Medical Marijuana Reduces Medicare Part D Drugs Costs

Medical marijuana saves state and federal governments millions of dollars on Medicare. For example, prescriptions for painkillers have dipped drastically in states where medical marijuana is available, according to a Univ. of Georgia study published in the July issue of Health Affairs. Researchers combed through data on all prescriptions filled by Medicare Part D enrollees from 2010 to 2013 for a total of over 87 million physician-drug-year observations. In medical marijuana–approved states, the average doctor prescribed fewer doses of antidepressants as well as seizure and anti-nausea medication. Researchers narrowed the results to conditions for which marijuana may be an alternative treatment, selecting nine categories in which the Food and Drug Administration had already approved at least one medication: anxiety, depression, glaucoma, nausea, pain, psychosis, seizures, sleep disorders, and spasticity.

In 2013, Medicare saved $165.2 million in lower prescription drug use when 17 states and the District of Columbia implemented medical marijuana laws. The results suggest that if all states had implemented medical marijuana, Medicare would have saved about $468 million. “The results suggest people are really using marijuana as medicine and not just using it for recreational purposes,” said study author Ashley Bradford.

The next study will look at medical marijuana’s effects on Medicaid. Researchers expect the cost savings to be repeated, saying their findings suggests that more widespread state approval of medical marijuana could provide modest budgetary relief. For more information, visit http://content.healthaffairs.org/content/35/7/1230.abstract.

Early Alzheimer’s Treatment Saves Medical Costs
Alzheimer’s patients who received medication for the disease ended up costing the health system less and had lower mortality rates, according to a study presented the Alzheimer’s Association International Conference (AAIC) in Toronto last week. “Even with today’s first-generation therapies, early Alzheimer’s treatment has significant potential to benefit the individual with the disease as well as the economy,” said Maria Carrillo, PhD, chief science officer, Alzheimer’s Assn. Christopher Black from Merck said, “Since Alzheimer’s is incurable and progressive, some assume that treating dementia is an unjustified cost drain on our healthcare system, but this study presents compelling arguments for prescribing the standard of care.”

Average health care costs more than tripled in the month after an Alzheimer’s diagnosis. But those receiving an Alzheimer’s treatment had lower health care costs in the month after they were diagnosed compared to those who did not receive a treatment ($5,535 versus $6,711). Though people who initiated taking medications had higher pharmacy costs, their total health expenditure was less than the people who did not take approved medications ($2,207 vs. $2,349 per patient per month). For more information, visit alz.org.

Trump v. Clinton: How They Line Up On Health

The Philadelphia Inquirer offers an analysis on the Candidate’s Position on health care. The following is a summary the article:

Health insurance

Clinton: Wants to improve the Affordable Care Act. She wants to reduce the cost of health insurance purchased on exchanges and provide a tax credit of up to $5,000 a family to offset out-of-pocket costs and premiums above 5% of household income. She would expand tax credits and cap the cost of premiums at 8.5% of family income. She calls for fixing the “family glitch” so families can access coverage in the exchanges when their employer’s family plan is not affordable. She would allow undocumented immigrants to buy insurance through the exchanges. In what is seen as a nod to Bernie Sanders’ supporters, she is affirming support for a public option that would allow people as young as 55 to buy health insurance through Medicare.
Trump: Opposes requiring people to buy health insurance. He wants to repeal the Affordable Care Act. He proposes to make coverage more affordable by allowing sales of health insurance across state lines and permitting people to deduct health insurance premium payments from their taxes. He would emphasize tax-deductible health savings accounts (HSA) where funds could accumulate if they are not used. He wants to require price transparency by health-care providers so that people can shop around for the best prices. He also wants would-be immigrants to certify that they can pay for their own health care.

Prescription drugs

Clinton: Wants to eliminate tax breaks that pharmaceutical companies get for direct-to-consumer advertising, and require those that benefit from federal research spending to reinvest profits into research. She would ban legal settlements in which pharma companies pay competitors so they will hold off on introducing generics and would allow consumers to import cheaper drugs from countries such as Canada. She supports allowing Medicare to negotiate lower drug prices and would cap out-of-pocket costs for people with chronic health problems.
Trump: Calls for a free market for prescription drugs, including allowing consumers to import them from countries that regulate prices. This practice is now illegal, though the law is not firmly enforced.

Medicaid

Clinton: Supports president Obama’s proposal to let states that sign up for Medicaid expansion to get a 100% match for the first three years. She would expand access to Medicaid and children’s health insurance.
Trump: Wants states to get federal Medicaid funding through block grants, which could mean fewer dollars for many states, but would give local officials more authority over expenditures.

Medicare

Clinton: Has vowed to fight proposals to privatize or phase out Medicare, and would give Medicare the power to negotiate lower drug costs.
Trump: Is against abolishing Medicare.

Social Security

Clinton: Opposes privatizing Social Security, reducing annual cost-of-living adjustments, and raising the retirement age. Clinton would expand Social Security for some, such as widows and caregivers, and help to fund the benefit through a wealth tax.
Trump: Has voiced support for Social Security and called it “honoring a deal.” He has said that Republicans cannot win elections if they seek to change it substantially.

Veterans Administration

Clinton: Says she would ensure more timely benefits, block privatization efforts, and strengthen services for military families and employment programs for veterans.
Trump: Has vowed to reform the agency and make it more efficient in delivering service and employment assistance.

Abortion

Clinton: Wants to protect access to safe and legal abortion.
Trump: Back in 1999, he told Meet the Press that, despite his personal dislike of abortion, “I’m very pro-choice.” More recently, he announced, “I am pro-life.” This year, Trump he said on MSNBC that if abortion were banned, women who violated the law would have to be punished. Soon after, his campaign released a statement saying that providers, not patients, should be held liable. His running mate, Indiana Gov. Mike Pence, has backed some of the nation’s toughest abortion restrictions.

HIV/AIDS

Clinton: Her proposals include funding research to seek a cure; finding more affordable treatment, including capping prescription costs; urging all states to extend Medicaid coverage for people living with HIV; and increasing use of HIV prevention medication.
Trump: Has not issued a policy on HIV and AIDS, though some in the advocacy media say his goals of lowering prescription drug costs and increasing transparency about health care pricing could be beneficial.

Medical research funding

Clinton: Advocates increasing funding for Alzheimer’s research to $2 billion a year, paying for care-planning services through Medicare, and funding a federal program to help locate Alzheimer’s patients who wander.
Trump: Has called funding for Alzheimer’s research “a total top priority,” but he has not offered many specifics about policies he would pursue. He has alarmed the research community with scientifically unfounded statements about Ebola, autism, and climate change.

Autism

Clinton: Has called for a nationwide early-screening campaign. She wants to push all states to require health insurance coverage for autism services, help get adults on the autism spectrum connected to employment opportunities, and fund more research.
Trump: In tweets and during a presidential debate, Trump has linked autism to some vaccinations, a tie that has been widely debunked by international medical authorities and advocates, such as Autism Speaks, a group that Trump has supported.

Addiction and drugs

Clinton: Would increase funds for addiction treatment and prevention, and emphasize rehabilitation over prison for low-level and non-violent drug offenses. She wants more preventive services for adolescents, opioid antidotes for all first responders, and more training for drug prescribers.
Trump: In New Hampshire, Trump vowed to fight addiction on two fronts saying, “First, we have to support locally based and locally run clinics, and we have got to close the border. That’s where the drugs are coming from.”

Medical marijuana

Clinton: Supports the use of medical marijuana.
Trump:.Supports the use of medical marijuana.

Family and medical leave

Clinton: Advocates a paid family and medical leave of up to 12 weeks with at least a two-thirds wage replacement rate. She proposes paying for the plan with taxes on the wealthy.
Trump: He told Stuart Varney on Fox News last year, “Well, it’s something that’s being discussed. I think we have to keep our country very competitive, so you have to be careful of it.”

Federal funding of Planned Parenthood

Clinton: Supports federal funding of Planned Parenthood.
Trump: At a news conference on Super Tuesday, Trump said he would not give federal funds to Planned Parenthood because the organization performs abortions. But he praised the health care it provides, saying, “millions and millions of women – cervical cancer, breast cancer – are helped by Planned Parenthood.”

Response to DOJ’s Move To Block Mergers

The Justice Dept. is suing to block two proposed mergers between major health insurance companies, saying the deals violate antitrust laws. The lawsuits argue that a $37 billion merger between Humana and Aetna would lead to higher health-insurance prices, reduced benefits, less innovation, and worse service for over a million Americans. The DOJ also says that the $54 billion acquisition of Cigna by Anthem would be the largest merger in the history of the health insurance industry. California insurance commissioner Dave Jones said, “I urged the DOJ to prevent these health insurance mergers, which would result in a highly concentrated, less competitive health insurance market doing irreparable harm to consumers and businesses. During the public hearings I convened, I questioned executives from Anthem, Cigna, Aetna and Humana. None of the companies were able to substantiate their claims of savings associated with the mergers. Not one company executive was willing to commit to pass along alleged cost savings to consumers through lower premiums. Bigger is not better when it comes to health insurance mergers. History has shown that health insurance mergers result in higher prices, fewer choices, and lower quality of care.”

Dr. Merrill Matthews of The Institute for Policy Innovation said, “The Obama administration is attempting to block the Aetna-Humana and Anthem-Cigna mergers because it wants more competition, but if compounding financial losses force these companies to drop out of the exchanges, there won’t be any competition. Two larger health insurers are better than none. Health insurance company mergers started shortly after the ACA passed in order to survive the new environment of high costs and government regulations…For example, Arizona’s Maricopa County was once praised as a center of robust competition with eight insurance companies competing in its ACA exchange. But in just a few years, that number will drop to only three insurers, two of which are Aetna and Cigna. If Washington stifles these same companies’ attempts to stay afloat in the exchanges, Maricopa County and other areas could see only a single insurer available in its marketplace—if any at all…If the Department of Justice’s stonewalling is successful, those insurers will likely join many others and pull out of the Obamacare exchanges, leaving even less competition and higher prices. And that will force the administration to devise even more excuses for why health care costs are exploding.”

IN CALIFORNIA

Industry Response to 2017 Covered California Rates

The California Assn. of Health Plans president & CEO Charles Bacchi issued the following statement on Covered California rates for 2017: “In 2017, Covered California prices are influenced by higher spending on medical care, particularly skyrocketing prices on specialty drugs, and the sunset of two federal programs. California’s health exchange opened up access to health care for millions, with 11 health plans in Covered California competing over price and quality in most regions of the state. Some rate increases are necessary to cover the cost of care as more and more Californians use medical services that have become increasingly expensive each year. As prices for hospitals, doctors, specialty drugs and other services keep climbing, we cannot lose focus on the need for affordability.”

The California Association of Health Plans also released an infographic that illustrates the primary and secondary factors affecting 2017 health coverage premiums. While premiums will change in 2017, nine out of 10 enrollees qualify for subsidies to help pay for coverage and ensure Californians have access to quality, affordable health care. To view CAHP’s infographic on 2017 premiums, visit runawayrx.org.

EMPLOYEE BENEFITS

Wellness Plans Need More Personalization
The keys to maximizing a wellness plan is to offer personalization, provide rewards, and understand what employees want, according to a survey by Welltokget and the National Business Group on Health. The study, which is based on the responses of over 1,000 full-time employees at large companies, reveals the following:

81% say their company wellness plan has improved their physical well-being.
60% say that including family in wellness programs is likely to increase participation.
37% of those who did not participate in the company’s wellness program did not find it relevant to them, and 20% didn’t know it was available.
78% of those earning $200,000 more would engage in healthier behaviors if they got rewards as would 98% of all employees under 35 and 85% of those over 55.
86% said the top motivators for improving their health came from colleagues, followed by their direct manager (57%).
64% of Millennials said that their direct manager influenced them to improve their health compared to 51% of those 55 and older.
24% of Millennials said HR influenced them to improve their health compared to 40% of those 55 and older.
63% of households making less than $50,000 want employers to play a role in their financial well-being compared to 44% of those making $200,000 or more.
60% of participants from 18 to 34 say that employers should be involved in financial health compared to less than half of those 45.
58% of women say employers should play a role in employees’ financial health versus 48% of men.
77% of employees say that their employers should play a role in helping them get cost effective care.
74% say the employer should provide emotional/personal support resources.
53% say employers should play a role in helping them stop unhealthy behaviors.
53% say employers should help them manage financial issues.
24% participate in emotional health benefits.
37% participate in financial security programs.
48% of employees participate in programs to help them improve their physical health.

Brian Marcotte, CEO and president of the National Business Group on Health said, “It is clear that employees can benefit from employer-sponsored programs aimed at improving physical, financial and emotional health, along with decision support resources to maximize their health care experience. The one size fits all approach to communications has proven ineffective in engaging employees and engagement is now the number one challenge facing employers. Personalization is the key. Emerging engagement platforms…shows great promise…by leveraging data, predictive analytics, and technology to reach people with personalized, timely, relevant, and actionable information.” For more information, visit welltok.com.

Cognitive Behavioral Therapy Proven to Improve Work Performance
SelfHelpWorks is offering cognitive behavioral therapy as an employee benefit. It’s designed to help eliminate costly tough-to-break habits such as unhealthy eating, smoking, exercise avoidance, and chronic stress. For more information, visit selfhelpworks.com.

FINANCIAL PLANNING

What Retirement Plan Providers Say About the DOL Fiduciary Rule
Sixty-four percent of the top retirement plan record-keepers and providers say that the Dept. of Labor’s (DOL) fiduciary rule will have a positive or neutral effect on their asset retention rate over the next two years, according to a LIMRA survey. The new DOL fiduciary rule goes into effect in April 2017 and expands the fiduciary standard to anyone providing advice on defined contribution plans or individual retirement accounts. Matthew Drinkwater, Ph.D. of LIMRA said, “The rollover market is expected to exceed $400 billion in 2016. The DOL fiduciary rule affects all qualified assets and is likely to have a major impact on the rollover market, with some DC plan providers benefiting from increased in-plan retention due to a slowdown in IRA rollover activity.”

Twenty-eight percent of companies say the rule will help them increase asset retention while 36% say it will have no effect. Another 36% expect the rule to result in a minor decline in their asset retention rate. Seventy-five percent of plan providers plan to change how their call centers respond to calls related to retirement plan distribution options. Many will change procedures for calls not related to distribution options. When the final rule was published, there were questions on what actions from call center representatives would be considered participant education versus advice. Advice would trigger a fiduciary standard. Drinkwater said, “Companies recognize that the DOL fiduciary rule is very complicated and adherence will require extensive changes to business practices. Nearly three quarters of plan providers anticipate their call center staff needing training to be able to distinguish education from advice.”

Course Educates Employees About the DOL Fiduciary Rule Implications
The LIMRA/LOMA Secure Retirement Institute launched “DOL Fiduciary Basics for Employees,” a short online course that explains what the rule means to companies and their employees. New LIMRA Secure Retirement Institute research finds that almost three-quarters of retirement plan providers expect their call center staff to need training on the fiduciary rule. For more information, visit limra.com/DOL.

Most Advisors Are Using Social Media
Eighty-two percent of financial professionals use social media to market themselves and their businesses, according to a LIMRA study. Once viewed as a compliance headache, social media has quickly evolved into an essential tool to prospect and strengthen relationships with clients. For more information, visit limra.com.

Americans Want Personal Advice With Technology
Technology cannot easily replace human advice in financial planning, according to Northwestern Mutual’s 2016 Planning & Progress Study. When asked how they would prefer to get financial advice, 54% said the ideal solution combines a human relationship with technology while 33% prefer a human relationship above all else. The appetite for a fully automated (robo) solution appears low across all age groups, even for Millennials, with fewer than two in 10 opting for robo advice. Tim Schaefer of Northwestern Mutual said, “As people’s financial and personal lives become busier and more complex, they want expert guidance tailored to their needs and access anywhere at any time. Technology transforms the road map to financial security into a 24/7 financial GPS.”

The nearly 50% of respondents who had no interest in robo advice gave the following as their top reasons:

48% want a human advisor who can answer questions and discuss options.
40% don’t trust a robo advisor.
38% value the knowledge and expertise that a human advisor can provide. Interestingly, this factor was most pronounced for Millennials, suggesting that even those who rely heavily on technology value human expertise in financial planning.
50% of women are not interested in robo advice compared to 43% of men.

For more information, visit nm.com.

Americans Are Not Confident About Their Approach to Saving and Investing
Many participants in defined contribution plans are not confident in their approach to saving and investing, according to a study by J.P. Morgan Asset Management. There is a disconnect between participant intent and action. Also, a misconception about participant support for automatic features and strategies may be holding plan sponsors back from strengthening their defined contribution (DC) plans. The survey of 1,001 DC plan participants finds that most are still uncertain that they will have a financially secure retirement. More immediate financial demands interfere with their ability to save for the future; many don’t have a clear understanding of how to set a retirement savings goal; and most are not confident in their ability to make investment decisions.

Sixty-eight percent say that their 2015 contributions were less than they should have been. Eighty-one percent are interested in doing financial planning for retirement. Forty-five percent do not have a financial plan. Forty-eight percent say they don’t spend enough time planning for retirement. Twenty-eight percent have never rebalanced their 401(k) account, 31% never changed their initial choice of investment options, and 18% never increased their contribution.

Catherine Peterson of J.P. Morgan said, “Plan sponsors have an opportunity to strengthen their plans and help provide…catalysts for transforming intent to action…This can be done through automatic…strategies, such as automatic enrollment, automatic contribution escalation, and re-enrollment with a qualified default investment alternatives, such as a target date fund.” The survey also reveals the following:

74% favor automatic enrollment and automatic contribution escalation or are neutral about it.
67% favor a combination of these two features or are neutral.
90% like target date funds.
82% favor re-enrollment or are neutral.
96% of those who enrolled automatically in their plans are satisfied, and 31% would not have enrolled without automatic enrollment.
97% of those with contribution amounts that increase 1% to 2% automatically each year are satisfied; and 15% say they probably would not have escalated their contributions without the automatic feature.
73% of those who went through a re-enrollment allowed their assets to be moved to a target date fund. Also, 99% of those whose funds were moved are satisfied.

For more information, visit www.jpmorganchase.com.

LIFE INSURANCE & ANNUITIES

LIDMA Fall Meeting
The Life Insurance Direct Marketing Assn. Fall meeting is being held in Newport Beach from September 25 to September 27. LIDMA focuses on middle market consumers. For more information, visit lidma.org.

Final Expense Life Insurance Premium Grew 5% in 2015
Final expense life insurance sales increased 5%, and policy count rose 4% in 2015, based on a survey by the Life Insurers Council, CSG Actuarialget, and Competiscan. Jeffrey Shaw of LOMA said, “While some carriers have been very successful selling final expense life insurance directly to consumers, more than 80% of policies were sold through independent agents or independent marketing organizations (IMOs). Policies sold directly were most likely guaranteed issue contracts with limited initial death benefits. Those sold through IMOs tended to be simplified issue contracts with full immediate death benefits.” More carriers are expected to expand their direct distribution channel, given challenges of managing high-volume, low-premium simplified issue policies.”

Sixty percent of policies were sold to women and 40% to men. The average age of purchase was 63. There has been a gradual increase in average issue age over the past nine years (66.5 in 2012 to 66.8 in 2015). Researchers say that many companies have stopped selling to consumers 50 years old and younger, which could be contributing to the rise in average issue age.

Eighty-one percent of final expense premium sold in 2015 was through independent agents. Affiliated agents sold 18% of the final expense premium in 2015. Agents generally sell simplified issue policies with full death benefits. Ninety-one percent of the premium sold in 2015 was simplified issue. Limited death benefit policies are offered to a small segment of their prospects that do not qualify for a full death benefit due to health reasons. This contrasts with direct selling companies that focus primarily on guaranteed issue contracts, which was only 6% of the premium collected. For more information, visit loma.org

More Americans Seek Guaranteed Income in Retirement
To address inflation risks, many Americans want financial products that provide guaranteed income in retirement as well as opportunity for increasing income, according to a study by Allianz Life. Eighty percent are interested in a product that offers income for life, and 86% are interested in a product that offers guaranteed income for life plus the opportunity for income to increase over time.

Seventy-seven percent prefer a guaranteed income option that has a lower income rate, but offers the possibility of increases, over one that has a higher starting income rate with no opportunity to increase. Fifty percent say that it’s very or extremely important for a product to offer the possibility of income increases. Allianz Life vice president of Consumer Insights Katie Libbe said, “Many people depend on an annual pay raise to cover various increasing expenses, and build long-term savings. Consumers facing retirement will need to explore options that create a similar income strategy by using a portion of their portfolio to get guaranteed income for life with the chance for increases.” Annual pay increases are an important part of maintaining financial security for many Americans. In fact, 67% say they got a pay raise at least half of the time during their working years. Yet, if faced with a frozen income that offered no chance for an increase in annual salary, 53% say they would be very worried or even panicked as to how they would pay for everyday expenses.

Twenty-eight percent of those surveyed (41% of people earning less than $50,000) worry that they won’t be able to pay for basic needs, such as housing, food, and medical care. Considering the critical role of pay raises in managing rising costs, this scenario provides a glimpse into the situation of retirees who are on a fixed income. Libbe said, “Clearly, there is strong consumer appetite for guaranteed income and increasing income solutions in retirement. It’s important that these benefits are available so Americans can have more confidence in their ability to manage rising costs when pay increases are no longer an option.”

Recent research on Allianz Life annuities reveals that income benefits – built-in or through an optional rider at an additional cost – have delivered income increases to many customers. Income from Allianz Life fixed index annuities has helped address inflation. Purchasing power actually increased over time. Ninety-three percent of clients who are receiving income from these fixed index annuities got an increase. Sixty-seven percent of these clients got a payment increase every year. For more information, visit www.allianzlife.com/annuities/increasing-income-potential.