July 26, 2013
The bigger the organization, the greater the chance they are providing employee benefits. In last week’s Labor Department annual report on employee benefits, both size and ownership impact whether companies provide health care benefits, retirement plans, paid vacation and sick leave.
The study found that in 2012, 88% of private sector companies with 500 workers or more provided their employees with health care benefits. The percentage dropped with workforce size. For companies with 100-499 employees, the number fell to 82%. For companies with 50-99 employees, the number further dropped to 69%. And for the smallest companies, with 1-49 employees, only 53% of workers had access to employer-sponsored benefits. The trend was very similar in the public sector, with 90% of organizations with 500 or more employees providing coverage.
Access to company health care in both the public and private sectors rarely changes by more than one percentage point from year to year. In 2011, 90% of the largest companies provided health care benefits and 53% of the smallest companies provided access. In 2002, 82% of companies with 100 workers or more workers provided health care benefits and 58% of companies with 1-99 workers provided the same benefits. The 2013 report continues a long-standing trend of larger employers providing benefits.
Payroll and hours data were also examined in the report and analysts concluded that the numbers did not indicate any extreme increase in the part time work force. While the part time work force can fluctuate by thousands, its percentage of the total workforce has stayed level, between 18.5%-20%, since 2009.
The Labor Department’s report indicates that trends in employer sponsorship of health care benefits are continuing as they have over the last few years. Benefits continue to depend on the size of the company, and the small bump in the part time workforce may mean more part time workers, but as a percentage of the total workforce, it remains constant.
Read more about the report here:
July 25, 2013
In a new survey from Health Pocket released this week, 65 percent of respondents said they would prefer to choose their own insurance carriers rather than have their employer choose for them. But the majority of Americans don’t have the ability to choose their own insurance company. Sixty-six percent of insured Americans receive coverage through their employer, where health care options are limited to the insurers selected by the company.
Private exchanges emerging into the market today from a number of companies, including Towers Watson, offer the kind of choice that the survey indicates people want. A report by Accenture predicts that private exchanges will surpass enrollment in public exchanges by 2018.
Read the Health Pocket survey here: http://www.healthpocket.com/healthcare-research/surveys/group-health-insurance-plans-americans-prefer-to-choose-provider
July 25, 2013
With open enrollment on the state exchanges beginning in less than four months, the states are kicking into high gear, announcing carriers, establishing navigator networks, and of course, revealing rates. Premium rates on the exchanges have been seen by commenters as the harbingers of either success or failure. States that announce lower rates are deemed “ACA poster children,” and those with rate increases, disasters, but it’s all more complicated than that.
Recent media coverage surrounding two states, New York (the poster child) and Indiana (the disaster), paint a picture of the disparity in exchanges across the country. But when we look a bit deeper, the success stories aren’t all that remarkable, and the disasters are only slight disappointments.
We’ll start with the good(ish) news:
Last week, New York announced that premium rates on their exchange would be 50% lower than the rates for individual insurance plans available today. This breaking news served as a valuable talking point for proponents of the health care law, illustrating that it will cause carriers to compete and result in affordable insurance premiums. Although a 50% decline in prices is certainly a nothing to sneeze at, consumers in other states probably won’t experience the same level of reductions.
So how did New York’s premiums manage to fall so dramatically? Well, New York’s health care system started off differently than most other states in the country. Even before the 2010 health care reforms were put into place, New York maintained a system of regulations that looked very similar to the reforms under the ACA. No New Yorker could be turned away because of a preexisting condition; insurers couldn’t cancel policies because you got sick, or charge more because of your health status or gender.
The one major difference between the New York health care system and the ACA is that New York never instituted a universal mandate. Because of this, old and sick people purchased care, while young and healthy people chose not to. This led to very high premiums, with no healthy population to balance out the sick and expensive one. Rates in New York spiraled upwards of $1000 for individual plans, and excessive prices further deterred young and healthy people from purchasing on the exchange.
So, beginning in 2014, the health care law will require everyone to purchase coverage, aiming to include young people to better stabilize costs. The individual mandate was a vital piece of the health care puzzle that was missing in New York and its instatement will allow thousands more New Yorkers to afford coverage. But a 50% drop in costs in New York still amounts to a hefty premium for some consumers. Rates on the New York exchange are projected to land between $170 and $965 a month. And while that is a drastic decrease for some buyers it’s not all that cheap for others.
Now onto the bad(ish) news:
In Indiana, rates are projected to jump by 72% and could cost as much as $570 for monthly premiums for the most comprehensive plans. A rate increase this large is never good news, but it doesn’t look too dismal when we view Indiana’s rates alongside premiums for the rest of the nation.
The Physicians Health Plan of Indiana estimates that 45 percent of its enrollees will pick bronze level plans and 38 percent will take up silver plans. This means that the vast majority of enrollees in Indiana are opting for less comprehensive plans with rates that are on the lower end of the spectrum. While Indiana has not released exact rates for metal-level plans, the average, $570, probably won’t be what most people end up spending.
When we look at Anthem Blue Cross’s projections for average bronze level plan, $307 for a 47 year old non-smoker, it comes out roughly in line with rate projections for the rest of the country. What we’ve seen so far is that most “second lowest cost silver plans” are between $300 and $400 across the nation. So while rate increases never sound appealing, when compared to the behavior of the rest of the country, nothing catastrophic seems to be happening in Indiana.
Take a look at the premium rates for other states: State Exchange Table
July 23, 2013
The UCLA Fielding School of Public Health released a study last week examining the constitutional right to health care in countries around the globe. Although all members of the United Nations acknowledge the universal right to health, the study shows that not all counties include health care as a constitutional right.
The study found that 73 U.N. member countries (38 percent) guaranteed the right to medical care services, while 27 (14 percent) aspired to protect this right in 2011.
But the numbers don’t tell the whole story. Countries with older constitutions often don’t include the right to health care, but such countries often have excellent national health care systems. In contrast, there are counties that have constitutional protections for health care, but have trouble implementing their health care systems on the ground.
There is a clear global trend towards adopting national health care systems. Only 1 of 33 constitutions adopted between 2000 and 2011 did not protect at least one health right. America is following the global trend as the Affordable Care Act moves the country closer to the goal of health care coverage for every United States citizen.
Read more about the study here: http://newsroom.ucla.edu/portal/ucla/a-constitutional-right-to-health-247449.aspx
July 23, 2013
This fourth installment of “On the State-Exchanges,” includes news on rate proposals, outreach programs, participating insurers, promotional campaigns and the HHS report on rates on the individual and group markets. The State Exchange Table continues to provide the latest information on carrier participation and plan rates as they occur
The department of Health and Human Services published a report on Thursday announcing that premium rates on the individual and group markets are nearly 20% lower than expected. Silver plans average per-month premiums in the states that have so far announced rates are as follows:
• New Mexico-$298
• New York-$349
• Rhode Island-$412
Read more on the HHS report here: http://aspe.hhs.gov/health/reports/2013/MarketCompetitionPremiums/rb_premiums.pdf
Multiple states running their own health insurance exchanges have launched television ads to help spread awareness about the new health insurance marketplaces. The ads, aired in Oregon, Kentucky, Colorado, Connecticut, Hawaii and Vermont, are state-specific and are non-political in nature. The states participating in the federally facilitated exchanges are set to launch ads in September.
Vermont– Plan rates on Vermont’s health insurance exchange are lower than expected, with about a 5% reduction from previous estimates. The two insurance carriers on the Vermont market, Blue Cross Blue Shield of Vermont (BCBSVT) and MVP Health Care (MVP), will offer average individual monthly premiums of $395 and $410 respectively. For those with incomes under 133% of the federal poverty line, monthly premiums could be as low as $19.
New York– Rates on the New York health insurance exchange are expected to drop by 50% from current prices. People can purchase individual plans with monthly premiums as low as $308 before subsidies kick in. Average premiums for an individual plan can range from $170 for catastrophic coverage to $965 for platinum level plans.
The state has approved seventeen insurers to sell plans on the exchange: Aetna, Affinity Health Plan, American Progressive Life & Health Insurance Co. of New York, Capital District Physicians Health Plan, Health Insurance Plan of Greater New York, Empire BlueCross BlueShield, Excellus, Fidelis Care, Freelancers Co-Op, Healthfirst New York, HealthNow New York, Independent Health, MetroPlus Health Plan, MVP Health Plan, North Shore LIJ, Oscar Health Insurance Co. and United Healthcare.
Florida– The national health care education organization, Enroll America, launched its program in Florida on Wednesday. Enroll America hired 25 organizers who will begin reaching out to residents to educate people on the Affordable Care Act and the enrollment process.
Rhode Island– Rhode Island is launching an outreach campaign to help raise awareness about the state’s health insurance exchange. The launch will include presentations to businesses, community groups and consumers, and will air television and radio ads as part of the promotional campaign. Rhode Island granted the Florida based company, Connextions, a $24 million, 18 month contract to run the exchange. The organization will hire as many as 100 people to help run and manage the exchange.
Maine– The federal government awarded $1.4 million in grants to 19 Maine health centers. The grants will go towards hiring more staff that will help people find affordable health coverage on the state’s exchange.
California- 195 California health clinics received a total of $21.9 million to help enroll people in the state’s exchange come October. The clinics serve over three million Californians and grant money will go, in part, towards hiring an additional 400 workers.
Missouri– Three of the nation’s largest insurers will not participate in Missouri’s federally run exchange. Cigna, UnitedHealthCare and Assurant Health have all decided not to participate in the state’s exchange, while Anthem Blue Cross, which holds a 26% share in the Missouri individual insurance marketplace, will provide care when the exchange opens in October.
More state exchange plans and pricing information: State Exchange Table
July 18, 2013
Most Americans are still unsure about what is going on with the Affordable Care Act, what it does, or even if it still exists. Here is a short cartoon from the Kaiser Family Foundation that helps explain what Obamacare is all about and how it may affect you.
Don’t understand Obamacare? Watch YouToons
July 18, 2013
A few months ago Steven Brill published a groundbreaking piece in Time Magazine addressing the inexplicably high and arbitrary costs of medical care. In June, he testified in front of the Senate committee on finance reiterating that changes must be made when ordinary people are charged $18 for a test strip or $88 for a pack of gauze or $49,000 for a $4,500 drug. Brill describes seller regulation, price controls, malpractice reform and anti-trust enforcement as possible pieces to the health care solution but maintains that transparency is the first step in the process. This is a copy of Brill’s congressional testimony that touches on much of what he discussed in his Time piece, and further asserts that to understand and change the extreme costs of healthcare, we need to start discussing the pieces of the healthcare puzzle that the Affordable Care Act didn’t address.
July 17, 2013
Insurance companies will refund their enrollees nearly eight times less during this second year of Obamacare.
In 2011, insurers nationwide granted consumers $3.9 billion in rebates for excess expenditures that did not meet the new health care law’s 80/20 rule. The rule requires that 80 cents of every premium dollar goes towards patient care. Any excess spending on administrative, marketing, taxes and executive pay costs must be returned to enrollees. This year the number dropped to $500 million.
The reduced rebate indicates increased insurer efficiency and compliance with the nation’s health care law. This August, rebates will be distributed to 8.5 million enrollees who will receive an average rebate of $100 per family.
Health and Human Services Secretary Kathleen Sebelius says that the medical pay out provision under Obamacare has saved the federal government $5 billion in the last two years.
The reduction in rebates points toward increased efficiency and improved cost controls among insurance carriers as they work to comply with the 80/20 rule. And some were able to avoid paying any rebates at all this year. In 2011, Blue Cross Blue Shield of Tennessee had to pay $8.6 million in rebates to 73,000 policy holders; this year the insurer met all federal requirements.
July 11, 2013
Way back in 2011, the federal government chose 32 organizations to participate in the Pioneer Accountable Care Organization (ACO) Model. Accountable Care Organizations are groups of doctors, hospitals, and health care providers that voluntarily come together to provide coordinated care to Medicare patients. ACOs aim to save money by providing more efficiently managed care. Providers forgo traditional fee-for-service payments, where the hospital charges for each service administered, and instead receives a fixed monthly stipend for each patient. The ACO model would test the implementation of different payment arrangements to improve the quality of care and reduce Medicare costs.
Nearly a year later in 2012, the department of Health and Human Services announced that another eighty-nine ACOs would be added to the Medicare program. The addition added 1.2 million people to the program and estimated a four year total savings of $940 million.
A sign that not all may be going as well as hoped was the recent announcement that nine of the original 32 pioneer ACOs may leave the Medicare program. The program was set up for large healthcare organizations that already had some experience providing coordinated care for patients. But some hospitals and health care systems are discovering that it is more difficult to manage the financial risk of sick Medicare patients than previously thought.
These nine pioneer ACOs have run into a number of stumbling blocks that inhibit them from working as efficiently and cost-effectively as they need to, to stay intact.
ACO hospitals are required to control the costs of the population of Medicare recipients in their assigned area, but their actual ability to assert control over patient’s care choices is limited. For example, Medicare allows patients to choose their primary care physicians , so ACOs can’t stop a patient from visiting the doctor of their choice, even if it is outside of their network.
Other struggles relate to the collection and reporting of data, access to claims information, and the quality of data benchmarking. Medicare is six months behind in providing the pioneer ACOs with medical claims data, the critical information they need to track spending on their assigned patients. The inability to function with the tools necessary to succeed has forced some ACOs to rethink the financial sustainability of their organizations.
But, there are still 112 ACOs that, as far as we know, have not run into these problems or financial uncertainty and remain in the program. Some have seen benefits so significant that they plan on expanding. The insurance giant United Health Care plans on increasing its spending on affordable care contracts from $20 billion today to $50 billion in 2017. They report a savings of 4.5% on medical costs since the implementation of ACOs in 2010.
While the departure of the nine Pioneer ACOs is significant as it may point to larger problems with the ACO concept, it doesn’t constitute a monumental shift. Nine organizations are considering leaving, but at least four of those will switch over to another accountable care program with less financial risk. So while some of the pioneer ACOs are changing form and evolving, most will continue with business as planned or switch to a similar payment method without returning to a fee-for-service system.
Read more on ACOs here:
July 9, 2013
One of the biggest concerns for both the fans and detractors of the Affordable Care Act (ACA) is the participation of young people. The under-30 age group makes up a vital segment of the health care market, and the ACA relies on this group purchasing coverage in order to establish a pool of healthy individuals to keep plans on the public exchanges affordable.
There has been much worry that young people won’t buy coverage at all, and will opt to pay the fine for not having coverage, as opposed to spending more to buy plans on the exchanges. But a new Kaiser poll shows that this might not be the case. The Kaiser Family Foundation’s June Health Tracking Poll found that 77% of adults 18-25 and 71% of adults 26-30 said that having health insurance was “very important.”
Contrary to the assumption that young people see themselves as “invincible,” only about one quarter of people age 18-30 say they were healthy enough to forgo health care coverage.
While a majority of the young people surveyed do display the desire for coverage, they do not necessarily think that it is affordable. Compared to the 71% who think insurance is very important, only 65% of people ages 26-30 say that health coverage is worth the cost. This is the group of young people who have just left their parent’s plans and are looking to purchase coverage independently, although this group may want health care, cost will definitely play into their decision making process.
But it’s not only young people who are concerned about price. Older participants showed similar results when asked if health insurance was worth the cost, with only 68% of respondents in all age groups confirming that health insurance was worth it.
The Kaiser poll focused on age-specific questions, and it is clear that actions surrounding health care and insurance vary based on age. This survey paints a new picture that says young people may be more willing to purchase insurance than previously thought.
Read more about the Kaiser Family Foundation Poll Here: More young adults see health insurance as a necessity