Anthem Blue Cross California rate hike for grandfathered individual plans points up adverse selection risk

In the Anthem case, these are “grandfathered” policies purchased prior to the 2010 federal health law being enacted. They don’t comply fully with the Affordable Care Act, but consumers can hold on to them as long as they don’t make major changes in deductibles or other benefits.

Jones said Anthem’s practice of imposing hefty increases year after year suggests that the company wants to push these customers into newer policies “with narrower networks and potentially less access to medical providers.”

The insurer attributed the rising premiums to an aging customer pool “because new younger, healthier members are not able to sign up for grandfathered plans.”

via Anthem rate hike excessive for 170,000, regulator says – LA Times.

 

The last sentence tells much of the story from Anthem’s perspective. Grandfathered plans — those that were in place when the Patient Protection and Affordable Care Act was signed into law in March 2010 — are separately pooled and not part of the single statewide risk pool put in place under the Affordable Care Act’s reforms of the individual and small group health insurance markets. They are also known as non-ACA compliant plans.

Since younger adults who are entering the reformed individual market aren’t being included in the grandfathered plans, their lower expected medical utilization can’t aid in the spread of risk for grandfathered plans and potentially subjects those plans to adverse selection risk. As the Los Angeles Times article reports, California’s insurance commissioner has a different perspective on the rate increase.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

California health benefit exchange rebrands SHOP, possibly setting stage for merger of individual and small group exchanges

California could be setting the stage to merge its individual and small business health benefit exchanges by moving to rebrand its Small Business Health Options Program (SHOP) under the brand name of its individual exchange, Covered California. It will be dubbed Covered California for Small Business, according to this report by the Sacramento Business Journal.

State health benefit exchange SHOPs serve small employers — currently those employing 50 or fewer employees and those with 100 or less starting for plan years beginning in 2016.

Section 1311(b)(2) of the Patient Protection and Affordable Care Act gives states the option to merge their individual and SHOP exchanges. States may also merge their individual and small group markets under Section 1312(c)(3) of the law “if the State determines appropriate.” California law establishing the state’s exchange mandates it report to the Legislature by December 1, 2018, on whether to exercise that option taking into account the potential impact on premium rates paid by individuals and small employers in a merged market as compared to keeping the markets separate.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Vermont mulls working with nearby states on health benefit exchange enrollment, call center

Lt. Gov. Phil Scott, senators explore alternative to Vermont Health Exchange – VTDigger.

The VTDigger reports Vermont officials are considering partnering with adjacent states or sharing vendor resources for its health benefit exchange eligibility and enrollment and call center functions as an alternative to partnering with the federal government to support its state-based exchange as have Oregon, Nevada and New Mexico.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

2015 crucial year for future of state health benefit exchanges

This year will prove a crucial one for the future of state health benefit exchanges. Under the Patient Protection and Affordable Care Act, the exchanges are mandated in all states for three years: 2014 through 2016. After that, the states can petition the U.S. Department of Health and Human Services for waivers to set up their own state plans provided the plans conform to the law’s requirements for scope of benefits and access and affordability for individuals and small employers.

How two issues will play out in 2015 will determine how the health benefit exchange marketplace will shape up later this year and during its final mandatory year of operation next year.

The first issue is the widely covered case (King v. Burwell) awaiting a ruling from the U.S. Supreme Court on whether the Obama administration’s regulations on advance tax credit premium subsidies comply with the Affordable Care Act and specifically whether the subsidies are available in states that did not establish an exchange via state action. There’s an outside chance the high court could rule the subsidies cannot be offered in those state exchanges, which many observers conclude could be so disruptive that it could call into question the future viability of the exchanges in those three dozen states.

Secondly, half of the states that did establish an exchange through state action – known as state-based exchanges or SBEs– face significant questions as to the sustainability of their SBEs relative to their financial and/or information technology implementation capacity. These include SBEs in Colorado, Washington, Hawaii, Minnesota, New Hampshire, Rhode Island and Vermont.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

New eBook: Greater adoption of information and communications technology for knowledge work supports healthier lifestyles

As I’ve noted on this blog in the past, a major factor driving the health insurance crisis is preventable chronic conditions that can be avoided with greater individual investment in health promoting activities such as getting sufficient amounts of exercise and sleep and eating a healthful diet.

The commute-to-sit-in-an-office-or-cubicle lifestyle, where most waking hours are spent sitting, tends to work against this. It is linked to poor health and well-being because of the lack of time for meaningful daily exercise. Toss in too little sleep and frequent consumption of fast food and takeout meals during the workday and after work and we have the ingredients of the unhealthful lifestyle of all too many office workers.

Maintaining good health is the number one responsibility they owe themselves, their families and their organizations and clients. But ultimately, this is an individual responsibility and not that of their employers, health insurance plans, or healthcare providers. Organizations must afford knowledge workers the maximum ability to exercise—literally—responsible lifestyle choices to honor that obligation. In turn, employers will reap reduced healthcare costs, lower employee turnover, and improved staff attraction and retention.

Fortunately, broader adoption of today’s communications and information technology can free up the time office workers need to more fully invest in healthful lifestyles. Now nearly any setting can function as an office provided people can concentrate on their work, collaborate with colleagues and be productive.

My new eBook, Last Rush Hour: The Decentralization of Knowledge Work in the Twenty-First Century, describes the forces driving this trend and how it will benefit individuals and organizations and ultimately how it will impact where people choose to live and work.

The book is thoroughly researched, containing nearly 100 reference citations. Last Rush Hour is available through all major online book retailers including Amazon, iBooks, Barnes & Noble and other online eBook retailers.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Arkansas exploring creating alternative state health plan

Arkansas, which pioneered the so-called “private option” to use expanded federal Medicaid funding under the Patient Protection and Affordable Care Act to subsidize commercial insurance plans sold on the state’s health benefit exchange, is also out front among states when it comes to preparing to potentially exercise an Affordable Care Act option to opt out of key requirements of the law starting in 2017 and set up its own plan to provide health coverage to low and moderate income households.

The Arkansas Health Reform Legislative Task Force created by Act 46  signed last month by Gov. Asa Hutchinson will work on developing an alternative health care coverage model by the end of this year, replacing the private option as of Jan. 1, 2017.

“Notwithstanding any other rule, regulation, or law to the contrary, the Department of Human Services may submit and apply for any federal waivers or authority necessary to transform the Arkansas Medicaid Program into a program with maximum state flexibility in the use of the funds for innovative and cost-effective solutions for the provision of healthcare services,” Act 46 states. Among the options to be studied is obtaining a federal block grant to fund the alternative program.

Section 1332 of the Affordable Care Act titled Waiver for State Innovation allows states to petition the U.S. Department of Health and Human Services for a waiver to opt out of key ACA requirements beginning in 2017 including the state health benefit exchange, premium tax credit subsidies and cost sharing reductions for plans sold on the exchange as well as the individual and employer “shared responsibility” mandates. States receiving a Section 1332 waiver would be eligible for “pass through” funding operating like an annual block grant. The funding would cumulatively represent what state residents would otherwise be eligible to receive under ACA rules for premium tax credits, cost-sharing reductions and small business tax credits if they are ineligible for them under the state programs.

The Section 1332 waiver comes with some provisos. States opting out of the ACA rules would have to demonstrate their programs would ensure individual and small group plans offer coverage at least on a par with plans providing the 10 essential benefits prescribed by the ACA. State programs would also have to cover a comparable number of residents as well as ensure individuals and small employers have access to coverage with affordable premiums and protections against “excessive” out-of-pocket costs.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Business groups, broker association urge 2-year delay in expansion of small group market starting in 2016

Seventeen business groups and the National Association of Health Underwriters have requested the U.S. Department of Health and Human Services delay implementation of a Patient Protection and Affordable Care Act provision requiring states to expand the small group health insurance market starting next year.

Section 1304(b)(2) of the law defines the small group market as employers who employed at least 1 but not more than 100 employees on business days in the previous calendar year. Section 1304(b)(3) allows states to temporarily define the small group market as 50 or fewer employees for plan years starting before January 1, 2016.

In a February 18, 2015 letter to HHS Secretary Sylvia Burwell, the signatories urge extending that date to January 1, 2018. Doing so would allow organizations employing 51 to 100 employees to continue to purchase company rated coverage not compliant with Affordable Care Act requirements for small group coverage including modified community-based rating based on a single statewide risk pool, specified essential health benefits and standards for minimum actuarial value and affordability for participating employees. They warn broadening the scope of the small group market will lead to market disruption among health insurers that could limit employer coverage options as well as potentially lead to premium increases. The signatories cite an Oliver Wyman study finding that two thirds of employers affected by the expansion would see premiums rise by an average of 18 percent in 2016. That could lead some employers to choose to self-insure, reducing the size of the risk pool and putting additional upward pressure on premiums, they contend. The implication is employers with 50 or fewer workers tend to employ less healthy staff with higher medical utilization than firms with 51 to 100 employees, degrading the quality of the risk pool if all employers of 100 or fewer employees were forced to jointly pool their risk.

In an issue brief examining the effect of the expansion of the small group market, the American Academy of Actuaries concluded premiums could increase for some employers – such as those employing relatively younger, healthier workforces – and conversely decline for those with less healthy staff members. The brief noted that since there are more than twice as many covered employees in the 1-50 employee group size cohort than in the 51-100 category, the impact on premium rates would be moderated.

John Arensmeyer, founder and CEO of Small Business Majority, opposes the requested delay that would continue to segment off the smallest employers given no states have opted thus far to define their small group markets as employers with up to 100 employees. Businesses with fewer than 50 employees would benefit from the increased spread of risk of more covered lives by having larger employers in the small group market, Arensmeyer wrote in a March 5, 2015 blog post. “The entire pool becomes bigger,” he observed.

That larger pool, Arensmeyer wrote, would help boost the struggling Small Business Health Options Program (SHOP) of the state health benefit exchange marketplace and benefit brokers. “We’ll also see more broker involvement in SHOP as firms of this size are more likely to utilize the help of agents,” Arensmeyer added.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Health benefit exchanges post modest premium increases in 2015; ability of narrow networks to continue to moderate premiums uncertain

A review of plan year 2015 premium rates by the Robert Wood Johnson Foundation and the Urban Institute found premiums in state health benefit exchange marketplaces increased by 2.9 percent over 2014 plans. The report cautions continued overall modest premium rate growth is dependent on market forces in the provider and patient segments. On the provider side, health plan issuers have been able to get fewer providers to care for larger patient panels for lower reimbursement rates.

[W]hether these arrangements are sustainable and remain attractive to consumers over time is unknown,” the report concludes. “If consumers prefer broader networks and are willing to pay for them, the market will respond by offering such products, and premiums will consequently increase.”

Most observers, however, believe keeping premiums as low as possible – particularly in a mostly subsidized market like the exchanges – will trump other consumer desires, including wider provider networks. But as the report notes, the sustainability of the narrow provider network model is under pressure from patients who complain to regulators and public policymakers when they have problems finding a provider who will accept their coverage. That in turn could generate legislation and regulations making it harder for plans to rely on narrow networks to moderate premium rates. “States and the federal government could also engage in greater regulation of network adequacy; this, too, could cause premiums to increase,” the report notes.

In addition, the report cautions if underlying health care costs begin to grow at historical rates versus lower rates seen in recent years, “it will be hard for insurers to avoid reflecting this in their premiums.”

Click here for the full report.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Policy tension over restricted exchange open enrollment emerges in California

A primary element of the Patient Protection and Affordable Care Act’s reforms of the individual health insurance market is the elimination of medical underwriting and requiring health insurers to accept all applicants for coverage regardless of their medical history and condition, including pregnancy.

For plans sold on the state health benefit exchange marketplace, Section 1311(c)(6) of the law requires the federal government to determine limited to annual open enrollment periods such as those used in large employer group health plans. In addition, Section 2702(b) of the Public Health Safety Act allows health plan issuers selling plans outside the exchange marketplace to restrict enrollment to open or special enrollment periods. Individuals and families can enroll outside these periods only if, for example, they move to another state, lose employer-sponsored coverage or change their family status. Changes in health status are not excepted.

A request this week by California’s U.S. senators, Dianne Feinstein and Barbara Boxer urging their state’s health benefit exchange, Covered California, to add pregnancy to the list of exceptions to the open enrollment timeframe reflects an emerging policy tension point in the implementation of the Affordable Care Act’s individual market reforms.

Nicole Evans of the California Association of Health Plans cautioned “[i]f we start to provide exceptions for people to wait to get coverage until they have a need, you could be undermining the goals of the Affordable Care Act.”

The rationale for restricting enrollment to specified periods of the year is to deter opportunistic enrollment by those who might purchase coverage only when they have a health crisis requiring costly medical treatment and allowing it to lapse once their course of care is completed. Supporters of this policy might argue that allowing enrollment at any time (such as permitted for small group insurance and Medicaid) would convert an insurance product sold in the private market into something more like a government mandated (and subsidized for those who qualify) benefit.

A contrary view is expressed by Anthony Wright, executive director of the consumer nonprofit Health Access California. Wright suggests ending specified open enrollment periods would bring more generally healthy people into coverage offsetting any potential adverse selection, noting those in poor health have the greatest motivation to obtain coverage and are likely already in the risk pool. Wright’s position is reinforced by analysis of 2014 plan year enrollment indicating that those with costly, chronic medical conditions and who might have been denied coverage in the past were among the first to sign up for coverage.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Higher than expected Medicaid enrollment strains IT infrastructure, finances of Colorado health benefit exchange

Medicaid patients enrolling through the state health insurance exchange are taking too much of its resources, exchange board members said Monday, but state officials propose an even tighter partnership with a single technology vendor.

The federal policy of “no wrong door” was meant to be a single online portal for the uninsured that would seamlessly determine their eligibility for either Medicaid or private insurance with tax subsidies they purchased on the exchange.

But system and user errors have created problems for thousands of Colorado customers seeking financial assistance under the Affordable Care Act.

via Colorado health insurance exchange officials clash over Medicaid role – The Denver Post.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

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