IN CALIFORNIA
Covered California Enrollees Struggle with Premiums, but Like Coverage
More than 40% of Covered California enrollees struggle to pay their monthly insurance premiums, but many are satisfied with their coverage, according to a survey by the Kaiser Family Foundation. Forty-four percent of Covered California enrollees had a hard time affording their monthly premiums compared to 25% of adults with employer-sponsored or other private coverage. More than one-third of newly insured respondents delayed or skipped care because of cost. About 25% of Covered California enrollees said their medical bills were higher than expected. However, 84% said they had no problems paying their bills.
Seventy-four percent of Covered California enrollees said their coverage was excellent or good compared to 88% of consumers with non-exchange private insurance plans. Ninety-one percent of consumers with exchange coverage said it was easy to get care from their normal source.
Western Dental Will Drop Denti-Cal Patients
Citing low reimbursement rates, Western Dental stopped taking new patients with Denti-Cal coverage at 13 more of its California offices. But returning patients with Denti-Cal can continue care in their existing office. Also, Western Dental will close one office in San Francisco. Western Dental is the state’s largest provider of dental care services to low-income families.
Simon Castellanos, CEO and president of Western Dental said, “For more than 50 years, Western Dental has been able to serve all Californians, including those most in need and covered by the state Denti-Cal program. However, the extremely low funding and reimbursement levels for the state program have finally proven impossible to bear. We… are hopeful that the Governor and Legislature will pass a budget that will enable more providers like us to maintain the oral care that so many California children and adults need.”
Insurance Commissioner Appoints New Leader of Enforcement
Insurance Commissioner Dave Jones appointed George Mueller as deputy commissioner of the Enforcement Branch of the California Department of Insurance (CDI). Mueller will lead the department’s law enforcement and criminal investigative functions. The enforcement branch is the largest component of the Department of Insurance and consists of 400 professionals, including over 200 sworn peace officers, who investigate various insurance crimes, including workers’ compensation, auto, homeowner, health, life, annuity, and disability insurance fraud and crimes committed by insurance agents and brokers and those pretending to be agents and brokers. A sworn peace officer, Mueller comes to the department from the Los Angeles County District Attorney’s Office where he was assistant chief of the Bureau of Investigation. Mueller has served in law enforcement since 1985 when he began his law enforcement career working for the City of Alhambra Police Department as a police officer and then a detective.
HEALTHCARE
Out-of-Pocket Healthcare Spending Reaches $416 Billion
Americans spent $416 billion in out-of-pocket healthcare costs in 2014. With a growth rate of 8%, it will reach $608 billion by 2019, according to a report by Kalorama Information. Out-of-pocket spending includes direct expenditures, office co-pays, hospital visits, drug purchases, and premiums.
Premiums make up the largest category of spending, but co-payments and direct payments are growing. Direct payments are expected to grow 9.5% per year, as employers add high deductible plans. Co-payments are expected to grow 9.5% annually as plans raise co-pays and subject more products and services to co-payment. Premiums will expand by 7.1% per year.
According to Hewitt Associates, HMOs will seek double digit monthly premium increases as they face an exodus of young, healthy employees. Rx medications comprise 43% of total out-of-pocket health care costs, followed by office-based procedures at 26%. Hospital stays comprise just 1% of the average person’s out-of-pocket health care spending, although these expenditures are considerably higher for people with the highest health care expenditures. For more information, visit kaloramainformation.com.
Public Divided Over Tying Requirements to Obamacare Subsidies
With the Supreme Court case King v. Burwell keeping Affordable Care Act subsidies in the news, HealthPocket conducted a nationwide poll about tying health insurance subsidies to personal requirements. HealthPocket found the public significantly divided on the subject of tying personal requirements to Affordable Care Act subsidies, with no position securing a majority of support and a significant segment of the public uncertain of their position.
The first question of HealthPocket’s two-part survey asked, “Do you believe any requirements (e.g. no smoking) should be placed on people in order to receive Obamacare health insurance subsidies?” Respondents could select one answer from the options “No, requirements would be unfair,” “Yes, requirements would be fair,” and “I’m not sure.” Of the three potential answers, “I’m not sure” was chosen most often at 37%. Close behind this percentage was “No, requirements would be unfair” at 34% and “Yes, requirements would be fair” at 29%. None of the three options were able to attract a majority of respondents.
Respondents who answered, “Yes, requirements would be fair” were asked, “In your opinion, what requirements should be placed on people in order to receive Obamacare health insurance subsidies?” Respondents could pick one or more answers from six options displayed in randomized order. The most popular was “abstain from illegal drug use,” chosen by 71% of respondents to the follow-up question. A prohibition on smoking was nearly as popular at 65%. Maintaining preventive care such as flu shots (43%) and maintaining weight below obesity levels (37%) both failed to attract support from at least half of respondents. Least popular among the subsidy requirements was requiring subsidies to be temporary (30%) and 8% of respondents to this question did not support any of the requirements listed among the options.
Kev Coleman, Head of Research & Data at HealthPocket said, “Given that healthcare costs are partially driven by behavioral issues such as diet and smoking, we may see future policy discussions that explore the pros and cons of tying health insurance subsidies to behaviors that seek to improve overall public health and reduce healthcare utilization.” For more information, visit HealthPocket.com.
Americans Flock to Canadian Online Pharmacies
In a new survey of about 2,700 American customers, the Canadian International Pharmacy Association (CIPA) found continued demand for ordering prescription medications online from licensed Canadian pharmacies. About 64% of respondents purchase some or all of their health maintenance medications from a non-U.S. pharmacy due to lower costs. Another 22% said medications are not covered under their insurance plan.
Twenty-five percent said that a lack of money has kept someone in their household from filling prescriptions during the past year. About 30% reported having to skip doses, split pills, or take similar actions to restrict their use of prescribed medications because of high costs.
Customers reported spending an average of $250 a month per prescription for a 90-day supply of prescription medications for personal use, and saving about $246 (or 50%) per month by importing their medications from Canadian pharmacies.
Without this option, about 32% say they would only be able to fill some medications, and 1% would not be able to purchase any of their medications. Previous reports have highlighted the issue of patients going off medications or rationing and the resulting harm to health along with the costs to the health care system. Further, since many who import their medications from Canada are seniors on Medicare, non-adherence and the resulting health implications and costs are a burden to the American taxpayer. Eighty-six percent of those surveyed are 55 years or older. Additionally, 57% say their health insurance is self-funded and that they must cover the full costs of their medications. For more information, visit cipa.com.
AARP Report Reiterates Need for Fair Generic Drug Reimbursements
National Community Pharmacists Association (NCPA) CEO B. Douglas Hoey, RPh, MBA issued the following statement in response to a new report by AARP on rising generic drug costs in 2013:
“This new report…underscores the need for action by Congress to support patient access to essential medications. Moreover, a 2015 survey of 700 community pharmacists concluded that this situation has only become worse since 2013…
Patient access to these medications is threatened by more than their rising cost. Independent community pharmacies are absorbing unsustainable losses of $100 or more on these prescriptions because insurance middlemen known as pharmacy benefit managers (PBMs) may wait months to raise reimbursement rates to pharmacies to cover the higher costs.
This buy high, sell low situation threatens the viability of independent community pharmacies, which provide care in many underserved rural and inner city areas without other convenient pharmacy options. Already some pharmacies can no longer stock certain medications for patients because the reimbursement rates are so far below the cost of acquiring and dispensing them. Because of the lack of transparency, PBMs may be profiteering during…by charging health plans much higher rates than they reimburse the pharmacies.
We encourage lawmakers to cosponsor H.R. 244. This bipartisan legislation would ensure that federal health plan intermediaries, such as PBMs, update reimbursement rates for rising generic drug costs to keep pace with market conditions. It would codify and expand upon a requirement that Medicare has adopted for the 2016 plan year.” For more information, visit ncpanet.org.
What Every Patient Should Know about Medical Billing
Navigating the complicated healthcare financial system can be a nightmare with the smallest misstep costing thousands. Andrew Graham, the CEO of Colorado’s largest independent medical billing firm, Clinic Service Corporation, says that consumers can often avoid paying unnecessarily high fees with these tips:
- Tip #1: Don’t go to an urgent care facility with an injury or illness that could be too serious for the staff there to handle. If the physician at the urgent care decides you need to go to a hospital emergency department for care, they are required, by their liability insurer, to send you to the hospital ER in an ambulance. The ambulance ride is likely to cost you thousands, plus you will be on the hook for charges from the urgent care facility and the hospital.
- Tip #2: Doctors will work with you on your bill if you can’t pay it. A payment plan is an option; sometimes your doctor will even knock down his or her fee if you’re willing to settle the bill with a credit card that day.
- Tip #3: Newly insured patients often go to out-of-network doctors without knowing it, leaving them with large bills to pay. Always check with a new doctor or other healthcare provider to see if they are in your insurance company’s network. This applies to labs and imaging centers you may be referred to as well.
- Tip #4: If you’re worried about what a procedure might cost, don’t hesitate to ask your clinic’s practice manager for the details. It might be easier to do this via phone, so that the practice manager can get back to you later when they have the details.
- Tip #5: Spending a little more money on your monthly insurance payment will save you in the end. Many consumers who chose less expensive coverage options through Affordable Care Act (ACA) plans are being stuck with large medical bills when their insurance provides minimal coverage. “We all like to think we’ll be healthy in the coming year and not need the coverage, but life has a funny way of reminding us that illness and injury never take a holiday,” Graham said.
For more on Clinic Service visit clinicservice.com.
FINANCIAL PLANNING
A Look at Women in Retirement
When it comes to retirement, women report more positive experiences, but they are also more likely to experience stress, according to a study by MassMutual Retirement Services. Twenty percent of women say they are at least moderately stressed in retirement compared to 15% of men. Women are also more likely to feel frustrated, sad, lonely and nervous. Forty-nine percent of women pre-retirees are at least moderately stressed compared to 38% of men pre-retirees.
Seventy-percent of men and 65% of women are extremely relaxed or quite relaxed in retirement. The study did not find a correlation between emotional well being and the respondents’ level of retirement assets. Seventy-four percent of defined contribution (DC) plan participants say they are extremely or quite happy compared to 68% who did not participate in a DC plan; 70% of DC plan participants say they are extremely or quite relaxed compared to 61% who do not have a plan. During retirement, women report having less free time than men and yet are more likely to have new experiences and find more time for friends. For more information, call MassMutual at 1-800-874-2502, option 4.
EVENTS
Video of Private Exchange Conference
The Institute for HealthCare Consumerism (IHC) is offering a video of its recent Private Exchange FORUM in Dallas. A replay of the general sessions costs $99 for employers and brokers/consultants. For more information, visit theihcc.com.
Financial Services Conference
The Laser App 2015 Financial Services Conference will be held from August 18 to 21 in San Diego. For more information, visit laserapp.com/conference2015.
DISABILITY INSURANCE
Petersen Inducted into the Iowa Insurance Hall of Fame
W. Harold Petersen was inducted into the Iowa Insurance Hall of Fame. A pioneer of and advocate for the disability insurance industry, Petersen was one of five insurance professionals honored during the Iowa Insurance Hall of Fame’s 19th annual ceremonial dinner. W. Harold Petersen was born, raised and began his insurance career in Council Bluffs, Iowa. After moving his family to Southern California in 1967, Petersen founded a brokerage firm with a focus on traditional and specialty disability insurance. As an MGA for several of the country’s top carriers, he set records in sales and standards for the industry. Subsequently, Petersen developed a successful relationship with the Lloyd’s marketplace that has forever shaped the world of high-limit disability insurance in the United States. After more than 33 years, Petersen International Underwriters remains the largest Lloyd’s Coverholder in the American disability insurance market. Petersen can be reached at 800-345-8816 or at whp@piu.org.
NEW PRODUCTS
Rollover Perks to Dental Members
Anthem Blue Cross introduced a dental rollover feature for large employer groups and national accounts that select Anthem’s dental plan. Employees can bring in maximum carryover amounts from their previous dental carrier and retain the balances they earned. Members who don’t reach $500 in claims get $250 in credit for each year they meet this criteria, up to $1,000. They can spend this credit on dental care (with the exception of orthodontia) in years when the member’s annual claims exceed their plan’s annual maximum. For more information, visit anthem.com.
Critical Illness Insurance
Transamerica launched of CriticalEvents – critical illness insurance that helps to ease the financial burden of a major health event. Features include the following:
- No lifetime benefit maximum
- No waiting period
- Easy enrollment options
- Payroll-deducted premiums
- Simple product design – no categories for critical illnesses
- HSA compatibility
- New recurrent benefit options
- New issue age, attained rate and composite rate options
- Claims can be submitted online
For more information, visit transamerica.com.
