Tag Archive: United Healthcare

Insurance Commissioner Worried About United’s Departure From Individual Market – California Healthline

United has a limited presence in the state’s individual market, according to Jones, with about 8,000 people currently insured in its subsidiary PacifiCare. And, he said, Aetna also casts a relatively small shadow in the individual market, with approximately 50,000 people insured in the state.

Dave Jones mentioned a little-known detail about a tax break for other insurers that might have placed United and Aetna at a competitive disadvantage.

According to Jones, a $100 million tax break enjoyed by two other insurers, Anthem and Blue Shield, gives them a competitive break and led to the withdrawal from the individual market by United and Aetna.

via Insurance Commissioner Worried About United’s Departure From Individual Market – California Healthline.

Jones is California’s elected insurance commissioner. While not specifically detailed in the story, the “tax break” refers to a difference between what a health plan issuer pays to sell an indemnity health insurance plan regulated by the California Department of Insurance (CDI) and a managed health care service plan regulated by the state’s Department of Managed Health Care (DMHC).  California’s Constitution subjects insurance policies to a 2.35 percent premium tax, while managed care plans are assessed a $2,000 base fee plus $0.0048 per enrollee under California Health & Safety Code Section 1356(c).

One year ago, CDI revealed Blue Shield of California would have only three individual insurance plans open for enrollment after it closed nearly two dozen existing plans effective July 2012.  At the time, CDI noted Blue Shield had filed applications with DMHC to nearly double its roster of managed care plans to 20.

Given the shift toward managed care plans dominated by California’s market share leaders Kaiser Permanente, Blue Shield and Anthem Blue Cross along with the move by the state’s exchange marketplace, Covered California, to require HMO-like standardized benefit designs for plans it sells, Aetna and United likely concluded they could not economically pick up a sufficient number of new policyholders via the exchange marketplace to justify remaining in the Golden State.

 


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. 

Defined contribution employer health benefit trend advances

Last week saw developments in both the large and small group markets signifying advancement of defined contribution employer health benefits.  As the term implies, rather than selecting one or more health plans for employees and deciding on deductibles, co-pays, co-insurance and dependent coverage, under a defined contribution system an employer offers employees a fixed dollar amount to be applied toward health coverage.  Employees then “buy up” or “buy down” depending on the scope of health coverage they prefer.

The Wall Street Journal reported Sears Holdings Corp. and Darden Restaurants Inc. are adopting the scheme.  At the same time, Aon Hewitt announced the imminent rollout of its “corporate health exchange” that it says will offer a broader array of health, dental and vision benefits options than a traditional employer-sponsored plan.  According to the firm, benefits will be offered by nine national and regional carriers, including UnitedHealthcare, Cigna and Health Care Service Corporation.  According to the WSJ, Sears and Darden Restaurants will use the Aon Hewitt-administered corporate exchange, which will offer five different coverage levels.  (Public exchanges that will begin selling coverage in 2014 can also offer five coverage levels based on the actuarial plan value)

Meanwhile, in the small employer market, the Pittsburgh Post-Gazette reports United HealthCare is launching a defined contribution product in the Pittsburgh market. United’s Multi-Choice allows employers with 50 or fewer workers to select any number of plans among 30 separate options, from high-deductible to full-coverage plans.

 


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. 

Optum Health acquisition of California physician group sparks litigation

When a large vertically integrated health care insurer that also has a health utilization and wellness consulting unit takes over a physician group that has a pre-existing relationship with a payer, that payer may well feel threatened.  Enough so to motivate it to sue the physician group.

That’s what has happened following the acquisition of California-based Monarch HealthCare last year by UnitedHealth Group’s Optum Health unit.  Blue Shield of California’s breach of contract lawsuit against Monarch shows the transition from traditional payer-provider relationships to broader-based relationships aimed at reducing patient medical utilization and improving health outcomes will encounter some speed bumps along the way.

California HealthLine has the story here.

 


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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