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by Leila Morris
HEALTHCARE
• HHS Releases Substance Abuse Parity Rules
• Washington State Comes Out Ahead with its Health Exchange
• 50% of Calif. Voters Support ACA, but Some Wary of its Effects
• Medicare Recipients Unaware of Important Deadlines
• Webinar Explains Tax Advantages of Micro Defined Benefit Plans
• The Fallout of Cutting Health Benefits
• ACA Enrollment Extension Could Dent Insurance Industry
IN CALIFORNIA
• Court Rules On Payment of Medical Services
• Covered California Issues Progress Report
• Anthem Will Delay Some Individual Policy Cancellations
• Many Californians Expected to Remain Uninsured
• Alameda Alliance Suspended From Insurance Exchange
NEW PRODUCTS
• Hospital Performance Index
• Health Exchange Services
• Life Policy with Grief Counseling
• Seminars for Seniors
HEALTHCARE
HHS Releases Substance Abuse Parity Rules
The Departments of Health and Human Services, Labor and the Treasury issued a final rule that increases parity between mental health/substance use benefits and medical/surgical benefits in group and individual health plans.
Under the final rule, co-pays, deductibles, and visit limits cannot be generally no more restrictive for mental health/substance abuse disorders benefits than they are for medical/surgical benefits.
The rule also includes these consumer protections:
• Ensures that parity applies to intermediate levels of care in residential treatment or intensive outpatient settings.
• Clarifies how much transparency health plans must have, including disclosing the rights of plan participants.
• Clarifies that parity applies to all plan standards, including geographic limits, facility-type limits, and network adequacy.
• Eliminates a provision that allowed insurance companies to make an exception to parity requirements for certain benefits based on “clinically appropriate standards of care.” Clinical experts have said that this exception was not necessary, was confusing, and was open to abuse.
In January, as part of the President and Vice President’s plan to reduce gun violence, the Administration committed to finalize this rule as part of a larger effort to increase access to affordable mental health services and reduce the misinformation associated with mental illness.
Washington State Comes Out Ahead with its Health Exchange
An article featured in www.politico.com looks at how well state exchanges are running. On the Obamacare racetrack, Washington, Kentucky, and New York are leading the pack. Relatively free of the technical problems that have plagued the federally run insurance exchanges, some states are charging ahead on enrollment while others have run up against roadblocks.
The leader on enrollments, so far is Washington state, with nearly 49,000 enrollees in exchange plans and Medicaid. The state has been a leader in setting up its exchange all along, and officials say the swell of enrollments has allowed them to identify the biggest website problems early on.
“The problems have ranged from error codes to difficulties reconciling state tax records with the federal government,” said Washington exchange spokesman Michael Marchand. Those problems are being fixed through regular overnight weekend maintenance, which will most likely continue through the beginning of December, he said.
Enrollment is also humming along in New York and Kentucky. More than 37,000 have enrolled in N.Y. State of Health and 31,500 have signed up through Kynect, the Kentucky exchange. It’s moving a little slower in California, Colorado, and Connecticut, where the websites are basically working, but still experiencing some glitches, according to politico.com. In California, there have been delays in authorizing enrollment counselors, which has slowed down the process for some residents who want help in-person.
In some states, glitches have been so severe that officials have been forced to postpone deadlines. The Hawaii exchange opened two weeks late and crashed when people started visiting it. But it’s been up and running since then. Vermont Gov. Peter Shumlin announced last week that residents can stay on their existing plans through March 31 because of the exchange’s technical problems. That exchange depended on the same lead contractor as the troubled federal one. Oregon’s exchange is still so spotty that Gov. John Kitzhaber urged residents to enroll using paper applications. Officials are not sure whether it will be fully operational by Dec. 15 – the deadline to sign up to be covered by Jan. 1. Oregon had embraced the president’s health law early and enthusiastically.
Tose watching the exchanges warn against scoring them too early, stressing that open enrollment lasts for another five months. For more information, visit http://www.politico.com/story/2013/11/state-health-care-exchanges-mixed-results-obamacare-affordable-care-act-99346.html#ixzz2kUNmlMn5
50% of CA Voters Support ACA, but Some Wary of Its Effects
Half of California residents support the Affordable Care Act, but many still have doubts about how it will affect health care costs and the economy, according to a recent survey by University of Southern California. Forty-two percent oppose the law in California compared to national polls that find that a majority of respondents oppose it.
The report also reveals the following:
• 44% of respondents in the individual market support the law, and 49% oppose it.
• 48% of uninsured respondents support the law, and 45% oppose it.
• Latinos support the law by a two to one margin.
• 49% of whites oppose the law, and 44% support it.
• 77% of Democrats support the law, and 80% of Republicans oppose it.
In addition:
• 67% of respondents say patients will have more access to physicians and preventive care under the law.
• 65% say the ACA will decrease the number of uninsured.
• 65% say that individuals will have trouble affording coverage under the ACA.
• Nearly 60% say the law will increase health care costs and reduce hiring.
• 46% say the law will hurt the economy while 34% say it will boost the economy.
The survey also finds that 90% of respondents are happy with their health coverage.
Forty-two percent say they don’t have enough information on the law, including 50% of Latinos.
Medicare Recipients Unaware of Important Deadlines
A HealthPocket survey finds that 78% of Medicare beneficiaries don’t know when open enrollment ends. Thirty-three percent said that Medicare’s annual enrollment period ends December 31; 26% said it ends December 1; 19% said it ends December 15. Only 22% answered correctly that it ends December 7.
Medicare’s annual enrollment period runs from October 15 to December 7. These dates have been in effect since the fall of 2011. During this time, Medicare enrollees can change their coverage, including moving from one Medicare Advantage or Part D prescription drug plan to another. However, this year’s Medicare annual enrollment also overlaps with the highly publicized open enrollment for the Obamacare insurance marketplaces, which begins on October 1 and ends on March 31. “With so much public attention on Healthcare.gov, seniors may be getting lost in the shuffle,” said Steve Zaleznick, executive director for Consumer Strategy and Development of HealthPocket. For more information, visit www.HealthPocket.com.
Webinar On Tax Advantages of Micro Defined Benefit Plans
Dedicated Benefit Services is holding a free Webinar on micro defined benefit plans on Friday November 15 at 10:00 to 11:00 Pacific Time. For more information, visit http://marketing.dedicated-db.com/acton/form/2928/0039:d-0002/0/index.htm?id=0039 or call 866-269-2706.
The Fallout of Cutting Health Benefits
Thirty-five percent of workers would look for another job if their employer discontinued their health benefits without offering money to help them buy health insurance on their own, according to a survey by TNS. Also, 24% would still hit the want ads even if their employer offered some funding. Twenty-five percent would look for other work if their employers passed the costs onto them in the form of higher premiums or deductibles.
William Bruno, Vice President at TNS said, “With the ACA providing new health plan alternatives that are not employer dependent, some employees may be…more likely to move to a new employer when their current health plan becomes less desirable. The situation provides a great opportunity for employers, with the help of their benefit consultants and health insurance carriers, to stay well ahead of the curve on communicating with employees about the health insurance plans offered and advantages relative to the new alternatives.” For more information visit www.tnsglobal.com.
ACA Enrollment Extension Could Dent Insurance Industry
Extending the enrollment period for Americans seeking health coverage under the Affordable Care Act could mean pricing and logistical implications for health insurers, according to Fitch Ratings. According to the Fitch report, “We believe an extension would be a negative for health insurers. Pressure on insurers to extend existing policies is likely less problematic than extending the enrollment period. The current deadline for enrollment is March 31, 2014, although plans will take effect on Jan. 1 for those who sign up earlier.
An extension could increase the number of people who wait until they need healthcare to buy the insurance. The open enrollment period for health insurance plans offered in the insurance exchanges began on Oct. 1 and the process has been plagued with technical problems on websites including www.healthcare.gov.
Allowing more time would also create logistical issues with pricing and state participation, which could raise short-term risk for insurers.
Under normal circumstances, insurers set premium rates before the enrollment period based on cost-of-care estimates. When the enrollment period is lengthened, these estimates may no longer be as accurate.
Some state regulators are encouraging insurers to extend existing policies for three months beyond their Jan. 1, 2014 expiration date due to technological problems with exchange websites. Fitch says that this would be less problematic for health insurers than extending the current enrollment period as long as benefits and premiums on the extended policies don’t change from current levels and the extension is effective for a relatively short period.
Nevertheless, such extensions could result in a short-term increase in risk levels of business sourced through the exchanges. Consumers whose policies are extended are likely to have better risk profiles compared to early users of exchange-sourced insurance. The extension could hurt the financial results of insurers whose enrollment is weighted disproportionally toward exchange business.
Fitch also says that an extension would delay the positive benefits that hospitals would see as a result of health reform including higher patient volumes and lower bad debt expenses for treating the uninsured. For more information, visit www.fitchratings.com.
IN CALIFORNIA
Court Rules On Payment of Medical Services
Tran Liang & Wang LLP blocked a plaintiff’s attempt to compel arbitration against a defendant who was not a party to the arbitration agreement. The firm represented the City of Long Beach in an action brought by Promise Hospital of East Los Angeles. The Hospital alleged that CIGNA and the City failed to pay for medical services that it provided to a City employee under the City’s health plan. (Promise Hospital of East Los Angeles, L.P. v. Cigna Corporation et. al., Case No. B243126). The Hospital argued that it could compel arbitration against the City, even though the City was not a party to the agreement containing the arbitration provision, which was entered into by the Hospital and CIGNA. The trial court ruled that the arbitration provision was not enforceable against the City, and the Court of Appeal affirmed. The Court’s detailed opinion adopted all of the firm’s arguments, holding that none of the grounds to compel a non-signatory to an arbitration provision applied in this case. Namely, the Court ruled that: 1) the City was not a third-party beneficiary; there were no grounds for direct-benefits; and CIGNA was not the City’s authorized agent for purposes of agreeing to arbitration. A contrary ruling could have had far-reaching effects for companies and individuals seeking to exercise their constitutional right to a jury trial. For more information, visit www.ltlw.com.
Covered California Issues Progress Report
Covered California released its fiscal year 2012 to 2013 annual “Report to the Governor and the Legislature,” detailing its progress to implement the federal Patient Protection and Affordable Care Act in California.
Enrollment in Covered California began on Oct. 1 for health coverage starting Jan. 1, 2014. Covered California, working in partnership with the California Department of Health Care Services, projects that by January 2015, more than 1 million Californians will enroll using federal subsidies, and another 1 million will be new to Medi-Cal. In addition, Covered California projects that more than 1.7 million Californians will benefit from the new insurance rules and get coverage without a subsidy – some purchasing through Covered California, and some on the individual market.
Initial Covered California marketing efforts began in September 2013 in advance of the Oct. 1, 2013, open-enrollment date. Community organizations have also begun mobilizing to educate individuals who need insurance. And on Oct. 1, Covered California started a broad marketing campaign that will go through 2014.
Anthem Will Delay Some Individual Policy Cancellations
Californians have seen 1 million insurance cancellation notices. But a small subset is getting a reprieve. Anthem Blue Cross will delay the December 31 policy cancellations for 104,000 California consumers covered by individual and family (non-grandfathered) policies.
Anthem had informed Insurance Commissioner Dave Jones that, because of a computer glitch, 104,000 policyholders had not received 90 days’ notice of cancellation as required by law. Jones asked Anthem to send out new notices to the policyholders and give them the option to extend their policies with their doctors and hospitals at the same rates until February 28. Anthem will mail out new notices by November 15. If all 104,000 policyholders chose to keep their existing coverage through February 28th, they would save an estimated $23 million from Anthem’s 2014 rates. Policyholders must notify Anthem Blue Cross by December 15 if they want to keep their existing policies through February.
Commissioner Jones said, “Neither state nor federal law allows me to stop the 1 million cancellation notices sent to Californians, despite my opposition to these cancellations. We will, however, do everything within our power to extend existing policies where health insurers are not in full compliance with notice requirements.”
Many Californians Expected to Remain Uninsured
Despite the Affordable Care Act (ACA), over 3 million Californians will remain uninsured, according to a study by Health Access. The study also reveals that California has an uneven safety net for the uninsured; and the safety net could get more uneven depending on county actions in the next few months.
“The Affordable Care Act will dramatically cut the number of uninsured, but there’s more that needs to be done at the state and county level to include everyone and improve our health system as whole. We want to spotlight those counties that are stepping up to ensure access and afford basic care,” said Anthony Wright, Executive Director of Health Access.
The report recommends support for efforts to enroll eligible populations into Covered California plans and Medi-Cal. Health Access also says that county governments should hold off on reducing any services until they get a year of information on what is available. For more information, visit www.health-access.org.
Alameda Alliance Suspended From Insurance Exchange
Covered California is dropping one of its 12 health plans – Alameda Alliance for Health. Alameda Alliance did not get approval from the state Department of Managed Health Care in time to sell health coverage in the commercial market. Covered California notified Alameda Alliance in mid-October that it needed a state-issued license to sell health coverage and set a deadline of Oct. 31.
Covered California has informed prospective enrollees that they need to sign up for another plan. However, Covered California doesn’t expect any impact on coverage in the Alameda County region since residents can choose from a mix of plans from Anthem, Blue Shield, and Kaiser Permanente, which serve nine hospitals in the region. Also, removing Alameda Alliance from the exchange portfolio will not affect the calculation of federal subsidies.
The plan is not being excluded permanently. California will retain its contract with Alameda Alliance and will continue to work with the state and the company to fulfill the requirements to modify its license. Covered California executive director Peter V. Lee said, “Alameda Alliance has a solid provider network and is a valuable asset to the community. We look forward to the company getting its commercial license, so we can welcome its plans back to the exchange.” Also, the exclusion does not affect Alameda Alliance’s license as a Medi-Cal managed care plan provider. Covered
NEW PRODUCTS
Hospital Performance Index
Milliman launched its next generation Hospital Performance Index software. The benchmarking tool identifies opportunities for increased efficiency in patient populations. The enhanced product is designed to fit the needs of accountable-care organizations by identifying instances when care management can improve quality and increase efficiency. For more information, visit http://us.milliman.com/hpi.
Health Exchange Services
HealthPlanOne is adding its “Employer Solutions” offering to its portfolio of services. Employer Solutions is a private healthcare exchange targeted to employers that are transitioning retirees from a traditional group medical plan to a defined contribution approach. Employer Solutions contains enhanced communication and educational materials, expanded decision-making tools, HRA administration services, and reporting. It meets the needs of Medicare-eligible and pre-Medicare retirees and is available in all 50 states. HealthPlanOne partners with brokers and benefit consultants. For more information, e-mail brokers@healthplanone.com.
Life Policy with Grief Counseling
MetLife is now offering grief-counseling services on its basic group life insurance programs. Employees get access to licensed professional counselors and related services. The services will be available January 1, 2014, subject to state availability, for new and existing customers, at no additional cost to the employer or employee. Employees and their dependents can consult with a highly credentialed counselor up to five times per event. For more information, visit https://www.metlife.com.
Seminars for Seniors
Medicare beneficiaries can now search kp.org/medicare to find Kaiser Permanente Medicare seminars in their area