Monthly Archive: January 2014

Double digit premium increases for California grandfathered plans

The “trend” as it’s known in health coverage refers to the underlying cost of providing medical services to policyholders or managed care plan members, an expense that is reflected in premium rates. That trend remains in the positive double digits for two of the Golden State’s biggest health plan issuers, Anthem Blue Cross and Blue Shield of California. Even for grandfathered plans in effect prior to the 2010 enactment of the Patient Protection and Affordable Care Act that may not include the full panoply of benefits and deductible limits required by the ACA. The Los Angeles Times reports Anthem Blue Cross will increase premiums for these plans effective April 1, 2014 by an average of 16 percent and as much as 25 percent for some plans. Blue Shield of California is upping premiums for grandfathered plans by an average of 10 percent, according to The Times.

If the trend is in the positive double digits even for grandfathered plans that are less generous than ACA-compliant plans, it could be even higher among richer ACA-compliant plans that must provide a broader scope of essential health benefits and more limited deductibles. That will put to the test the buy side market power of California’s health benefit exchange marketplace, Covered California, to exert downward pressure on premiums as it prepares this year to negotiate rates with health plan issuers looking to offer plans through the exchange in 2015. Covered California’s negotiating clout in those negotiations will turn on how many individuals it enrolls in 2014 plans during the initial open enrollment period that ends March 31, 2014. Rates negotiated by the exchange will also affect some plans sold outside the exchange marketplace. Health plan issuers participating in the exchange marketplace must market their exchange plans outside the exchange at the same premium rate.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Health overhaul law gets tricky when kids might be eligible for Medicaid but parents are not | Star Tribune

Health overhaul law gets tricky when kids might be eligible for Medicaid but parents are not | Star Tribune.

Yet another “family glitch” to further complicate the fraught rollout of the new individual health insurance market and another candidate for the Patient Protection and Affordable Care Act punch list.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

California exchange retains former state budget chief as financial sustainability advisor

California’s health benefit exchange marketplace, Covered California, has retained the former head of the state’s Department of Finance to provide counsel relative to financial sustainability, budgeting and evaluation analytics, the exchange announced. Ana J. Matosantos served as the Golden State’s top budget official from 2009 to 2013 under the administrations of Arnold Schwarzenegger and Jerry Brown. Matosantos was given a six-month contract and will be paid $120,000 for her services. The appointment of Matosantos comes as the exchange prepares to transition starting in 2015 from federal grant support to an operating budget fully based on revenues from fees assessed on health plan issuers offering qualified health plans (QHPs) through the exchange.

In July of 2013, the California State Auditor deemed Covered California a “high risk” state entity due to uncertainty associated with projected enrollment in exchange QHPs and the associated impact on fee revenues. The State Auditor’s report concluded Covered California “appears to have engaged in a thoughtful planning process to ensure that it will remain solvent in the future,” adding that its “financial sustainability will continue to be an area of risk that will need to be closely monitored.” Last week, Covered California announced robust enrollment in QHPs during the last quarter of 2013 — the first half of the 6-month-long plan year 2014 initial open enrollment period — reporting slightly more than 500,000 Californians enrolled in QHPs during the quarter.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

New Mexico exchange to apply stringent project management standards to launch of 2015 individual marketplace

Following pervasive IT and project management failures dogging the rollout of the health benefit exchange marketplace, the New Mexico Health Insurance Exchange is acting to limit that risk with when it begins offering individual plans for plan year 2015 enrollment starting in October.

The exchange will employ standardized project management principles including quality control and risk management oversight of its IT and project management vendors. The goal is to ensure the exchange is on track to meet federal requirements to operate as a state-based exchange and prepared to enroll individuals in qualified health plans by October 1, 2014. The exchange has issued a Request for Proposals (RFP) for independent verification and validation services that can be viewed here.

The New Mexico exchange opted to wait a year before operating an individual marketplace, defaulting to the federal government for plan year 2014 while operating its own small business marketplace.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Explaining Health Care Reform: Risk Adjustment, Reinsurance, and Risk Corridors | The Henry J. Kaiser Family Foundation

Explaining Health Care Reform: Risk Adjustment, Reinsurance, and Risk Corridors | The Henry J. Kaiser Family Foundation

The Kaiser Family Foundation produced this excellent primer on the Patient Protection and Affordable Care Act’s Premium Stabilization Programs. Working together, these mechanisms are intended to smooth the transition for health plan issuers subject to the Affordable Care Act’s new marketplace rules that took effect this year.

The individual market has temporary shock absorbers for plan years 2014-16 while both individual and small group plans benefit from an ongoing risk adjustment mechanism designed to level the risk burden among plan issuers to ensure they don’t take on more or less than their share of higher cost insureds.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Wellness programs should build “culture of health”

It’s unsurprising a study of PepsiCo’s wellness program published this month in the journal Health Affairs found the program’s efforts to help employees adopt healthy lifestyles didn’t achieve savings on a par with participants using the program to help them manage disease. Since the study measured healthcare utilization costs, naturally those employees not using the program to manage costly, chronic conditions were likely to be incurring lower health care costs in the first instance, thus producing less opportunity for savings. For these employees, the goal should be to avoid the occurrence of chronic conditions in the first place – a factor not within the scope of the study.

Commenting on the study in The New York Times, Helen Darling, president of the National Business Group on Health, pointed to potential longer term savings if wellness programs can foster a culture of health. “It sends a message that this company cares about people,” Darling told The Times. “It will attract people who want to work for a company that demonstrates a culture of health.”

That culture of health, however, is absent from many information-based organizations that still conform to an outmoded Industrial Age management model that requires much of the day be wasted on commuting in order to be physically present sitting in an office cube farm – hardly a health promoting environment. That lack of schedule control makes it more difficult for many to devote sufficient time to health promoting behaviors including sufficient exercise, sleep and healthy diet. Click here for more on this point.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Maryland mulls high risk pool fallback for individuals with exchange enrollment problems

Maryland Health Exchange Emergency Bill to be Submitted Next Week « CBS DC.

The proposed legislation would enable individuals seeking coverage through the Maryland’s health benefit exchange but whose enrollments encountered processing glitches to obtain coverage through the state’s high risk pool. According to the story, the coverage would be retroactive to January 1, 2014, when state high risk pools were to end operations under new Patient Protection and Affordable Care Act market rules barring medical underwriting for individual health plans effective that date or later.

Several other states operating their own health benefit exchanges that experienced severe problems with the launch of their web portals face a similar predicament as Maryland including Hawaii, Oregon, Minnesota, Vermont and Massachusetts.

The account also quotes Maryland Gov. Martin O’Malley as stating Maryland is considering the possibility of switching from a state-based to federal exchange either completely or in part, as well as partnering with other states.

Section 1311(f) of the Affordable Care Act authorizes the operation of “Regional or Other Interstate Exchanges” operating in more than one state, subject to the approval of the involved states and the federal Department of Health and Human Services.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

“Family glitch” spotlights crack in employer-sponsored coverage

A foundational principle of the Patient Protection and Affordable Care Act is to preserve the private insurance market and the means by which most Americans access it – through employer-sponsored health plans. But employment-based coverage isn’t what it used to be. Responding to rising premiums and the general sharp upward trend in health care costs over the last decade or so, employers have shifted a growing share of premiums and out of pocket costs to employees. Some, particularly smaller employers, have opted not to sponsor coverage for an employee’s dependents or only do so provided the employee pays a surcharge to cover spouses and children. According to a report (.pdf) issued in April 2013 by the State Health Access Data Assistance Center and the Robert Wood Johnson Foundation, individuals enrolled as dependents in employer-sponsored health plans declined from 35.4 percent in 1999/2000 to 30.6 percent in 2010/2011.

While the Affordable Care Act assumes most Americans will continue to obtain health coverage through employment, the declining employer sponsorship of dependent coverage has created coverage gap the law does not address known as the “family glitch” or “kid glitch.” For employees, the Affordable Care Act allows them to purchase subsidized coverage in the health benefit exchange marketplace if they would have to budget more than 9.5 percent of their income toward their share of the premium. If an employee is offered coverage below that limit but cannot afford to pay an additional surcharge to cover his or her dependents, those dependents cannot obtain subsidized individual coverage in the state benefit exchange marketplace because the employee is offered what the law deems as affordable coverage. The dependent surcharges don’t count toward the affordability test.

As 2014 unfolds and people continue to attempt to enroll in coverage in the exchange marketplace, there will likely be more media accounts reporting on families such as this one in Oregon that fall into the “family glitch” coverage gap.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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