Archive | Health Care Bill Impact on Business

ALCHEMY – CHANGING A BRONZE PLAN INTO A GOLD PLAN (ALMOST)

The question most frequently asked by my clients is how can I afford my premiums, and medical expenses at the same time?

The answer in the past has boiled down to either purchase the least expensive Bronze plan, to save money or a Gold or Platinum plan to save medical expenses.

For 2018, individual health insurance rates will be increasing, which means that new and existing clients will be financially impacted more than in past years. Clients who purchase their coverage outside of the Covered California Exchange, because they not eligible for a federal premium subsidy, must find solutions to lower their premiums and medical expenses.

There is a strategy that I recommend to my clients: enroll in lowest premium Bronze plan available, and couple the plan with additional coverage to pay for or reimburse the high deductible medical expenses associated with these plans.

• THIS STRATEGY IS ONLY EFFECTIVE IF THE COMBINED MONTHLY PREMIUMS OF THE BRONZE PLAN, AND ADDITIONAL COVERAGE ARE LOWER THAN THAT OF A GOLD PLAN.

The types of coverage that I recommend fall into two broad categories: (i) one that reimburse for any medical expenses cause by any accident and/or critical illness; (ii) a limited benefit hospital admission or indemnity plan that will reimburse for any medical expenses generated in the hospital because of an accident or illness.

THE FOLLOWING IS A PROPOSAL FOR AN EXISTING CLIENT WHO RESIDES IN WEST LOS ANGELES:

The father is 42, the mother is 38, and the two children are under 14. The family is not eligible for a subsidy, and purchases their coverage Off Exchange with Blue Shield because they want a PPO.

BLUE SHIELD PPO MONTHLY PREMIUMS, DEDUCTIBLE, MAXIMUM YEARLY FINANCIAL LIABILITY:

• Gold PPO $1,852 No deductible, $6,000 individual / $12,000 family financial liability

• Silver 70 PPO $1,490 $2,500 deductible, $7,000 / $14,000 family financial liability

• Bronze 60 PPO $1,180 $6,300 deductible, $7,000 / $14,000 family financial liability

ACCIDENT AND HOSPITAL INDEMNITY PLANS:

• Accident Only – $55 monthly premium for family. $6.750 individual or $13,500 maximum reimbursement (includes $250 deductible)

• Accident + Critical Illness – $55 monthly premium for family. $6,350 individual or $12,700 maximum reimbursement (includes $500 deductible) plus $7,500 in Critical Illness coverage (only coverage for insured and spouse)

• Hospital indemnity – $150 monthly premium for family. $5,600 per person with no deductible. Pays in addition to any other coverage.

THE TOTAL COMBINED APPROXIMATE MONTHLY PREMIUMS FOR BRONZE PPO PLUS ADDITIONAL COVERAGE IS $1,235 VERSUS $1852 FOR A STANDARD GOLD PPO.

• A POTENTIAL MONTHLY SAVING OF $617 PER MONTH OR $7400+ PER YEAR.

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ANTHEM BLUE CROSS CUTS COVERAGE IN CALIFORNIA

On Monday August 1st, Anthem Blue Cross announced that it is pulling out of the individual insurance market in California, except for three regions in Northern California: Redding, Santa Clara County, and Stockton/Modesto.

  • All other ACA individual Anthem plans will be terminated December 31,2017. This decision does not affect those who have employer based insurance or individuals enrolled in “grandfathered” plans (plans purchased before March 2010).

Anthem’s Medicare Supplement, Medicare Advantage, Part D Drug Coverage, and individual dental, vision, and life policies will be continued to be offered in California.

According to Covered California’s most recent enrollment snapshot from March, Anthem currently covers about 252,560 Obamacare customers, 61% of whom live in regions where the carrier will pull out of the market.

Those numbers do not include people who have purchased Anthem plans outside of the exchange. A Covered California spokesman said in an email that an additional 150,000 Anthem plans are estimated to be in place outside the exchange.

  • How will the termination of your Anthem policy affect your coverage?

On-Exchange plans through Covered California will be moved to another carriers’ plan offering similar coverage if the member does not take any action during the Open Enrollment period to directly change carriers and plans.

The full details of how this will work is still being formulated, and more details should be released shortly.

For those with Off-Exchange plans, you must move to another carrier offering plans in your zip code. The enrollment must take place on or before December 15th, to have a January 1st effective date.

In 2018, Blue Shield of California will be the only carrier offering both a PPO, and HMO plans throughout the state. All other carriers will only offer some form of narrow network plans such as an HMO or Exclusive Provider Organization (EPO).

  • All carriers offering On-Exchange and Off-Exchange plans are indicating double digit rate increases for 2018.

As an example, in Southern California Blue Shield has filed for rate increases of between 18% to 22% for their PPO plans and 9% for their ACO/HMO plans. Other carriers will be releasing information on rate increase during the next few weeks.

In addition to higher rates, most carriers will also narrow their provider networks by only offering HMO or EPO plans with specific provider networks. These plans will not reimburse for any out of network services; therefore, members may be required to change some or all their doctors.

California is still one of the few states where a carrier, Blue Shield of CA, still offers PPO plans. In Arizona, Nevada, and Colorado the only options for individual plans is some form of HMO/EPO.

In addition, California has at least one carrier offering individual coverage in all counties and zip codes in the state. This is not the case in in Arizona and Colorado.

If you are a current Anthem client with an Off-Exchange plan terminating December 31st, please call me (John Barrett) at 626 797-4618, and I will answer your questions.

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THESE TWO NEW OBAMACARE RULES WILL AFFECT YOUR OPEN ENROLLMENT OPTIONS FOR 2018

Your Open Enrollment for 2018, will not be impacted by any potential Congressional changes to the ACA (Obamacare). However, you need to be aware of two major changes the U.S. Department of Health & Human Services has made to the Open Enrollment process for 2018.

1. OPEN ENROLLMENT FOR 2018 HAS BEEN SHORTENED TO 45 DAYS. THE PERIOD WILL BEGIN NOVEMBER 1ST, AND END DECEMBER 15TH.

• This means if you intend to change insurance carriers or category of your plan (Bronze, Silver, etc.) you will need to make your decision during the shortened Open Enrollment period.

2. THE SECOND MAJOR CHANGE RELATES TO UNPAID HEALTH INSURANCE PREMIUMS.

Under current rules if your health insurance is cancelled by the carrier for non-payment of premium, you can re-enroll with the same carrier during Open Enrollment without consideration of any past owed premiums.

• Under the new rules an insurance company can deny coverage until all the back premiums owed have been paid before you will be able to enroll.

As an example, assume you are covered by an Anthem Silver EPO with a $400 monthly premium, and your last payment was for the month of May. However, you fail to pay your June payment, and after approximately 45 days your policy is cancelled for non-payment effective June 1st.

If you want to enroll in any Anthem plan for 2018, you will be required to pay all the back premiums owed for 2017 ($2800 – June 1st – December 31st).

This change was requested by the insurance carriers to ensure individuals would maintain coverage (and premiums) throughout the year. Carriers had complained that an insured would enroll in a policy, have a medical procedure, and drop coverage for the remainder of the year. This became an issue because policyholders could drop coverage during the year, and enroll in new coverage during Open Enrollment for the next year without regard to pre-existing conditions or any past premiums owed.

The obvious solution for someone who owes past premiums is to change to another carrier for 2018.

If you have questions, please email me at john@healthinsbrokers.com or call me at (626) 797-4618.

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ARE CHANGES COMING TO HEALTH INSURANCE IN CALIFORNIA FOR 2017 & 2018?

For those living in California, health insurance will not change dramatically for the remainder of 2017. This is especially true for those who purchase their coverage Off Exchange directly with the insurance company without a federal premium subsidy.

Regardless of what occurs in Congress the plans, rates, and mandates will remain the same for 2017. The reason is that back in July of 2013, Governor Brown signed a law that established, in effect, a mirror image of the ACA (Obamacare) mandates such as the waiver of pre-existing conditions.

Even if Congress eliminated the various mandates of the ACA, state mandates would remain in effect for 2018, unless directly overridden by Congress. California would still require the wavier of pre-existing conditions as a condition of enrollment, along with the other mandates like Community Rating (rates based upon date of birth, zip code, and age bands for older individuals).

Looking at 2018, the forecast is murkier because of the uncertainty of which insurance carriers will continue to offer plans in California, and the rates for 2018 plans. Beginning in May insurance companies will begin submitting their 2018 rates to the Department of Insurance or Department of Managed Care (HMOs).

It is difficult to come to any conclusion other than rates will continue to increase in 2018. The only question is the percentage of increase. If Congress changes the federal premium subsidy or the direct payments to insurance carriers that reduce co-payments, deductible, and out of pocket costs of Covered California purchased plans, then the rates for Off Exchange plans will disproportionally increase to make up for the loss of premium dollars to the carriers.

To understand how the ACA Mandates affected rates in California (and throughout the US), a Milliman research study determined how certain mandates affected rates. The two greatest reasons for the increased rates were Guaranteed Issue (waiver of pre-existing conditions), and Community Rating (date of birth, zip code, age bands).

Milliman estimated that Guaranteed Issue was responsible for 15% to 30% of the increase, and Community Rating 19% to 35% of the increase. Therefore, 34% to 54% of rate increases beginning in 2014 were a direct result of the combination of these two mandates.

Congress has discussed the ability to purchase health insurance across state lines as one method of bringing more competition, and hopefully lower rates. However, purchasing health insurance across state lines has not really been considered by the insurance carriers doing business in California, not to mention the Department of Insurance. During recent conference calls with research analysts, the CEO’s of Aetna and United HealthCare both dismissed the idea of buying insurance across state lines because of the issue of provider networks, and how to set the rates in each state.

Assuming California will require its state mandates to be maintained by the insurance carriers, then it is highly unlikely that there will be any meaningful reduction in rates for the foreseeable future.

*Sources include a Milliman Research Study (2017), and other direct online sources.

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DON’T LET YOUR HEALTH INSURANCE BE CANCELLED FOR NON-PAYMENT OF PREMIUM!

Open Enrollment has closed for 2017, and for those of you enrolled in individual coverage your plans are either effective or will be by March 1st.

It is vital that you understand that if your individual policy is cancelled for non-payment it will not be reinstated.

There are usually three reason for cancellations:

  1. Intentional nonpayment of premiums because of financial hardship.
  2. The inability of the carriers to debit the credit card or bank account established to pay the premiums.
  3. The failure to send in an actual check in a timely manner to the insurance company.

It’s important for those of you with Off Exchange plans (those without a Federal subsidy or on MediCal), to understand the grace periods offered by insurance companies for late payments.

  • IF YOU DO NOT GET A FEDERAL SUBSIDY, YOU HAVE 31-DAY GRACE PERIOD FOR MAKING PAYMENTS.

Your monthly premium payments are due the first of each month. If the premium payment is not received by approximately the 7th of the month, you will be mailed a late payment notice.

The grace period for payment begins the POSTMARKED DATE of the warning notice that your premium is overdue. It is not when you receive the letter, which can be anywhere from two days to a week after the actual letter’s postmark.

The letter will tell you when your grace period ends, and warns that you will lose coverage unless the full past due amount is paid before the 31-day grace period ends. After the grace period ends, the carrier has the right to cancel the policy, even if you have mailed in your premium payment.

If you receive a late notice, react immediately by contacting your insurance broker or the carrier directly. Do not wait until you discover your policy has been cancelled, by then it will be too late.

  • IF YOUR POLICY IS CANCELLED YOU WILL BE REQUIRED TO WAIT UNTIL THE 2018 OPEN ENROLLMENT PERIOD TO ENROLL IN INDIVIDUAL PERMANENT COVERAGE.
  • Your only option if your policy has been cancelled is short term medical coverage to bridge you to January 2018, or to an event such as going on group or student coverage. Short term coverage will not cover any pre-existing conditions diagnosed within the twelve months prior to enrollment.    

If you have questions, please call me at (626) 797-4618

or email john@healthinsbrokers.com

 

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Anthem Threatens Obamacare Retreat If Results Don’t Improve

According to a Bloomberg article published online, Anthem Inc., which has so far stuck with the Obamacare markets as rivals pulled back, said it may retreat in 2018 if its financial results under the program don’t improve next year.

  • If California becomes one of the states exited, those with Anthem individual policies will be affected.
  • For 2017, Anthem has already significantly raised rates, and reverted to more network Exclusive Provider Organization, (EPO) from PPOs in Southern California, and most of Central and Northern California.

“If we do not see clear evidence of an improving environment and a path towards sustainability in the marketplace, we will likely modify our strategy in 2018,” Anthem Chief Executive Officer Joseph Swedish said on a call Wednesday discussing third-quarter results. “Clearly, 2017 is a critical year as we continue to assess the long-term viability of our exchange footprint.”

Anthem expects to post a narrow profit margin next year in exchanges created under the ACA, following losses that Swedish called “disappointing.” Profitability will improve thanks to plan changes and premium increases averaging more than 20 percent, but Anthem said it will take more than that to stabilize markets that have so far drawn about half the membership it was planning for.

The company called for eliminating a tax on health insurers, as well as changes to regulations that govern how plans are sold and administered.

“Both the pricing and regulatory environment need to be improved,” Swedish said. He said the company would be “surgical” in assessing where to sell ACA plans for 2018.

Anthem sells health coverage under the Blue Cross Blue Shield brand in 14 states (including California), and has a big position in the market for plans sold directly to individuals. The Indianapolis-based company said Wednesday that it had 889,000 people signed up under individual Obamacare exchange plans, and a total of about 1.4 million members in individual plans.

Large rivals UnitedHealth Group Inc., Aetna Inc. and Humana Inc. have all retreated from many of the Obamacare exchanges. If Anthem pulls back in 2018, it would leave mostly regional and not-for-profit firms on the markets, along with the Medicaid companies Centene Corp. and Molina Healthcare Inc.

Anthem expects the overall market for ACA compliant plans — both on- and off-exchange –will shrink next year, Chief Financial Officer John Gallina said. The insurer’s membership in the individual market will fall as well, he said.

*Modified from a Bloomberg.com article, Political.com and other online sources.

 

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HIGHER PREMIUMS FOR HEALTH INSURANCE PLANS IN CALIFORNIA

Are you prepared for 2017 rate increases of your individual health insurance plans?

Obamacare premiums are set to skyrocket an average of 22% for the benchmark silver plan in 2017, per a government report released Monday. In California, the Covered California Exchange, and the Department of Insurance have reported these rate increases average around 13%.

Covered California maintains the premium increases won’t affect those who purchase their coverage through the Exchange to receive a Federal Premium Subsidy or are covered by Medi-Cal. While that may be true regarding Covered California, it is not true for millions who purchased their coverage Off Exchange directly with the insurance company.

 There are three reasons why premiums are going up so much.

  1. More sick people than anticipated enrolled. Insurers are just catching up to the fact that premiums weren’t covering their costs.
  2. The end of the reinsurance program, which was designed to make up losses incurred by insurance companies accepting very sick enrollees. That expires at the end of this year; therefore, they must raise premiums to account for the end of that program.
  3. Health care costs seem to be trending upward.

Those without a Subsidy will pay a hefty increase in their 2017 premiums.

If you live in Southern California rates will increase substantially higher than 13%.

  • In the five Southern California counties of Los Angeles, Orange, San Bernardino, Riverside, and San Diego the rate increase ranges from 18% to 37%. The average rate increase for Blue Shield is approximately 20%, while the rate increases for Anthem averages 25%, with some rates 37% higher than 2016 rates.

In addition to the rate increases, carriers have also narrowed their 2017 provider networks. For 2017, the only carrier with a full PPO throughout California will be Blue Shield. All other carriers will have a narrower provider network, such as an HMO or Exclusive Provider Organization (EPO). To control their costs Blue Shield also offers, for the first time, Silver through Platinum HMO plans.

In Southern California, Anthem changed from a PPO or Tiered PPO back to an EPO. Anthem will only keep their PPO structure in several Central and Northern counties.

As with an HMO, an EPO will not pay for any medical services out of network. Any medical expense out of network will require the insured to pay 100% of the costs with no reimbursement.

Because all carriers offering individual plans have two distinct networks individual and group, it requires the person seeking individual coverage to determine if a provider will accept a specific carrier’s individual plans.

  • In Orange and San Diego counties there is a further complication because the Anthem EPO will not have some of the top hospitals in network. As an example, in Orange County 24 hospitals have been eliminated from the network. Major hospitals such as Hoag, St Joseph, St Jude, and Mission are not in network for the EPO. In San Diego County, 11 hospitals have been eliminated, including the Scripps group of hospitals.

For 2017, even though the categories of plans remain the same (Bronze, Silver, Gold, Platinum), deductibles and co-insurance have increased making the maximum financial liability for a family with a Bronze plan as high as $14,300. Silver and Gold plans have increased their total financial liability for a family to more than $13,000. Only Platinum plans have remained the same with a maximum financial liability for a family of $8,000.

  • Open Enrollment for 2017 (November 1st – January 31st), will allow the enrollment in new coverage, changing carriers, and changing categories of plans. It is important for those who enroll in Off Exchange plans to understand that rates are higher for PPO plans than for the narrower HMO plans of the same category.

If you purchase your health insurance Off Exchange without a Subsidy you will need to make a choice between premiums vs. networks. If you desire a more liberal choice of providers, you will select a PPO with a higher premium. If a want a lower premium you will select a narrow network HMO or EPO plan. The difference in rates between a PPO and HMO/EPO for the same category of plans ranges from 15% to 20%.

If you have questions regarding 2017 Open Enrollment, call me at (626) 797-4618 or email me at john@healthinsbrokers.com

 

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California Voters Are Becoming More Concerned About Healthcare Costs

The cost of getting healthcare remains a major concern, eclipsing worries about having insurance, according to a new USC Dornsife/Los Angeles Times poll. The widespread worry about costs indicates a potential shift in the debate over healthcare.

Lawmakers increasingly have been hearing complaints from their constituents about the cost of care, and polls have found that prescription drug prices, surprise medical bills and other pocketbook issues concern voters more than the future of the health law.

Echoing that national trend, almost two-thirds of voters in the USC/Times survey say they worry “very much” about rising health costs, with only 10% saying that is not something they worry about.

Cost concerns were most widespread among those in their 50s and early 60s. Indeed, that age group consistently showed the highest levels of anxiety on a series of healthcare concerns.

  • For a significant number, the healthcare law itself takes blame for rising costs. Just over half of those surveyed said they believed that costs for average Americans have “gone up a lot” because of the law, compared with roughly one-third who said that the law had not caused that to happen.
  • Most Americans have been forced to confront increased costs for health coverage for years – a trend that began long before the passage of the reform law. Employers have continued to shift costs to their workers, mostly in the form of higher deductibles and co-payments. Although those higher costs may not have been caused by the new law, many blame it.
  • The law clearly has raised costs for one relatively small slice of Americans – mostly healthy, self-employed people with middle-class or higher incomes who were previously able to buy low-cost policies on the private market.
  • The new law requires those people to buy more comprehensive policies, which provide greater coverage, but at a higher price. Covering sicker customers who used to be denied insurance has also led insurers to raise some premiums.

Low- and middle-income Americans get subsidies under the law that lower their monthly premiums, but higher-income Americans do not.

Most California voters have a positive view of their own healthcare and a somewhat positive view of healthcare in the state, the poll found. Seven in 10 rated their own healthcare as “excellent” or “good” while just under three in 10 called their care “fair” or “poor.”

*Modified from an latimes.com article, and other online sources

 

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Obamacare Premiums Expected To Rise Sharply Amid Insurer Losses

Health insurance companies are laying the groundwork for substantial increases in ObamaCare premiums, opening up a line of attack for Republicans in a presidential election year.

Many insurers have been losing money on the ObamaCare marketplaces, in part because they set their premiums too low when the plans started in 2014. The companies are now expected to seek substantial price increases.

“There are absolutely some carriers that are going to have to come in with some pretty significant price hikes to make up for the underpricing that they did before,” said Sabrina Corlette, a professor at Georgetown University’s Center on Health Insurance Reforms, while noting that the final picture remains unclear.

Insurers are already making the case for premium increases, pointing to a pool of enrollees that is smaller, sicker and costlier than they expected.

The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage through their employers.

“The industry is clearly setting the stage for bigger premium increases in 2017,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation.

The proposals for premium increases, which will be rolled out over the next couple of months, still have to be approved by state insurance commissioners. The ultimate impact on consumers will be hard to determine, as ObamaCare’s tax credits often soften the blow.

“Companies are either going to have to raise their prices significantly or drop out,” said Sen. John Barrasso (R-Wyo.), pointing to a poll from NPR that found a quarter of the public says the health law has personally hurt them.

“UnitedHealth has announced it is pulling out of the Obamacare exchanges,” one Senator wrote in a statement. “That’s the latest in a string of Obamacare failures that have led to American families losing their doctors, having few or no insurance options, and facing skyrocketing premiums and deductibles.”

“In almost every year I remember since 2013 started, there were projections of double-digit premium [increases] that turned out not to be correct,” said Chris Jennings, a former Obama White House adviser on healthcare reform. “Now, do I believe this year may be a little bit different? I think it could be.”

About 15 percent of ObamaCare enrollees do not receive a tax credit, so they would bear the full burden of price hikes, though they, like other enrollees, can shop around for the best deal.

State regulators may be forced to approve some hefty rate increases for next year, given the need for insurers to stop losing money.

*Modified from Hill.com, IBD.com, WSJ.com articles, and other online sources.

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THE SELF EMPLOYED ALSO NEED BENEFITS

Are you one of the many individuals who has become self-employed either voluntarily or involuntarily due to the changes in today’s economy?

In the past if you voluntarily left your employer or were laid off, you would have been able to move to another company; however, because of economic changes in California, you may now be forced to become self-employed, classified as an independent contractor or “consultant” to survive financially.

In addition to the financial implications, the biggest shock is the realization that by leaving your former employer you have suddenly lost the safety net for you and your family of health insurance and related benefits previously provided by the company.

  • As a health insurance broker, a specific area of my focus is the self-employed who have left companies to work independently. My goal is to provide these individuals and their families with creative strategies to replicate, on an individual basis, the benefits once provided by their previous employers.

Over the next few weeks I will be focusing my newsletter, and my other publications, on the risks faced by the self-employed through the loss of company employee benefits. I intend to recommend specific strategies to reduce or eliminate these financial risks.

A few of the issues, and questions that I will address:

  • The risk of medical expenses caused by illness or accidents.

Health insurance policies are nothing more than financial instruments designed to mitigate medical financial risks.

Do you know how to tailor the four (Bronze, Silver, Gold, Platinum) health insurance plan categories to your specific needs?

  • The risk of large out of pocket financial requirements of health insurance policies.

Currently these amounts range from $4,000 to $6,850 for individuals, and $8,000 to $13,700 for families. In 2017 these amounts will increase to $7,150 and $14,300 respectively.

How will these amounts be paid, and by whom?

  • The risk of a direct loss of income by being unable to work for a period of time (or permanently) as the result of an illness or accident.

Health insurance only pays for the medical expenses; it is not designed to replace lost income.

What types of policies can be used to protect income, and how do insurance companies view the self-employed vs. W2 employees?

  • The risks of requiring skilled nursing, assisted living or other long term care arrangements caused by an illness or accident.

Can insurance policies be structured to pay these benefits, and still provide other benefits?

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