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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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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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Penalties For Not Having Insurance Have Failed, And The Result Is Higher 2017 Premiums For Everyone

The most controversial part of Obamacare — the mandate that people buy health insurance — is also the glue that was supposed to make the whole scheme work.

An article appearing on lifezette.com, and other information provided by the Wall Street Journal details the mounting evidence that indicates the mandate is failing. The failure of the mandate is causing insurance companies to raise their premiums substantially for 2017.

Congress got insurance companies to go along with the Affordable Care Act in 2010 by striking a grand bargain — private insurers would accept new rules and restrictions in exchange for millions of new customers, many low-cost healthy people who would not break the bank.

The government offered subsidies to help lower-income Americans afford the premiums and threatened to fine people if they did not comply.

But the stick was not enough, and critics contend that the Obama administration weakened it further by wielding it with less-than-enthusiastic vigor.

“Nobody really wants to enforce it … Enforcing the individual mandate is going to hurt politically,” said a health policy counsel for the American Action Forum.

“The size of the penalty is not enough for someone who’s relatively healthy to think it’s worth it for them to pay for insurance,” said a senior research fellow at George Mason University. “Congress took all of the IRS’ enforcement tools away”.

  • Although Congress authorized penalties for failure to purchase health insurance, it limited the ability of the IRS to enforce it. The agency cannot sue, file criminal charges, or place liens on bank accounts to collect. It can send a warning letter or withhold money from tax refunds — if the taxpayer is owed a refund.

The government could crack down. “But aggressive enforcement could backfire politically”, said a senior policy analyst at The Heritage Foundation. “In order to enforce this, it would be pretty ugly”.

  • The analyst said it is not just the stick of enforcement that has proved inadequate — it’s also the carrot of insurance. He said it has been difficult to persuade young and healthy people “to pay for something they might not want or need … A lot of people value holding onto their own money and eating the mandate.”

The result is much lower sign-up rates than experts initially forecast. The Congressional Budget Office forecast 21 million enrollees by 2016. The Urban Institute projected 23.1 million. The Centers for Medicare and Medicaid Services guessed 24.8 million. And the Rand Corp. estimated 27 million.

The actual number was about 12.7 million. With attrition that occurs throughout the year, the number by the end of 2016 is likely to be 10 million to 10.5 million. The people who find the health plans most attractive are those who receive subsidies that cover most of the cost and those who use a lot of medical services.

  • The Urban Institute report from January 2015 projected that 36 percent of enrollees this year would have household incomes below 200% of the federal poverty line, and therefore be eligible for a subsidy. The actual percentage was 66%.

But while the Urban Institute projected that a 25% of enrollees would have incomes above 400% of the poverty line and thus be ineligible for subsidies, the actual share is just 2%. As one analyst said, “If you have a really expensive medical condition, Obamacare made insurance a good deal for you,”. “If people spend their own money, they don’t value the product.” “We know that insurers have enrolled a much more expensive pool than they expected,”. “We know that because they’ve had huge losses.”

To make up the difference, insurance companies have increased premiums. Preliminary research indicates that the average increase was 15% to 16.5% between 2015 and 2016, and that the increase for 2017 will be “much worse.”

*Modified from a lifezette.com article, WSJ.com articles, and other data provided by various online sources.

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

 

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California Obamacare Rates To Rise 13% In 2017, More Than Three Times The Increase Of Last Two Years

Premiums for Californians’ Obamacare health coverage will rise by an average of 13.2% next year — more than three times the increase of the last two years and a jump that is bound to raise debate in an election year.

The big hikes come after two years in which California officials had boasted that the program helped insure thousands of people in the state while keeping costs moderately in check.

On Tuesday, officials blamed next year’s premium hikes in the program that insures 1.4 million Californians on rising costs of medical care, including expensive specialty drugs and the end of a mechanism that held down rates for the first three years of Obamacare.

Two of the state’s biggest insurers — Blue Shield of California and Anthem Inc. — asked for the biggest hikes.  Blue Shield’s premiums jumped by an average of more than 19%, according to officials, and Anthem’s rates rose by more than 16%.

  • The rates vary significantly by region and insurer. Los Angeles and the rest of southwest Los Angeles County will see an average increase of almost 14%.

Blue Shield’s preferred provider organization rate in Los Angeles, chosen by 21% of those using the exchange, is increasing by an average of 19.5%.

Blue Shield, in an email to brokers, stated three reasons for the increase:

  • Underpricing of 2016 Rates: 2016 pricing was completed in the first quarter of 2015 and relied heavily on the favorable 2014 healthcare expense experience to set rates.
  • Higher than Anticipated Member Utilization of Healthcare Benefits: According to data, the higher trend was driven by prescription drugs and by members who joined during the special enrollment period. The SEP population had up to 30% higher utilization than members who joined during the standard open enrollment period.
  • Removal of ACA Reinsurance: The reinsurance program had provided funds to plans with higher-cost enrollees to offset those medical costs and guarantee coverage regardless of health status. The end of this program alone added 4.6% to our 2017 rates.

An Anthem spokesman stated “Factors such as increased use of medical services and added costs of drugs and medical therapies put upward pressure on rates and underscore the additional work that needs to be done to moderate the growth in healthcare costs.”

Covered California officials defended the system Tuesday, saying that the competition between insurers offering coverage on the exchange was working to keep rates lower than they otherwise would be.

Around the country, several insurers, including giant UnitedHealth, have stopped selling health plans on the exchanges, and a number of new nonprofit health insurance coops have gone out of business.

Americans who make too much to qualify for subsidies are likely to feel the brunt of the premium hikes. That may increase pressure to review the exchanges in 2017, for ways to make health plans more affordable.

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

*Modified from LATimes.com and Hotair.com online articles; Blue Shield notification to brokers.

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2016 OPEN ENROLLMENT FOR INDIVIDUAL HEALTH INSURANCE

Open Enrollment for 2016 individual plans will begin on Monday November 1st, and continue until January 31, 2016. During this period of time, you will be able to change insurance carriers and your individual plan category (Bronze, Silver, Gold, Platinum).

All carriers have made minor changes to their individual plans based upon Obamacare mandates. There are low or moderate increases in premiums for plans offered through the Covered California State Exchange (for those who need a federal premium assistance subsidy), and for Off Exchange plans for those that do not qualify for the subsidy.

Based upon review of next year’s plans, only Anthem Blue Cross and Blue Shield of California will have PPOs available in every county in California. Both carriers have increased for 2016 the number of providers that make up their individual plan provider networks. In addition, both carrier’s individual plans will have access to the full Blue Cross / Blue Shield nationwide provider network.

Anthem and Blue Shield have added new Bronze and Silver plans available for Off Exchange enrollment. These plans have unique features, and lower non subsidized premiums than On Exchange (Covered CA) plans.

If you choose Covered California in order to obtain a federal premium assistance subsidy, you need to begin the enrollment process immediately, because of the paperwork required to prove your anticipated 2016 income level.

For Off Exchange enrollment, you have adequate time to review options. Your application must be submitted by December 15th to have a January effective date.

If you have questions regarding Off Exchange plans and enrollment, please call me at (626) 797-4618 or email me at john@healthinsbrokers.com.

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75% of Obamacare plans in California use narrow networks, study shows

A new study finds that 75% of California’s Obamacare health plans have narrow physician networks — more limited choices than all but three other states. The report examines health plans sold to consumers last year under the Affordable Care Act and shows wide variation in the prevalence of narrow networks across the country.

To hold down premiums under the health law, big insurers such as Anthem Inc. and Blue Shield of California cut the number of doctors and hospitals available to patients.

Consumers often have the ability to search for specific doctors before picking out a policy. But that information doesn’t tell a consumer how restricted an overall network may be for primary-care doctors or specialists.

Covered California, the state’s insurance marketplace, and its participating health plans have said networks have been expanding since the initial rollout in January 2014 to ensure patients’ needs are met. But 18% of exchange policyholders surveyed said a medical provider would not accept them as a new patient.

State and federal regulators have been grappling with how to respond to consumer complaints about skinnier networks and inaccurate information in provider directories. It took considerable time and effort to clean up insurance company provider lists before any analysis could be done.

Better data on exchange networks is essential so regulators can ensure patients have sufficient access to doctors and consumers can determine whether a lower-priced narrow network policy is a good deal.

“Network composition is a major way in which insurance companies can attempt to control costs in the marketplace, and for consumers there is often a tradeoff between access and price,” said the director of health coverage issues at the Robert Wood Johnson Foundation.

Health researchers also mapped how narrow networks vary within states with the prevalence far higher, for instance, in several areas of Southern California.

It also differs by plan type. More than 90% of California’s HMO networks for individual coverage were narrow, compared to a third of PPO plans in the state.

*Modified from a LA Times.com article, Covered California, and other online sources.

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

A disturbing trend has begun to occur for those individuals who enrolled in coverage Off Exchange directly with the insurance carriers – A spike in the rise of cancellations for non-payment of premiums.

There are three reason for cancellations: (i) intentional nonpayment of premiums because of financial hardship; (ii) the inability of the carriers to debit the credit card or bank account established to pay the premiums; (iii) failure to send in an actual check in a timely manner to the insurance company.

It’s important for those with Off Exchange plans, the majority of those in California enrolled in individual plans (those without a Federal subsidy or Medi-Cal), to understand the grace periods offered by the carriers for late payments.

  • Insured’s who DO NOT get a Federal subsidy of their premium have a 31 day grace period for making payments.

I have had a number of calls from both clients and others regarding the cancellation of their policies. The majority have been told by the insurance carrier they may not reinstate their policy, and will be uninsured until January 1, 2016.

Therefore, it is important to understand that monthly premium payments are due the first of each month. If the premium payment is not received by approximately the 7th of the month a late payment notice will be mailed to the member.

The grace period for payment begins the postmarked date the carrier mails the first warning notice that the member’s premium is overdue. It is not when member receives the letter, which can be anywhere from two days to a week after the actual letter’s postmark.

The letter will tell when the grace period ends, and warns that the member 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 the member has sent in their premium payment.

An example of the process:

  • Payment is due on first of the month, but if a payment is not received by the end of seven days, a late payment letter will be generated and mailed to the member.
  • The member will receive the letter approximately the second week of the month. The 31 day period begins on the day the letter is mailed (postmarked).
  • If the member pays the premium by the last day of the month, no action will be taken by the carrier.
  • The member may reinstate if full payment is made within the 31 day grace period. However, if payment is not received by the last day of the grace period the policy will be cancelled, and cannot be reinstated.
  • If the policy is cancelled the member will need to wait until the next Open Enrollment period, which begins in November for a January 1st effective date.

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.

There are options available if your policy is cancelled to provide you with short term coverage to bridge you to January 2016. However, short term coverage is month to month for up to six months, and is basically catastrophic coverage for inpatient or ER/Urgent care medical services.

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

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Health Insurers Seek Hefty Rate Boosts

Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact.

One state, New Mexico is asking for an average jump of 51.6% in premiums for 2016. Insurance carriers in several states have proposed 36.3%, 30.4%, and 25% rate increases. In dozens of other larger states carriers have applied for increases averaging 10%.

  • Insurers in California have not announced the percentage increase in their rates; however they have begun the process of filing their rates with state insurance regulators.

All insurance carriers cite high medical costs incurred by people newly enrolled under the Affordable Care Act.

Under that law, insurers file proposed rates to their local regulator and, in most cases, to the federal government. Some states have begun making the filings public, as they prepare to review the requests in coming weeks.

  • Insurers say their proposed rates reflect the revenue they need to pay claims, now that they have had time to analyze their experience with the law’s requirement that they offer the same rates to everyone—regardless of medical history.

Health-cost growth has slowed to historic lows in recent years, a fact consumer groups are expected to bring up during rate-review debates. Insurers say they face significant pent-up demand for health care from the newly enrolled, including for expensive drugs.

  • “This year, health plans have a full year of claims data to understand the health needs showing enrollees are generally older and often managing multiple chronic conditions,” said a spokeswoman for America’s Health Insurance Plans, an industry group. “Premiums reflect the rising cost of providing care to individuals and families, and the explosion in prescription and specialty drug prices is a significant factor.”

The federal government subsidizes premiums for some consumers, based on income, and the validity of those subsidies in most of the country is the subject of a lawsuit the Supreme Court is expected to decide in late June.

  • The filings from insurers are based on the assumption that those subsidies remain in place.

Obama administration officials weathered a storm as some younger, healthier consumers saw their premiums jump when the law rolled out, but were also able to point to modest premiums overall as insurers focused on other ways to keep costs down, such as narrow provider networks.

For 2015 insurance plans, when insurers had only a little information about the health of their new customers, big insurers tended to make increases of less than 10%, while smaller insurers tried offering lower rates to build market share.

Modified from a WSJ.com article

 

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