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Kaiser recently released the results of its thirteenth annual Kaiser Family Foundation/Health Research & Educational Trust (HRET) Employer Health Benefits survey. Each year they conduct a survey of 3,184 “nonfederal private and public employers with three or more workers.”

This survey looks at many employer-sponsored health coverage trends including premiums, employee contributions, cost-sharing and much more. New for 2011 it also includes, “the percent of firms with grandfathered health plans, changes in benefits for preventive care, enrollment of adult children due to the new health reform law, and the use of stoploss coverage by firms with self-funded plans.”

The findings in this year’s survey show that the percentage of large employers (those with 200 or more workers) offering retiree health benefits in 2011 is 26%, which is the same percentage that was offered in 2010. The steep decline in employers offering retiree benefits seems to have moderated in recent years, and reached a plateau at least for the time being.

Here are a few key findings:

  • 26% of large employers are offering retiree Health benefits – no change from last year.
  • 72% of all firms have at least one grandfathered plan under ACA.
  • 65% of small businesses haven’t checked to see if they qualify for ACA small employer tax credits.
  • 56% of covered workers are in grandfathered plans.

You can access the survey online at http://ehbs.kff.org. You read the report online, or down load the full report, a summary, and presentation slides as well as various other documents and supplements.

Visit Extend Health — the nation’s largest private Medicare exchange.

The Urban Institute released a report this month titled, Why Employers Will Continue to Provide Health Insurance: The Impact of the Affordable Care Act. The authors of the report utilized microsimulation models to analyze ways employers might react to health care reform. Based on the results of these complex simulations they predict that employer-sponsored insurance (ESI) will remain the preferred and primary source of coverage. The report states that ESI coverage won’t be significantly different under the ACA, and points out that ESI actually grew in Massachusetts after it enacted health care reform similar to the ACA.

For more information the report and summary are available in PDF format.

Visit Extend Health — the nation’s largest private Medicare exchange.

CMS’ Final Rule for ACOs

October 21, 2011

CMS’ final rule for Accountable Care Organizations (ACOs) is now available for download from The Office of the Federal Register. For your convenience, here’s a link directly to the PDF.

Side-by-side comparison of proposed vs. final rule for ACOs

Washington Extension

October 21, 2011

Medicare News

HHS released quality rating scores for 2012 Medicare Advantage plans. Nine out of 569 plans received the top score (five stars) and approximately 20% of plans are not rated due to lack of data. Of the nine top-rated plans, four are operated by Kaiser Permanente and all are HMOs. Other insurers—notably United Healthcare—have significantly lower average star ratings but are aggressively pursuing higher rankings. The Affordable Care Act tied significant funding, estimated at $3-4 billion in 2012, to high-quality rankings. The average plan rating is 3.56 stars, up 0.11 stars over 2011.

Just prior to the release of Medicare Advantage quality rankings, Kaiser Permanente released a survey of Medicare beneficiaries showing lack of awareness of quality rankings. The survey revealed that less than 20% of beneficiaries are aware of the rating system. Of those, less than one-third used quality rankings to choose a plan. Beginning this year, HHS’ Medicare Plan Finder highlights top-rated Medicare Advantage plan with a gold star to help seniors find high-quality plans.

ACA Updates

The Obama Administration effectively shut down the CLASS Act—the long-term care insurance scheme championed by the late Senator Kennedy and enacted in the Affordable Care Act. HHS sent a lengthy and detailed report to Congress explaining the attempt to develop an actuarially sound plan that would provide benefits required by law and ensure solvency over 75-years. Republicans assert that the failure of the CLASS Act is representative of the devastating effects the ACA would have and the House Energy & Commerce Committee has scheduled a hearing to explore the cancellation. The White House counters that CLASS is a stand-alone program with no effect on the rest of the law.

Despite his opposition to the Affordable Care Act, Wyoming Governor Matt Mead supports recommendations from a health insurance exchange steering committee to establish a state-run exchange through an executive order. The committee was skeptical that an exchange office could be established through the state legislature and wants to decide whether to run an exchange by 2013.

Arkansas’ Insurance Commissioner is concerned that it is too late to pass exchange authorizing legislation, and is advocating for a Federally-run exchange with state regulatory and oversight responsibilities. This hybrid model has been suggested by HHS as an option for states. Controversy over whether Arkansas should apply for Federal grant funding for exchange work continues within state government, leading to reversal of plans to seek funding for exchange progress.

On the Hill

The deficit reduction “Super Committee” is flooded with suggestions and protests for achieving its $1.2 trillion goal, with about a month left before recommendations are due. Most submissions are recycled policy ideas from previous debates, but aim to avoid harmful impacts from across-the-board cuts. In addition to comments from interest groups, think tanks, individual Congressman and caucuses, and industry, the Super Committee received recommendations from congressional committees both bipartisan and along partisan lines. Despite the multitude of ideas, the Super Committee’s work appears to be progressing slowly and will be discussed in public next week.

Reports/Other News

Humana has exited Utah’s health insurance exchange, citing its desire to prioritize its own solutions for the small business market. The exchange opened to all small employers in the state one year ago, and Humana was one of the largest insurers to participate.

The Kaiser Family Foundation released an analysis of the competitiveness of state health insurance markets. Analyzing the composition of state insurance markets may help state policymakers decide how to implement new insurance market rules, decide whether to operate an exchange, and conduct more effective premium rate review. In 30 states, one insurance company had more than 50% of the individual plan market share in 2010, while in the small group market the median market share of the largest insurer is 51%.

The Healthcare Leadership Council—a coalition of healthcare executives—released a survey of Part D enrollee experiences with the drug benefit. The survey found that almost 90% of enrollees are satisfied with their drug plan, and 70% report being better off than before Part D. Eighty-five percent agree that they understand how to use their plan and that it works well, and slightly fewer agree that their out-of-pocket costs are reasonable.

Visit Extend Health — the nation’s largest private Medicare exchange.

On Wednesday, October 19, 2011 the Social Security Administration announced the first cost-of-living adjustment (COLA) since 2009. Over 60 million Americans will receive a 3.6% increase in their Social Security and Supplemental Security Income (SSI) benefits.

Increased payments for over 8 million SSI beneficiaries begins on December 30, 2011, and nearly 55 million Social Security beneficiaries will start getting their 3.6% cost-of-living adjustment in January 2012. According to the SSA press release, the Social Security increase for some beneficiaries “may be partially or completely offset by increases in Medicare premiums.”

More information:

Visit Extend Health — the nation’s largest private Medicare exchange.

On Wednesday (10/12), the federal government released its annual review of private Medicare Advantage health plans. In addition, 5-Star quality ratings are now posted along with the plans loaded in “Medicare Plan Finder available on Medicare.gov.

This year health plans are paying much closer attention to their ratings because they stand to make more money if they score higher on Medicare’s 5-star quality rating system. The bonuses could be substantial, even for insurers that only make small increases in their ratings. Carriers with well-rated plans hope that the droves of baby boomers becoming eligible for Medicare will pay attention to the star ratings and choose their plans.

The ratings are based on 36 measures in five categories, covering things like screenings, tests, complaints, service, and other relevant measures. There’s a helpful CMS document called, “Choose Higher Quality for Better Health Care,” that provides a very good overview of the program. We also recommend reading our previous blog post, “New MA star ratings released by CMS.”

For more, check out these very good articles written recently on the subject.
Private Medicare Plans Use Stars To Navigate For Profits” from NPR

Chasing The Stars, Insurers Improve Quality — And Revenue” from Kaiser Health News

Visit Extend Health — the nation’s largest private Medicare exchange.

To make it easy for you to find the latest news on Medicare and health care reform we will be posting important stories for you throughout the week. To find the news that’s important to you check out our new page, “Today’s Top Medicare and Health Care Reform News.” You’ll find the link in the side bar on the right.

We hope you enjoy this new feature of our blog and find it useful on a regular basis. As always, we welcome your thoughts and comments. Thank you!

Visit Extend Health — the nation’s largest private Medicare exchange.

Washington Extension

October 7, 2011

Medicare News

Researchers at the Harvard School of Public Health found that among Medicare beneficiaries in their last year of life in 2008, one-third had a surgical procedure performed. One-fifth had surgery in the last month of life, and one in ten had surgery in the last week of life. The rates of surgery varied dramatically across the country, but geographic variation is controversial because it is unclear whether it reflects unnecessary care or true differences in patient needs. This report adds to the influential research conducted by the Dartmouth Atlas of Health Care showing Medicare beneficiaries living in areas of the country with lower intensity of end-of-life care do not have higher mortality rates.

The Michigan state legislature voted to end retiree health benefits for future and newer sitting legislators, in the face of state budget shortfalls. Retiree health benefits cost the state about $5 million in the last fiscal year. Governor Rick Snyder has promised to sign the legislation.

ACA Updates

The Institute of Medicine (IOM) released its highly-anticipated report on the criteria for determining essential health benefits (EHB) that ACA-qualified health plans must cover. The ACA defined ten categories of commonly-covered health services that plan benefits must include. The IOM identifies criteria for defining and updating specific components of the EHB, including: use a public deliberation process, include only medically necessary services that are value-based, promote some state flexibility, make annual updates based on credible evidence of effectiveness of benefits, and rely on typical coverage in the small employer market. Unlike Medicare’s coverage standard of “reasonable and necessary”, the IOM recommends higher standards for benefit coverage, such as the treatment demonstrate meaningful improvement over current effective services/treatments, and is cost effective. These criteria (among others) are aligned with the criterion that the EHB package, in aggregate, be affordable.

In ongoing litigation regarding the ACA, 26 states and the NFIB filed petitions to the Supreme Court to appeal the ruling in the Eleventh Circuit which struck down the individual mandate but upheld the remainder of the ACA. The Department of Justice also filed its own petition requesting review of the Circuit Court decision, significantly increasing the odds that this issue will appear on the Supreme Court’s docket this term (though the Court may have more than one case to choose from). Outstanding questions remain about the ability of the Court to rule on a federal tax law before anyone has actually paid the tax (i.e. the individual mandate penalty).

Nebraska will wait until the Supreme Court decides on the constitutionality of the ACA before setting up a health insurance exchange. According to the governor, the state is designing a program and applying for federal funding, but won’t build a “formal proposal” until the Court decides. Minnesota’s prospects are less clear: while the governor has secured millions of federal dollars, and has support to design a state-run exchange from the Minnesota Chamber of Commerce and some Republicans in the legislature, a debate rages about whether the governor needs authorization from the GOP-controlled legislature—which has been unwilling to pass a bill—to set up an exchange.

On the Hill

House Republicans released their 2012 draft budget for health, labor and education, totaling $153.4 billion. This compares with the Senate Democrats’ proposed budget of $165.3 billion. The Republicans’ draft bill prohibits funds to implement the ACA, as well as provisions to rescind funding already provided for ACA programs. Rep. Denny Rehberg (R-MT), chairman of the House Appropriations Labor-Health and Human Services subcommittee, recently wrote to the “Super Committee” recommending they cut ACA Medicaid expansions and affordability credits to achieve their $1.2 trillion deficit reduction goal.

Reports/Other News

About one quarter of retirees think that life in retirement is worse than before they retired, according to a RWJF/NPR/Harvard School of Public Health poll. This compares with only 14% of pre-retirees who expect that retired life will be worse. Retirees cite costs of medical treatment and long-term care as especially worrisome. Many fewer pre-retirees think that their health will be worse (13%) during retirement than retirees who say their health actually is worse (39%). Pre-retirees are also less confident (38%) that Medicare will provide benefits of at least equal value to current benefits than retirees (52%).

Average annual premiums for employer-sponsored health insurance in 2011 rose 8% for single coverage (to $5,249) and 9% for family coverage (to $15,073) over 2010 costs, according to this year’s Kaiser Family Foundation/HRET employer health benefits survey. The percentage of total premium paid by workers is similar to 2010 (18% for individuals, 28% for family coverage). Among firms offering coverage to employees, 26% offer retiree coverage, similar to 2010. State and local governments are most likely to offer retiree health benefits (83%), while large firms in the retail and wholesale industries are least likely (15% and 16%). Nearly all (91%) of offering large firms cover early retirees below age 65, while 71% cover Medicare-age retirees. AHIP blames rising insurance costs on prices for medical services, asserting that Washington must do more to control cost growth. Kaiser attributed 1-2% of the premium increase to provisions of the Affordable Care Act, including allowing children up to age 26 on their parents’ health insurance.

The Government Accountability Office (GAO) released a report showing 170,000 Medicare Part D beneficiaries received prescriptions for controlled substances from five or more physicians in 2008, indicating fraud and prescription drug abuse in Part D. In ten individual cases examined by the GAO, physicians did not know that their patients were receiving drugs prescribed by other physicians. Although Part D plans are required to perform retrospective drug utilization reviews to identify inappropriate or unnecessary medication use, plans are not authorized to restrict drug access based on the findings.

Visit Extend Health — the nation’s largest private Medicare exchange.

The road map for state exchange health plans in 2014 was just released. Posting it here to make the whole report available.

Essential Benefits Package (IOM Oct 6 2011)