponsors reviews its plan to determine whether employees are saving enough to retire…Any improvements to a plan should generally start with a careful review, and include consultation with plan legal counsel and other experienced advisors.”

During plan reviews, sponsors who work with an advisor typically prioritize satisfaction with their plan provider. Sponsors without an advisor prioritize fees and costs. Foster said, “Advisors can do a world of good to help employers focus on savings, the effectiveness of educational programs, and…whether their employees are on target to be retirement ready. Participation in the plan is certainly important too. If every employee participates, but each saves only 1% of his or her salary, it’s totally ineffective as no one will ever be prepared to retire.” For more information call 800-874-2502, option 4 or visit www.massmutual.com.

Consumers Are Not Preparing for Retirement

Consumers are more confident that they will have a comfortable retirement than they were during the recession, but they have not done much to plan for retirement, according to a survey by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates. The survey reveals the following about workers in 2016:

21% are very confident about having enough money for a comfortable retirement compared to 22% in 2015 and 13% in 2013.
42% are somewhat confident compared to 36% in 2015.
19% are not confident compared to 24% in 2015.
11% with a plan are not confident about their financial security in retirement compared to 38% of workers without a plan.
83% without a plan have less than $10,000 in their household’s savings and investments, excluding the value of their primary home and any defined benefit plans. In contrast, 35% of workers with a retirement plan have $100,000 or more in savings and investments.

For more information, visit www.ebri.org.

LONG-TERM CARE

Six Long Term Care Insurance Companies Saw 2015 Sales Growth
Sales of long-term care insurance declined in 2015. But six insurers reported sales growth of as much as 62%, according to the American Assn. for Long-Term Care Insurance. The following are the top LTC insurance companies ranked by number of lives sold:

Northwestern Mutual
Mutual of Omaha
Genworth Financial
Transamerica Long Term Care
John Hancock
New York Life
Bankers Life and Casualty
Massachusetts Mutual
Thrivent Financial
LifeSecure Insurance Company

Jesse Slome, director of the American Assn. for Long-Term Care Insurance said that, while sales of traditional long-term care insurance are declining, sales of linked benefit products are growing stongly. Slome added, “I believe the number of people buying these policies is far greater than any of the reports you read. No one is really doing an accurate analysis of policy sales. Senior-level executives have acknowledged that as many as 30% to 40% of all life insurance policies they sell now include some form of long-term care benefit.” For more information, visit aaltci.org.

MERGERS & ACQUISITIONS

Centene Completes Acquisition Of Health Net
Centene Corp. completed its acquisition of Health Net. Health Net is now a wholly owned subsidiary of Centene and is no longer a publicly traded company. Michael Neidorff, CEO of Centene said, “We are now the largest Medicaid managed care organization in the country. Centene expanded its government program offerings to include Medicare Advantage, as well as those offered through contracts with the Depts. of Defense and Veterans Affairs. Neidorff said, “The acquisition increases our scale across health insurance marketplaces while maintaining Health Net’s presence in the California commercial market.” He said that Centene also benefits from greater scale and a stronger financial profile.

California Insurance Commissioner Dave Jones said, “After thorough review…I concluded that this transaction provides an opportunity to bring new capital and resources from a major national health insurer largely outside of California to enable a California health insurer to continue to compete and offer consumers additional choices in California’s individual, small group, and large group commercial health insurance market.”

The following are conditions for the commissioner’s approval of the merger:

Merger costs will not be imposed on California policyholders.
Health Net will maintain and grow its commercial line of business in the small group and large group health insurance markets.
Health Net Life will continue to offer products through Covered California.
Centene and Health Net Life must provide sufficient networks of medical providers and timely access to medical providers and hospitals.
Centene and Health Net Life must improve the quality of care delivered through their health insurance.
An adequate distribution channel for Health Net health insurance must be maintained.
Senior management for Health Net’s California operations must remain in California. Restrictions are placed on Centene’s ability to move Health Net Life out of state.
Centene will make a $200 million infrastructure investment by establishing a California call center.
Centene and Health Net will invest an additional $30 million in California’s low- and moderate-income neighborhoods, with investments prioritized for health facilities.

Jones said, “There are many reasons to be skeptical about health insurance mergers…Studies show that health insurance prices increased after mergers. This merger and the condition of the companies involved, however, present circumstances which led me to conclude that, with strong and comprehensive conditions, this merger was in the best interest of Californians.

Jones added, “Health Net Life Insurance, despite its name, is a health insurance company. Health Net Life has had declining market share and declines in covered lives in its commercial health insurance business. The merger with Centene provides Health Net Life with access to additional capital and resources to…compete successfully in a California market dominated by three much larger health insurers (Kaiser, Anthem Blue Cross of California, and Blue Shield of California) and several other national health insurers (United Health Care, Aetna, CIGNA).”

Groups Says California Should Reject the Anthem-Cigna Merger
Consumer Watchdog called on Insurance Commissioner Dave Jones to reject a proposed merger of Anthem and Cigna. Carmen Balber with Consumer Watchdog said, “Insurance industry consolidation has gone too far in California, costing consumers in the form of higher prices, reduced benefits, narrower networks, and fewer choices. It is no longer believable to claim that making the few insurance giants larger could benefit consumers. It’s time to draw a line in the sand. The only action that truly protects California policyholders is for the Dept. of Insurance to reject the Anthem-Cigna deal.” Nine metro areas in California will be among the hardest-hit in the nation if the merger is approved, and nearly every major population center in the state could be affected, according to an American Medical Association analysis using federal merger guidelines,” she said.

The following is a summary of a statement prepared by Consumer Watchdog: If the Anthem-Cigna merger proceeds, Anthem will gain a near-monopoly in the self-insured market at 69% of the market, meaning higher costs and less options for large companies that pay Anthem or Cigna to administer their health plans and employ nearly 4 million Californians. A merged Anthem-Cigna would surpass Kaiser to become the largest insurer in the state. Regulators cannot exact enough concessions from the companies to protect consumers from the negative impacts of an Anthem-Cigna merger.

Consumer Watchdog recommends these conditions for approving the merger:

Anthem should commit to not implementing rate hikes that regulators find to be unreasonable.
Anthem should be prohibited from upstreaming profits to its parent company while increasing premiums.
Anthem should have to disclose details of any administrative services payments to its parent company out of state. This would allow the public to determine whether the payments have been inflated to hide upstreaming of California policyholder money to shareholders.
Anthem should not be allowed to remove reserves from California or otherwise require California policyholders to pay for severance, retention, or other compensation packages for executives in connection with the merger.
Anthem should immediately submit its provider networks for review.
Anthem should commit to expanding network size for all plans that give consumers access to less than 50% of providers in the area.
Anthem’s filings with the Dept. of Insurance should be public documents. Grants of confidentiality should only be allowed sparingly, with explanation of the sensitive nature of the withheld documents, if at all.
Anthem should be subject to steep penalties for violating any provision of these undertakings, and revocation of approval if there is a pattern of violations.

For more information, visit ConsumerWatchdog.org.

Insurance Consolidation Continues

The insurance industry saw significant increases in mergers and acquisitions globally in 2015, according to a study by Conning. Jerry Theodorou, vice president, Insurance Research at Conning said, “The distribution sector remains in a state of consolidation, with the number of global mergers and acquisitions increasing for a third consecutive year…Deal volume…reached a new high in 2015 at nearly $20 billion, albeit driven by one significant transaction.”

The Conning study analyzes U.S. and non-U.S. insurance industry mergers and acquisitions across distribution and services sectors. Specific transactions are detailed, and trends are analyzed across sectors. Steve Webersen, head of Insurance Research at Conning said that insurance services sector transactions increased more than 25%, driven by acquisitions of claims adjusters/TPAs, health services firms, and insurance technology providers. He added that buyers are interested in big data and predictive analytic technologies as well as greater capabilities to meet the demands of a changing health care environment, such the Affordable Care Act. For more information visit www.conningresearch.com.

LIFE INSURANCE

Transamerica Sued Over Premium Hikes
Consumers who bought life insurance from Transamerica decades ago are now facing a choice between paying enormous increases in their monthly premiums or losing their policies, according to a lawsuit filed in federal court in Los Angeles by consumer advocates. In the late 1980s and early 1990s, Transamerica sold universal life insurance that promised to pay guaranteed monthly interest of no less than 5.5% annually, as well as death benefits, in exchange for premiums paid by policyholders into a policy savings account. Couples like plaintiffs Mary and Gordon Feller, and Margaret and George Zacharia, bought the policies. But in June 2015, policyholders got a letter from Transamerica announcing that the company was increasing the monthly charges on the policy by 38%, in the case of the Fellers and the Zacharias. This has left policyholders with the choice of paying higher premiums to cover the higher charges, or lose the policies.

Mary Feller said,.”My husband Gordon and I bought our policy in 1989 planning to save the accumulated interest for our golden years. Now, 26 years later, after we have paid tens of thousands of dollars in premiums all these years, the company has put us in the position of paying much higher premiums or losing our policy and all the savings we put into it. Transamerica has betrayed our trust and the trust of its policyholders across the nation.”

Transamerica claims that it is raising the monthly charges that it deducts from policyholder accounts based on “our future costs of providing this coverage.” But the lawsuit alleges that Transamerica breached its contract and acted in bad faith by raising the charges as a pretext to avoid or offset its obligation to pay guaranteed monthly interest payments to policyholders. According to the complaint, because people are now living longer the cost of insurance under the policies is lower than when the policies were issued; Transamerica is attempting to collect increased monthly deductions from the policyholders.

The lawsuit also alleges the following:

Transamerica is trying improperly to recoup losses it sustained as the result of low interest rates since the Great Recession.
It upstreamed billions in profits to its parent company.
Transamerica not only expects, but intends that thousands of policyholders will be forced to give up their policies as a result of the increases in the monthly deductions.

Harvey Rosenfield, founder of Consumer Watchdog and one of the lawyers working on the case said, “After taking their premiums for many years, Transamerica is attempting to dump its elderly and retired policyholders at a time in their lives when they are counting on the policies. This is a betrayal of the Baby Boomers who trusted the Transamerica brand. We look forward to making sure the victims of this cynical scam get their day in court.”

Lawyers for Consumer Watchdog are joined by those of Bonnett, Fairbourn, Friedman & Balint, P.C., nationally recognized life insurance litigators, and from the law firm of Shernoff, Bidart, Echeverria & Bentley. The suit was filed in federal court in Los Angeles. A copy of the complaint, and a factsheet about the case, can be found here: http://www.consumerwatchdog.org/case/transamerica-life-illegally-hikes-cost-insurance-charges

EMPLOYEE BENEFITS

American Workers Choose Wages Over Benefits
American workers are satisfied with their health insurance benefits, but there is a long-term trend toward wanting more cash and fewer benefits, according to a survey by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates. A third of workers surveyed would change the mix of wages and health benefits, which may reflect a growing desire for real wage growth. From 2012 to 2015, the percentage of workers who are satisfied with their health benefits fell from 74% to 66%. At the same time, the percentage who would rather have fewer health benefits and higher wages increased from 10% to 20%. For more information, visit ebri.org.

Making the Most of Exit Interviews
Many employers are taking their workers’ parting words to heart, according to a study by OfficeTeam. Sixty-three percent of HR managers say their company commonly acts on feedback from exit interviews. Twenty-nine percent update job descriptions; 24% address comments about management; 22% make changes to the work environment; and 19% review salaries.

Brandi Britton, a district president for OfficeTeam said, “Departing workers can provide valuable insights that current staff may be reluctant to share. Although not every criticism will be worth responding to, the most crucial issues should be addressed immediately to help keep existing team members happy and loyal.” OfficeTeam offers these dos and don’ts when conducting exit interviews:

Do time it well. Consider scheduling the meeting on one of the worker’s last days. Keep the conversation brief and professional.
Don’t make it awkward. Have an HR representative conduct one-on-one meetings in a private setting because a departing employee may be uncomfortable discussing certain subjects with their immediate supervisor.
Do cover the right topics. Ask general questions about why the worker is leaving, what the person liked and disliked at the company, and recommendations for improvements.
Don’t get defensive. Avoid correcting or confronting the person. Listen carefully and gather as many details as possible.
Do be upfront. Explain that any information provided can help to improve the organization and will be kept confidential.
Don’t brush things off. Give all comments that are shared the proper attention. Also check for patterns in feedback collected from employees that could signal persistent problems.

For more information, visit officeteam.com.

HEALTHCARE

The Costs of Caring for Newly Enrolled Individual Members
Individuals who enrolled in Blue Cross and Blue Shield (BCBS) health plans after the Affordable Care Act (ACA) took effect have higher rates of disease. They also received much more medical care than did those who enrolled in individual plans before 2014. The study finds the following:

Members who were newly enrolled in BCBS individual health plans in 2014 and 2015 had higher rates of certain diseases, such as hypertension, diabetes, depression, coronary artery disease, HIV, and Hepatitis C.
New enrollees received much more medical care than did those with BCBS individual plans before 2014 who maintained BCBS individual health coverage into 2015, as well as those with BCBS employer-based group health insurance.
New enrollees used more medical services including inpatient admissions, outpatient visits, medical professional services, prescriptions filled, and emergency room visits.
Medical costs of care for the new individual market members were 19% higher than employer-based group members in 2014 and 22% higher in 2015. For example, the average monthly medical spending per member was $559 for individual enrollees versus $457 for group members in 2015.

Alissa Fox, senior vice president of the office of policy and representation for BCBSA said, “Better communication and coordination is needed so that everyone understands how to avoid unnecessary emergency room visits, make full use of primary care and preventive services, and learn how to properly adhere to their medications.” BCBS companies are expanding prevention, wellness, and coordinated care programs. Fox said that these programs have helped BCBS companies reduce emergency room visits, hospital admissions and readmissions, and hospital infection rates. There have been measurable improvements in prevention, including improved cholesterol control, better adherence to best practices for treating diabetes, and higher rates of screenings and immunizations. For more information, visit www.bcbs.com/healthofamerica.

Is it a Myth that Health Care Costs Are Spiking Under the ACA?

Former White House spokesman Robert Weiner and analyst Daniel Khan argue that the Affordable Care Act has not caused massive spikes in healthcare premium. In a recent article in the Tallahassee Democrat, Weiner and Khan say that one of the biggest issues in the presidential election is a recurring Republican critique of the Affordable Care Act: the supposedly massive healthcare price spikes. Frontrunner Donald Trump said, “I don’t know if you have been watching lately — people’s premiums are going up 35, 45, 55%. Their deductibles are so high nobody’s ever going to get to use it. Obamacare is turning out to be a bigger disaster than anybody thought.” Weiner and Khan say the results speak otherwise.

The following are highlights of their arguments: It is true that employer-based insurance premiums increased 26% from 2009 to 2014, but before the passage of the ACA, they went up 34% from 2004 to 2009 and 72% from 1999 to 2004. So we are talking about half the increases compared to before the law. Twenty million more Americans now have health insurance through the Affordable Care Act, including nearly 8 million new Medicaid enrollees under Obamacare’s expansion, according to Obamcarefacts.com.

In addition, people will be living longer. According to a Harvard School of Public Health study of Massachusetts, “In each of the first four years of the state law, 320 fewer Massachusetts men and women died than would have been expected. That’s one life extended for every 830 newly insured residents.” Another study, by the American Journal of Public Health, shows that nearly 45,000 people die every year due to a lack of health insurance.

Yet the literally sickening (potentially to millions) refrain persists, “Repeal and replace Obamacare.” The House has now voted to repeal it 63 time (but never with the replace part, since they’d actually use Obamacare provisions).Even in Kentucky, with uninsured down to an all-time low 7.5% there, U.S. Senate Leader Mitch McConnell, Republican from Kentucky, takes credit for the insurance expansion by his state, but refuses to publicly acknowledge it’s because of and under Obamacare. It’s as though it came from the sky.

Florida’s great former congressman and senator, Claude Pepper, fought for national health insurance his whole life. He would be incensed at the opponents of Obamacare for trying to block the coverage for millions who now have it. Pepper, whose library and museum are at Florida State University in Tallahassee, said back in 1987, “What I’m talking about is a principle of insurance applied to health care. We insure our homes. We insure our businesses. Why can’t we insure something that’s even more important to us, our lives and our health?”

In 2013, Gov. Rick Scott, who knows health costs as a former hospital group administrator, was for Obamacare Medicaid expansion before he was against it. He said, “While the federal government is committed to pay 100% of the cost, I cannot, in good conscience, deny Floridians the needed access to health care.” Then he lost that “good conscience” to politics. He reversed after his Republican legislature refused to allow it for fear of giving Obama credit for anything.”

According to HHS.gov, if Florida were to expand Medicaid, an additional 848,000 uninsured people would gain coverage.” Even without, under Obamacare’s marketplace, a Gallup poll confirmed that the uninsured rate in Florida in 2014 was 18.3%, down from 22.1% in 2013.

Through healthcare.gov, customers can search for an array of plans based on their financial and health priorities. Customers are able to switch plans, which enables them to save a lot of money. According to the HHS, those who switched plans within the same metal tier (platinum, gold, silver, bronze) saved an average of nearly $400 on their 2015 annualized premiums after tax credits as compared to those who stayed in their same plans.

According to HHS, about 8 out of 10 returning consumers will be able to buy a plan with premiums less than $100 dollars a month after tax credits; and about 7 out of 10 will have a plan available for less than $75 a month.

A smart consumer can both achieve health care coverage and save money, without succumbing to the naysayers who either have not done their homework comparing plans or, for political purposes, do not want to credit the President for a major achievement.

Robert Weiner is a former spokesman for the Clinton White House and was Chief of Staff of Cong. Claude Pepper’s (D-FL) House Aging Committee and Subcommittee on Health. Daniel Khan is senior policy analyst at Robert Weiner Associates and Solutions for Change. Here is a link to article: http://www.tallahassee.com/story/opinion/2016/03/25/spiking-health-care-costs-aca-myth/82267170/

NEW PRODUCTS

PPO Network Added to Short Term Medical Plan
Petersen International Underwriters of Valencia, Calif. launched an enhanced short term medical plan. It now offers a preferred provider network from First Health, removing the requirement for claims reimbursements. Client out-of-pocket expenses will be limited to standard policy deductibles. An insured person does not need to worry about paying up-front for medical services nor having to submit claims for reimbursement of expenses incurred. Petersen says that he addition of a well-known and reliable PPO network will be a key marketing advancement for the agents. Petersen International is providing the First Health PPO network at no additional cost to applicants of the short term medical plan. For more information, call 800-345-8816 or email piu@piu.org..

Small Group Rate Quote & Premium Calculator
Landmark Health plans has updated its rate quote and premium calculator, allowing brokers to quote our small group plans through June 1, 2017 effective dates. Rates remain low and unchanged since July 2015. Landmark is about to launch a multi media marketing ad campaign in Sacramento County to help support to support landmark individual & family plan membership. Recently, Landmark Healthcare changed its name to eviCore healthcare. Launched earlier this year, Landmark’s group voluntary chiropractic plan is for groups with two or more enrolled subscribers/employees. For more information, visit www.LHP-CA.com or call 800-298-4875, 0ption 5