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by Leila Morris
HEALTHCARE
• Obamacare Could Hurt Democratic Candidates
• Consumers Say Their Health Plans Fall Short on Coverage
• Consumers Are in the Dark About Health Care Options
• Proposed Medicare Part D Rule Would Increase Medicare Costs
• Majority of Uninsured Plan to Get Insurance
• Health Care Reform Is Triggering Benefit Changes
• NAHU Wants the Federal Exchange to be More Broker Friendly
• NAHU Member Testifies on the Health Insurance Tax
• Health Reform Update Summary – Week of March 3, 2014
IN CALIFORNIA
• Los Angeles Health Underwriters Gets Recognition
• Obamacare Investment Fund
• Blue Shield Teams Up On ACA
NEW PRODUCTS
• Hybrid Life/LTC Policy
• Group Life Coverage
FINANCIAL PLANNING
• Ameritas Partners with Women in Insurance & Financial Services
HEALTHCARE
Obamacare Could Hurt Democratic Candidates
Nagging concerns over the Affordable Care Act appear likely to cost the Democratic Party during the 2014 congressional elections, according to the latest survey by Robert Morris University. Forty percent of Americans surveyed said they are somewhat or much less likely to support a candidate that supported or voted for Obamacare than those (32.5%) indicating they would be somewhat or much more likely to support a candidate who supported or voted for the Act.
RMU political scientist Philip Harold said, “What really jumps out here is gender and marital status. Among likely voters in this poll, women are driving the opposition to Obamacare. Male likely voters are actually in favor of Obamacare.”
Forty-four percent of likely male voters said they would be more likely to vote for a member of Congress who voted for The Affordable Care Act, versus 39.2% who would be less likely. Forty-five percent of likely female voters said they are more likely to vote against a pro-Obamacare candidate versus 29.1% who would vote for an Obamacare supporter. Married women have the strongest antipathy to the Affordable Care Act, opposing it 50.3% to 24.2%.
The poll of 1,006 American adults also found that former Florida Gov. Jeb Bush and former Secretary of State Hillary Clinton are the early favorites for their party’s presidential nominations in 2016.
Among likely voters who are Republicans, the leading contenders for the Republican nomination for president are former Florida Governor Jeb Bush, Florida Senator Marco Rubio, Wisconsin Congressman Paul Ryan, Kentucky Senator Rand Paul, Texas Senator Ted Cruz and New Jersey Governor Chris Christie (in declining order). Among likely voters who are Democrats, the leading contenders for the Democratic nomination for president are former Secretary of State Hillary Clinton, Vice President Joe Biden, New York Governor Andrew Cuomo, and Massachusetts Senator Elizabeth Warren (in declining order). For more information, visit http://www.rmu.edu.
Consumers Say Their Health Plans Fall Short on Coverage
Forty-one percent of consumers say that their health plan does not offer enough coverage for routine visits, serious illness or injury, health and wellness programs, routine diagnostics, or drug coverage. Concerns over not having enough health coverage reduces satisfaction by 133 points, more than any other coverage-related issue, according to the J.D. Power 2014 Member Health Plan Study. The study also reveals the following:
• 55% have experienced a cost increase in 2013, which has reduced cost satisfaction.
• 35% received a notice of changes in their coverage, networks, or rates from their health plan in the past 12 months.
• 74% maintained their preferred physician, and 83% retained their same hospital network.
• 75% submitted a claim in the past 12 months.
• The average monthly premium in 2013 was $285.
• 49% say their plan does not offer the most common types of health and wellness discount/incentive programs.
“On average, members wait eight days for communication from their provider after a pre-approval request has been submitted. Health plans must look for ways to promptly communicate pre-approvals and cost in order to minimize member anxiety and mitigate concerns about access to care, ultimately increasing customer satisfaction,” said Rick Johnson, senior director of the healthcare practice at J.D. Power.
Satisfaction is highest among health plan members in California and Michigan. Kaiser Foundation Health Plan ranks highest among health plan members in the California region for a seventh consecutive year, with a score of 756. No other plans in this region perform above the region average. For more information, visit http://www.jdpower.com/about/index.htm
Consumers Are in the Dark about Health Care Options
With the March 31s open enrollment deadline looming for the exchanges, many consumers still don’t have basic knowledge of insurance costs, services (including prescription coverage), and penalties for remaining uninsured, according to a study by Phoenix Healthcare. Steve Wakefield, president of Phoenix Healthcare said that consumers’ lack of awareness gives pharmaceutical companies and insurers the opportunity to market and educate the uninsured and newly insured so that they become more informed and healthier consumers. “One thing is clear; the organization that properly educates the consumer has the best chance at winning their business,” he said. The study reveals the following:
• 50% of the uninsured have not looked into what it would cost to get health insurance.
• Most of the uninsured are not aware of the free services they would get with new insurance; only half are aware that some prescription medications are free under the ACA.
• When informed about coverage options and the tax penalty, 67% of the uninsured say they are more likely to purchase health insurance this year than pay the penalty.
• While about 35% of the U.S. population suffers from diabetes or pre-diabetes, only 7% of the uninsured surveyed are treated for this potentially life-threatening condition.
For more information, visit http://phoenixmi.com.
Proposed Medicare Part D Rule Would Increase Medicare Costs
Eliminating preferred pharmacy networks in Medicare Part D would increase premiums by about $63 annually for over 75% of Part D enrollees. It would also raise program costs by $24 billion over the next 10 years, according an actuarial study by The Pharmaceutical Care Management Association (PCMA). “CMS’ proposal to eliminate preferred pharmacy networks will make it harder and more expensive for seniors to access prescription drugs,” said PCMA president and CEO Mark Merritt.
The study examines the sections of CMS’ proposed rule on preferred pharmacy networks. More than 75% of Part D beneficiaries are enrolled in plans that feature preferred pharmacy networks.
Key findings from the study include the following:
• As of February 2014, more than 75% of prescription drug plans (PDP) enrollees are in plans with preferred pharmacy networks; these enrollees could be adversely affected by the elimination of plans utilizing preferred pharmacy networks.
• The preferred pharmacy networks provision would increase premiums for the affected population by an average of about $63 per year for the 2015 plan year.
• The rule could increase cost sharing among PDP enrollees by an average of $80 to $100 per year.
• Since the rule would inflate the national average benchmark for Part D plans, CMS would pay an additional $64 in direct subsidies per beneficiary, per year in 2015, for a total increased payment of nearly $1.5 billion in 2015 across all PDP enrollees (based on Part D enrollment of about 23 million beneficiaries).
• Over a 10-year period, the increased cost of eliminating preferred pharmacy networks is estimated to be about $990 per affected enrollee, and the cost would be about $24 billion to CMS in the form of higher direct subsidy payments.
In addition, a recent poll found that seniors in plans with preferred pharmacy networks are overwhelmingly satisfied, citing lower costs and convenient access to pharmacies and other benefits, according to a survey from Hart Research Associates. The survey found that 85% of seniors surveyed are satisfied with their preferred network plan. In addition, the survey found that four in five seniors would be disappointed if their preferred network plan is eliminated.
Majority of Uninsured Plan to Get Insurance
Fifty-five percent of uninsured Americans would buy insurance rather than pay a fine, according to a Gallup poll in February. That’s similar to January’s results, but down from as high as 63% last Fall. As some previously uninsured Americans move into the insured pool, the remaining uninsured have shown the most reluctance to get insurance. This helps explain why the percentage of uninsured Americans who say they intend to buy insurance has dropped in the most recent months.
At the same time, American attitudes toward the ACA remain negative, which may suggest that some uninsured Americans’ reluctance to get insurance reflects their dislike of the ACA and the law’s requirements. Other uninsured Americans may simply have become more hardened over time in their negative attitudes toward the prospect of getting insurance.
Still, the possibility that more than half of Americans who remain uninsured say they will purchase health insurance offers some positive news for supporters of Obamacare. It also suggests that the number of uninsured Americans may continue to decline as the March 31 deadline approaches, after which they will have to pay a fine if they don’t have insurance.
More than half of the uninsured who plan to get insurance say they will get it from an exchange, a percentage that has been higher this year than in the last three months of 2013. Still, the news on the exchange front is not all positive. Uninsured Americans who have visited an exchange are about twice as likely to rate their experience negatively as positively, similar to their ratings last fall. Some people who had positive experiences with the exchanges in past months likely got insurance, and therefore are no longer included in the uninsured pool in Gallup’s ongoing tracking. Still, the fact that only a third of the uninsured in February who visited the exchanges had a positive experience suggests that significant problems remain despite the Obama administration’s massive effort to fix issues with the federal exchange website.
The majority of those who plan to get insurance say they will do it through a state or federal health insurance exchange, although to date, the uninsured evaluate the experiences they have had with the exchanges quite negatively. Exchange activity may pick up in the coming weeks as the government’s March 31 deadline for having insurance approaches. Once that deadline passes, it may be clearer how much progress the Obama administration’s efforts to expand health insurance have made. For more information visit www.gallup.com.
Health Care Reform Is Triggering Benefit Changes
With Affordable Care Act deadlines imminent in 2014 and 2015, employers are saying the increased effect of health care reform on various aspects of employee benefits, according to a Prudential survey. Vishal Jain of Prudential said, “The Affordable Care Act could…usher in a new …emphasis on voluntary benefits. More employers are utilizing them for recruiting and retaining talent and employees increasingly view them as a cost-effective way to protect their family’s financial future.” With a shifting benefit landscape, carriers are now focused on being a trusted resource for employers while offering a full spectrum of services such as enrollment communications, benefit education, record keeping, and administrative services,” Jain said.
The survey reveals the following about employers:
• 49% say they are extremely or very likely to make a high-deductible health plan their only health insurance option.
• 73% say the law is having an effect on benefit service and support and 69% say there is an effect on benefit communications.
The survey reveals the following about employees:
• They are increasingly confident that more Americans will be covered under the Affordable Care Act (43%, up 7% from 2012).
• An expanding number say fewer employers will offer health insurance (44%, a 13% increase from 2012), and 38% of those employees believe their employer will drop coverage.
• About one-third have heard of but know little about public or private exchanges.
For more information, visit http://www.news.prudential.com.
NAHU Wants the Federal Exchange to be More Broker Friendly
Representatives John Carney (D-DE) and Charlie Dent (R-PA), along with 73 more members of Congress, sent a letter to the Department of Health and Human Services Secretary Kathleen Sebelius, calling for several improvements to the Federal Healthcare Exchange website. Janet Trautwein, CEO of the National Association of Health Underwriters, said, “The letter asks the administration to set up a hotline for agents and brokers with problem cases, implement an application edit function, and allow brokers and agents to enter their national producer number so all applications they administer can be tracked. These three simple fixes would make a world of difference for the nation’s agents, brokers and consumers. While the administration has taken steps to resolve the obvious consumer issues with healthcare.gov, the backend issues that are meant to protect people and families seeking coverage and give them access to licensed, experienced insurance agents continue to be riddled with problems. Marketplace-certified health insurance agents and brokers act as consumer advocates and educational resources for people and small businesses enrolling in marketplace-based coverage, and being able to do their job means the millions of Americans they represent can be assured their healthcare coverage will be what they need, when they need it most. Fortunately, there’s a free new tool that empowers consumers and businesses to find an agent in their area and thereby take advantage of their cost-saving expertise: agent-finder.org.” For more information, visit www.nahu.org.
NAHU Member Testifies on the Health Insurance Tax
Alan Schulman, a Maryland-based health insurance agent member of NAHU, presented testimony to the House Committee on Small Business Subcommittee on Contracting and Workforce at a hearing on the effect of the Affordable Care Act on the self-employed.
A big and unexpected change for small employers is the cost of modified community rating and the new national health insurance premium tax, or the HIT, stated Schulman. There are some bipartisan bills to fix these cost-drivers, including H.R. 763 to repeal the HIT and H.R. 544 to fix the law’s very narrow age bands. However, the way HHS has implemented the age bands is causing a separate big problem for very small employers too, he said.
Before health reform, rates did reflect the ages of all the employees in a group, but employers and employees never felt the breakdown because they always got a ‘composite rate,’ so all employees were charged the same average price. Composite rates were an administrative convenience and an important protection against age discrimination. Now, due to the way the age band rules were written by HHS, it’s virtually impossible for a carrier to give an employer a composite rate.
Last month, I shopped for a group plan by looking at all of the health plan options available in the state. The best scenario for fully insured group coverage had a rate of about $325 a month for the youngest employee and over $900 a month for the oldest. Naturally the employer was extremely distressed, and not just about the increased costs. The idea of explaining to the older employees how much more they will have to pay is unsettling, and my client was worried about legal costs should an employee file a complaint. For more information, visit nahu.org.
Health Reform Update Summary – Week of March 3, 2014
In this week’s Patient Services, Inc. (PSI) Health Reform Update, the Obama Administration further delays key Affordable Care Act (ACA) provisions. States can now extend ACA-deficient individual health plans until 2017 and the employee choice option under small business Marketplaces until 2016.
The Senate Finance Committee has upped the pressure on the Centers for Medicare and Medicaid Services (CMS) not to finalize controversial Medicare Part D changes. CMS did finalize rules this week for the ACA’s delayed Basic Health Plan option, though most states remain uninterested.
Conservatives in the Arkansas House formally renewed that state’s private sector alternative to the ACA’s Medicaid expansion, after holding out for concessions. New Hampshire Senate conservatives dropped their opposition this week to a comparable alternative. For the second time, CMS rejected a partial expansion alternative sought by South Dakota. For more informtormation, visit patientservicesinc.org.
IN CALIFORNIA
Los Angeles Health Underwriters Gets Recognition
Los Angeles Health Underwriters received Gold Certification from NAHU’s Chapter Certification Program, which is an ongoing program that recognizes excelling chapters throughout the calendar year. “We are grateful for LAAHU’s hard work with chapter development and recognize them for their efforts with this well-deserved award,” said NAHU CEO Janet Trautwein.
LAAHU president, Dede Kennedy-Simington said, “LAAHU exemplifies the dedication to providing the best opportunities for our members through their dedication to chapter development. This year, LAAHU organized multiple events in our local community. As many members are Certified Insurance Agents for Covered California we continue to reach out by hosting a variety of community events to assist consumers in the purchase of health insurance. LAAHU is one of the largest chapters in NAHU. These projects and many others have set a standard of excellence in the health insurance industry that we are proud to represent.”
Obamacare Investment Fund
Los Angeles-based fund manager Osprey Real Estate Capital is offering The Doctors Funds, which will invest directly into retail and hospitality properties and have been developed in response to The Affordable Care Act. For more information, visit ospreyrec.com or call 310-274-6726.
Blue Shield Teams up on ACA
Blue Shield of California and EPIC Health Plan announced a two-year accountable care initiative to provide integrated, cost-efficient care to Blue Shield HMO members in the Inland Empire. The accountable care organization (ACO) will include six medical groups managed by EPIC Management, L.P., and will provide coordinated care for about 27,300 members. Approximately 7,000 of these enrollees are members of the California Public Employees’ Retirement System (CalPERS), while an additional 7,500 are employees of the County of San Bernardino. The organizations expect this collaboration to result in decreased healthcare cost trends for these members during the two years of the collaboration. For more information, visit www.blueshieldca.com.
NEW PRODUCTS
Hybrid Life/LTC Policy
Lincoln Financial Group launched Lincoln MoneyGuard II, the next-generation of its hybrid life-long term care (LTC) funding solution. It provides income-tax–free reimbursements for qualified long-term care expenses, an income-tax-free death benefit if care is not needed, or return of premium options. For more information, visit www.LincolnFinancial.com.
Group Life Coverage
OneAmerica is offering its flagship individual whole life coverage to employees at the worksite issued by American United Life Insurance Company (AUL), a OneAmerica company. With guaranteed issue underwriting and a competitive group rate, Legacy offers permanent life protection with features that employees would not be able to get on their own. In addition to providing a guaranteed death benefit, premiums that never increase and cash value growth, employees can potentially earn dividends with Legacy. For more information, visit oneamerica.com.
FINANCIAL PLANNING
Ameritas Partners with Women in Insurance & Financial Services
Ameritas has partnered with Women in Insurance & Financial Services as an Ambassador-level Partner for Excellence. In addition to Ameritas, 2014 Partners for Excellence include New York Life as a Leadership Partner; Guardian, MetLife and Prudential as Executive Partners as well as Ambassador Partners Lincoln Financial Group, Penn Mutual and Mutual of Omaha. The relationship these organizations have with WIFS speaks to a dedication and commitment toward promoting the career success of women. For more information, visit www.wifsnational.org.