April 1, 2013
The national conversation on exchanges has reached a new milestone this year – It just got real for a lot of employers.
And while the news is focused on public exchanges and whether employers will drop coverage, inside companies there are a lot of open-ended questions, starting with,
The answers employers are looking for are different than what consumers need. Employers have to get under the hood and kick the tires. They can’t afford to find out down the road that their employees and businesses have a need that their exchange is not equipped to deal with.
For most large, high-performing employers who provide health benefits today, the exchange option does not mean letting their employees seek coverage solo on the public exchanges. It involves moving to a new model of managing health benefits – one where employees take a more active role for themselves and one where the employer’s role is also evolving.
When employers interact with exchanges, they need everything consumers need – and a lot more:
- A proven, end-to-end technology foundation - There’s a lot of new code being written right now. Most large, sophisticated employers do not want their employees to be quality assurance testers for a new system. An exchange with a history of sound technology and a track-record of success stands out from the crowd.
- Reports for managing health benefits, population by population - When working with an exchange, employers need to be able to track their employee populations, active and retired. Exchanges must offer a sophisticated suite of business intelligence tools to let employers see how their people are faring so they can continue to execute proactive health benefit strategies.
- Data to manage and workforce health and wellness - High-performing wellness programs are getting more and more recognition as ways to influence population health and contain costs. Employers who have group plans or who self-insure need to manage their health benefits strategically.
- Benefit advisors to manage the questions their in-house HR departments cannot - An exchange needs enough expertise on staff and a sophisticated customer management system to answer the questions that HR cannot. Without an adequate advisory component – including knowledgeable, licensed benefit advisors – employers could risk a flood of questions and concerns from worried employees.
- Individual tracking capabilities that synch with eligibility for federal subsidies - Access to subsidies is a very important to evaluating how employees will fare. It’s not an easy metric to track, as it could depend on criteria like household income, which can vary week to week.
- Funds and claims management tools - Most large employers are looking to exchanges to let them fund greater choice and value for employees – not to end funding but to make it sustainable.
- A great interface - Last but not least, an exchange should have a great user interface that helps consumers crunch a lot of data into practical chunks and provides effective decision support tools.
We put the web element last because that’s the first place people tend to go, and it really is the tip of the iceberg: As you can see, an exchange is a lot more than a website.
We advise employers to get under the hood of an exchange. Kick the tires by checking out analytics, service features and management tools.
An exchange needs to be a lot more than a pretty interface, because there’s no latitude for buyers’ remorse down the road.
Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.
We’re kicking of a series of seminars in eight cities this week, starting in Falls Church, VA. The purpose of this road show is to help employers get ready for 2014, when some of the most important provisions of the health care reform law go into effect.
The events will feature high-level discussions of potential health care benefit strategies in light of health care reform. They will also introduce employers to OneExchange, a strategic health benefit solution that helps employers leverage health care reform to their advantage using proven, end-to-end, integrated, private and public exchange-based solutions for full-time, active employees; part-time employees; and both pre-Medicare and Medicare-eligible retirees.
Confirmed events are as follows:
- Falls Church, Virginia — March 6
- Atlanta — March 19
- Houston — March 28
- Minneapolis — March 28
- Cincinnati — April 4
- Dallas — April 11
- San Francisco — April 18
- Chicago — April 24
Employers interested in attending may contact Alissa Federspiel, email@example.com for more information.
In this second installment of our two part series on rate review, we’ll take a closer look at transparency, requirements for an “effective” state program, and how the rate review grants program is helping states improve their review processes.
Transparency is an important element of the Affordable Care Act (ACA). The rate review provision of the ACA provides an “unprecedented level of scrutiny and transparency to health insurance rate increases” to protect consumers from unjustified premium increases. Consumers in all 50 states will have access to the proposed rate increases, an explanation from the insurer as to why it believes an increase is necessary, and, for the first time, be able to comment on the proposed rate increase. After analysis and public comment the final determination, and the reasoning behind it, are made public.
Rate review information is available on HealthCare.gov at: http://companyprofiles.healthcare.gov/. You can look up proposed rate increases by insurance company or overall by state.
The transparency that the rate review program provides not only protects consumers from unjustified rate increases, it promotes competition and encourages insurers to keep costs down. It builds on other provisions (such as the Medical Loss Ratio 80/20 rule) and aligns with the ACA’s goal to make health care more affordable.
Every state must have an “effective” rate review program. If it doesn’t, HHS will review rates for the state. The Center for Consumer Information & Insurance Oversight defines “An effective rate review system” as follows:
- Must receive sufficient data and documentation concerning rate increases to conduct an examination of the reasonableness of the proposed increases.
- Must consider the factors below as they apply to the review:
- Medical cost trend changes by major service categories
- Changes in utilization of services (i.e., hospital care, pharmaceuticals, doctors’ office visits) by major service categories
- Cost-sharing changes by major service categories
- Changes in benefits
- Changes in enrollee risk profile
- Impact of over- or under-estimate of medical trend in previous years on the current rate
- Reserve needs
- Administrative costs related to programs that improve health care quality
- Other administrative costs
- Applicable taxes and licensing or regulatory fees
- Medical loss ratio
- The issuer’s capital and surplus
- Must make a determination of the reasonableness of the rate increase under a standard set forth in State statute or regulation.
- Must post either rate filings under review or preliminary justifications on their websites or post a link to the preliminary justifications that appear on the CMS website.
- Must provide a mechanism for receiving public comments on proposed rate increases.
- Must report results of rate reviews to CMS for rate increases subject to review.
Forty-four states and the District of Columbia have rate review programs that the HHS has deemed “effective.” Some states have the power to deny or modify the proposed rate increase if it is deemed unreasonable. Other states can determine the rate is unreasonable, but don’t have the authority to stop the insurer from implementing the increase. HHS will review proposed rate increases for states that do not have an “effective” review program, but it lacks the authority to deny rate increases.
The $250 million Rate Review Grants Program is designed to provide states with funding to improve their rate review programs. These funds have made it possible for states to build and improve the quality and efficiency of their rate review programs and provide consumers with greater transparency and protection from unjustified rate hikes. HHS anticipates awarding additional funds in 2012 and 2013 to help states further improve their ability to protect consumers.
According to the 2012 Annual Rate Review Report: Rate Review Saves Estimated $1 Billion for consumers, the rate review grants program has helped 21 states expanded the scope of their rate review efforts, 41 states have improved the quality and efficiency of their rate review process, and 42 states have increased consumer transparency. In addition, it has helped states empower consumers with information that was previously not available.
Before the ACA most consumers were left in the dark regarding premium rate increases. Many experts believe this lead to insurance company abuses and unnecessarily high premiums. The Rate Review Program and the Rate Review Grants Program have helped states provide consumer protection by analyzing and disclosing proposed double digit rate increases to consumers.
2012 Annual Rate Review Report: Rate Review Saves Estimated $1 Billion for Consumers
Quantifying the Effects of Health Insurance Rate Review
Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.
On Friday (10/12/12) the U.S. Department of Health & Human Services released the 2013 quality ratings for Medicare Advantage and Part D prescription drug plans. These star ratings summarize how well the plans performed on well-established measures of quality such as access to care, responsiveness, and beneficiary satisfaction. Plans can earn up to 5 stars, from one star for poor performance to 5 stars for excellent performance. Star ratings are reviewed each year and the results are published by CMS in the fall.
HHS Secretary Kathleen Sibelius said, “People with Medicare have more high quality choices and the performance of Medicare Advantage plans is improving,” and there are “more four and five star plans than ever before.”
|Four & Five Star Plans|
To encourage people to enroll in higher quality plans, CMS is notifying people who have been enrolled in low performing plans (plans that received less than 3 stars for the past three years) that they can enroll in a new plan if they want to. Star ratings, in addition to cost and coverage, help consumers compare plans and choose the right one for their needs and budget.
5-star plans are allowed to market and enroll people throughout the year, and thousands of people “took advantage of this opportunity to join a top performing plan,” according to Sibelius. People can switch to a 5-star plan at any time during the year, but they can only do so once each year.
In addition to better quality, HHS announced that Medicare Advantage benefits are increasing and premiums are holding steady. According to HHS data, average premiums fell 10% and enrollment increased 28%. Premiums for Part D prescription drug plans are expected to remain steady with last year at about $30 on average for 2013.
Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.
October 16, 2012
The Centers for Medicare and Medicaid Services (CMS) has announced that 2013 will bring changes aimed at continuing to improve the quality of Medicare Advantage and Part D plans while helping seniors afford their prescription medications.
The Affordable Care Act Changes to Part D Prescription Drug Plans in 2013
The Affordable Care Act includes provisions that, over time, are reducing the cost of prescription drugs for people who fall into the coverage gap, or “donut hole.” In 2011 and 2012, the discount for brand name drugs was 50%; in 2013 and 2014, it will increase to 52.5%, and will grow after that until it reaches 75% in 2020.
The discount for generic drugs is increasing too; in 2013, it will be 21% so that you will pay 79% of the cost of your generic prescription medications. The generic drug discounts will also continue to increase, until they reach 75% in 2020, with the remaining 25% to be paid by you.
Other changes to Part D plans in 2013 include:
- The standard Part D plan initial deductible will increase to $325 (up from $320 in 2012). Your deductible may differ.
- Premium costs in 2013 are expected to remain at 2012 levels, around $30.00 per month on average. If you see a large increase in your Part D premium, you can make changes during the Open Enrollment Period.
Special Enrollment Period to switch to 5-star rated Medicare Part D or Medicare Advantage plans
CMS developed its quality rating system for Medicare Advantage and Medicare Part D plans a few years ago, basing it on well-established measures of health care delivery quality such as access to care, responsiveness, and beneficiary satisfaction. Plans can earn from 1 to 5 stars.
Although 5 star plans were few in 2012, forecasters are predicting they will be more widely available in 2013 as more insurance companies achieve the service levels necessary to earn the rating.
If you want to switch to a 5-star rated plan in your area, you can do so at almost any time during the year. The Medicare Advantage and Medicare Part D 5-star plan Special Enrollment Period this year runs from December 8, 2012 through November 30, 2013.
Special Enrollment Period to leave a consistently low rated Part D or Medicare Advantage plan
If either your Medicare Advantage or Part D plan has failed to achieve at least a 3 star rating from CMS over the last three years, you should expect to receive a letter from CMS offering you a Special Enrollment Period to leave your plan and choose a new one.
September 4, 2012
Why have exchanges? … What is an exchange? What isn’t?: A Two-Part Blog Series on Health Care Insurance Exchanges
By Brian Bohlig, chief marketing officer
Extend Health – A Towers Watson company
You wouldn’t call it a stock exchange if only one company was selling shares on it, right? It’s easy to see how that kind of a market would benefit the company selling on it – buy my product and forget the rest.
But how does that help consumers?
As a corporate or government employer or professional/trade association, you should be asking this question if you want to offer employees /members – present or retired – health care coverage through an exchange.
What you find when you look under the hood of some of exchanges might surprise you, because some models aren’t set to drive all the value and savings organizations and consumers aspire to when making the transition from a group health insurance plan to the individual market.
Why an exchange?
The reason for exchanges in the first place is to help get a handle on an industry known for its complexity and high costs. A nimble exchange has the potential to slice through health care and insurance industry complexity and costs with:
- Apples to apples comparisons – Putting comparable plans from different carriers beside one another so consumers can make sense of the benefit differences.
- Transparency – Showing pricing, not just of medical plans but also helping assess out-of-pocket costs consumers could see down the road based on prescription medication needs, the kinds of doctors they see and where.
- Objectivity – A system that doesn’t promote certain plans for non-consumer-oriented reasons, like commissions, or for the administrative ease of the exchange itself.
- Cost-savings – By making it easy to compare plans side by side, it creates a competitive environment where consumers can pick the least expensive plan that meets their needs best.
Extend Health has been running an exchange for eight years. In 2005, when the Medicare Modernization Act did for Medicare insurance plans what health care reform is doing for everyone else now, we set up the first real private Medicare exchange – an exchange that gave retired employees of our employer clients access to the individual Medicare plan market – an exchange that moved beyond the one-size fits all structure of employer group plans. We enrolled retirees from our first employer, Chrysler, in 2006.
Today we offer the largest number of carriers – over 75 and counting, serve the largest number of employer clients – over 175 (40+ Fortune 500s) and counting, and the largest number of consumers who have selected individual Medicare plans through our exchange – over 200,000 and counting.
Since Extend Health became a Towers Watson company back in May and the Supreme Court ruling upholding health care reform, many clients, retiree, reporters and others in the health care industry have been asking us about exchanges and what to expect.
At this pivotal point in the evolution of health care in our nation, Extend Health is in a unique position. Features of the Medicare environment, like guaranteed issue and standardized plans, are being applied to the rest of the U.S. health care environment. And we have deep, long-standing measures and knowledge about how consumers, employers and carriers have fared on the Extend Health exchange.
In the next post of this series, I share what experience has taught us about what to look for and what to ask when you’re considering an exchange.
For regular commentary on developments and trends in health care, insurance, and technology, follow @brycewatch and @ExtendHealth on Twitter and check out http://www.extendhealth.com.
- 2011 Global Brand Simplicity Index, Siegel+Gale
- How-health-care-exchanges-will-work , Gerald Kominski, UCLA’s health policy research director explains the market aspects of how health insurance exchanges could function
- Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?, Paul Fronstin, Ph.D., Employee Benefit Research Institute
On August 22, 2012 CMS Announced 500 primary care practices that will participate in the Comprehensive Primary Care (CPC) demonstration project in a new partnership between payers and primary care providers. Backed by the ACA, the goal of this multi-payer initiative is to deliver better coordinated, higher quality, patient-centered care, and to reduce costs.
The CPC’s goal was to enroll about 75 primary care practices in several regions spanning eight states: Arkansas, Colorado, New Jersey, New York, Ohio & Kentucky, Oklahoma, Oregon. Practices were chosen in a competitive process based on several criteria.
- Use of health information technology
- Ability to demonstrate recognition of advanced primary care delivery by accreditation bodies
- Service to patients covered by participating payers
- Participation in practice transformation and improvement activities
- Diversity of geography, practice size and ownership structure.
The chosen practices are to begin delivering health care services under the program in the fall of 2012, and are projected to serve over 300,000 people with Medicare. For more details and a complete list of participating primary care practices visit the CMS Innovation web site and read the CMS press release.
August 22, 2012
The newly available Extend Health BenefitView™ dashboard lets employers ensure no retiree is left behind during the enrollment process. BenefitView gives employers access to something they’ve never had before on a Medicare exchange: real-time, interactive reporting on the experience of their retirees as they transition from the employer’s group coverage to their own individual Medicare plans on an exchange.
In “Retiree Medicare exchange previews improved transparency,” Employee Benefit News sheds light on how valuable this degree of insight is to HR professionals leading their companies and employees through a health care benefit transition this significant.
BenefitView is the culmination of eight years of our insight into delivering a premium health insurance exchange experience for consumers and employers on the Extend Health private Medicare exchange.
BenefitView answers burning HR questions
BenefitView offers employers immediate answers to questions around goals and milestones when transitioning from a group plan to the individual Medicare market:
- Have retirees responded to our communications?
- Are their calls to benefit advisors getting through in good time?
- Are they making and completing their appointments with benefit advisors?
- How long are those calls taking on average?
- Are they choosing plans and which ones?
- Are there groups that we may need to do additional outreach to?
BenefitView gives employers up-to-the-minute, unfiltered answers to these questions with the click of the mouse.
BenefitView users and creators tell us what they think
We talked to representatives from a few of the employers who have used BenefitView for mid-year transitions. Here’s what they had to say.
“Before our transition started, we wanted to make sure our retirees first understood that they were going to get more choice and control over their Medicare health benefits. Then we wanted to provide retirees with all the right information they needed to participate,” said Melissa (Missy) Hartfiel, benefits planner, Global Compensation and Benefits for International Paper. “With BenefitView, we can instantly see all the data on our progress – the number of retirees contacted, the number of calls and enrollments completed, how quickly our retirees were being answered, and the length of those calls. This inspired a lot of confidence in the Extend Health solution. As a non-techy, I also appreciated that BenefitView is visual and easy to use – there was no learning curve and I got all the data I wanted with one click.”
“The data HR professionals see in BenefitView is the same data that Extend Health sees in-house,” said David Lash, senior director of product management for Extend Health. “This actually makes our weekly progress meetings with employers much more strategic. We don’t have to spend time communicating numbers or determining where we are in the process. We’ve been looking at the same numbers all along and we are able to focus our energy on optimizing the course for each phase of the transition. It’s much more efficient for everyone. More than the technology involved, our goal for this tool was to create this premium experience for employers.”
“Employers sponsor and subsidize these transitions of their retirees to individual plans to assure that every retiree gets a chance to have the supplemental Medicare coverage they want while managing company costs and future liabilities,” said Brian Bohlig, chief marketing officer for Extend Health. “It’s very important to employers, to us and most importantly to retirees that these transitions go as smoothly as possible. Extend Health has always provided employers frequent and comprehensive progress reporting to ensure smooth transitions – but now we’ve made it real time and on demand. BenefitView makes communication between Extend Health and employers seamless, and protects employers from finding out after the fact that their retirees missed out on getting the health care coverage they needed or wanted.”
Another Extend Health client, Oak Ridge National Laboratories, also experienced the difference BenefitView could make in the process of selecting individual Medicare plans. “With BenefitView, I was able to give our HR Director up-to-the minute progress reports whenever she asked for them,” said benefits manager Scott McIntyre. “As we neared the end of our enrollment period, we were checking BenefitView daily and adjusting our communications and outreach to make sure we were giving all of our retirees every chance to participate. BenefitView allowed us to keep our finger on the pulse of what was happening with our retiree transition whenever we wanted.”
Real-time information available to employers through BenefitView includes:
- Number of retirees enrolled versus the total number eligible in time remaining
- Percent of eligible retirees contacted
- Number of appointments scheduled
- Number of appointments met
- Plan types selected across different populations
- Average premiums across different populations
- Number of unique plans selected
- Number of unique carriers selected
- Total number of calls
- Average wait times for before reaching a benefit advisor
- Average time to handle calls
Get a BenefitView demo
August 21, 2012
Kaiser Health News recently published a helpful FAQ on “Decoding the $716 Billion in Medicare Reductions.” This FAQ addresses some of the questions being raised in the Medicare debate, including where the $716 billion figure came from, where reductions in Medicare spending are expected, and more. It’s a good read and we invite your comments.
August 10, 2012
The GAO recently released the new report title Medicaid Expansion: States’ Implementation of the Patient Protections and Affordable Care Act. The report contains results of research conducted to see what states are doing to implement Medicaid expansion, learn what their responsibilities are, and identify what challenges they face. It addresses the following issues relating to implementing Medicaid expansion:
- State responsibilities
- Actions taken to prepare
- States’ views on the financial implications of expansion
The GAO conducted a web-based survey and interviewed Medicaid officials in six states: Colorado, Georgia, Iowa, Minnesota, New York, and Virginia. They selected these states based on:
- Size of expected enrollment
- Enrollment rates
- Geographic dispersion
- Insurance coverage provided to childless adults
The ACA requires Medicaid eligibility to be expanded to non-elderly people with incomes at or below 133% or the federal poverty level (FPL). It also specifies that each state must change how it determines Medicaid eligibility, as well as streamline eligibility and enrollment systems that will coordinate enrollment across Medicaid, Children’s Health Insurance Program (CHIP) and the state health insurance exchanges.
The bill allows states to opt out of the expansion, but stipulates that they will lose their existing federal Medicaid funds if they do so. When the Supreme Court ruled on the constitutionality of the health care law in June of 2012, it modified the provision on Medicaid expansion by allowing states to opt out without losing their existing federal Medicaid funding. This change prompted the Congressional Budget Office (CBO) to update its budget estimates, reflecting projections that fewer people will be covered by Medicaid and CHIP, while more people will be enrolled through state health insurance exchanges and uninsured than in its previous estimate. The GAO completed its field work on this study prior to the Supreme Court’s ruling, so the impact of that decision was not included in their analysis. However, the requirements for states that choose to participate in the Medicaid expansion have not changed as a result of the Supreme Court decision and the report is still a useful snapshot of how these states are getting on with preparations for it.
Requirements for states that participate in Medicaid expansion
By January 1, 2014 states must:
- Expand eligibility to non-elderly people with incomes at or below 133% of FPL
- Streamline their enrollment process
- Transition to Modified Adjusted Gross Income (MAGI) to determine income eligibility
- Identify those who are newly eligible to obtain federal matching funds
- Simplify and streamline the eligibility determination process
Table 1: ACA provisions included in the GAO study.
|Medicaid eligibility||Expand eligibility to non-elderly people with incomes at or below 133% of FPL.|
|Modified adjusted gross income (MAGI)||Transition to using MAGI to determine income eligibility.|
|Early expansion option||States can expand coverage to newly eligible people prior to January 1, 2014.|
|Maintenance of effort||States must maintain eligibility standards until an exchange is fully operational.|
|Federal matching||Federal matching funds will be provided to states for newly eligible adults.|
|Streamlined eligibility and enrollment systems||“States must provide a process for individuals to apply for or renew their Medicaid eligibility through a website that enrolls individuals in the appropriate program (Medicaid, CHIP, or exchanges) no matter to which program they originally apply.”|
The GAO found that the states studied are taking steps to prepare for Medicaid expansion, but they face some challenges including the need for additional federal regulations and guidance. CMS has issued a final Medicaid rule and indicated that more guidance will be forthcoming. In addition, the majority of state budget directors interviewed believe the following factors will contribute to the cost of expanding Medicaid.
- Administration required to manage Medicaid enrollment
- Acquisition or modification of information technology systems to support Medicaid
- Enrolling people who were previously eligible, but have not so far enrolled in Medicaid
They also expressed uncertainty about:
- The impact of shifting exiting Medicaid enrollees into health benefit exchanges
- Fiscal capacity and the state’s share of Medicaid expenditures
- Guidance needed to develop budget estimates
- Additional regulations and/or guidance needed on
- How to apply MAGI
- Conversion of Medicaid eligibility standards
- Access to eligibility data through the Federal Data Services Hub
After reviewing and commenting on the study, HHS agreed to provide states with additional regulations and/or guidance on MAGI conversion and FMAP computation. HHS also reiterated that the decision to participate in Medicaid expansion is up to the state – there is no deadline date for their decision – and federal matching funds are available to help states cover information technology costs for modernizing eligibility systems, which don’t have to be paid back if the state decides not to expand Medicaid.
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