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by Leila Morris
HEALTHCARE
• The Top 10 Medical Services Plans That Don’t Cover
• Obamacare Presents Complex Choices For People With Disabilities
• Consumers Want Tax-Free Insurance Premiums, Just Like Businesses
• Co-Pay Assistance Fund Helps With Cancer Care
• Employer-Sponsored Family Health Premiums Rise 4%
LONG TERM CARE
• LTC Puts a Financial Strain on Caregivers
DISABILITY
• Financial Effects of Disability Expected to Grow
IN CALIFORNIA
• Covered California Board Meets Tomorrow
• Beverly Hills Hotel is Ordered to Pay Benefits
• Watchdog Sues Blue Cross Over Deductibles
• Half of California Voters Can’t Afford Health Care
NEW PRODUCTS
• Health Reform Guidance for Employers
• Electronic App Submissions for Life Policies • Exchange Notification App
LIFE INSURANCE
• Consistency Is Key for Small Life & Annuity Companies
HEALTHCARE
The Top 10 Medical Services Plans That Don’t Cover
A report by HealthPocket finds significant consistency in the health care services that individual and family health insurance carriers don’t cover. The following are the top 10:
1. 98% don’t cover long-term care.
2. 98% don’t cover cosmetic surgery.
3. 94% don’t cover infertility treatment.
4. 93% don’t cover weight loss programs.
5. 92% don’t cover private nursing.
6. 92% don’t cover acupuncture.
7. 92% don’t cover children’s dental check-ups.
8. 90% don’t cover weight loss surgery.
9. 87% don’t cover children’s eyeglasses.
10. 81% don’t cover adult dental services.
The Essential Health Benefits under the Affordable Care Act (ACA or Obamacare) will improve access to children’s dental check-up and children’s eyeglasses.
Weight management programs and weight loss surgery are routinely not covered in the health insurance market even though one third of U.S. adults are obese. ACA requirements will ensure coverage of weight loss diagnosis and counseling, but insurers may continue to refuse payment for surgical interventions and enrollment in third party programs, such as Weight Watchers.The exclusion of insurance coverage for infertility treatments can make the procedures inaccessible for many Americans. The average cost of a treatment cycle is $12,400, and multiple cycles are often needed for success.
Since most of the medical service exclusions within the Top 10 list can continue after the implementation of health reform, it is vital that consumers examine their benefit coverage options closely when they shop for health insurance this October, says Kev Coleman, head of Research and Data at HealthPocket. In addition, coverage for hospital deliveries (67%) as well as prenatal and postnatal care (64%) are frequently excluded services. These medical procedures, which are included in the Essential Health Benefits, will get greater coverage because of the ACA.
Obamacare Presents Complex Choices for People with Disabilities
by Eric Whitney, CPR
Reprinted, in part, with permission by www.kaiserhealthnews.org.
The Affordable Care Act has set new standards – called essential health benefits — outlining what health insurance companies must now cover. But there’s a catch: Insurance firms can still pick and choose to some degree which therapies they’ll cover within some categories of benefit. And the way insurers interpret the rules could turn out to be a big deal for people with disabilities who need ongoing therapy to improve their day-to-day lives.
Health economist Lisa Clemans-Cope with the Urban Institute says, “You’re much more likely to find these benefits in a plan in the individual market [starting in 2014] than you would be.” This is because habilitative services are included within the 10 categories of essential health benefits the ACA will require in those new plans. Still, while some categories are straightforward, such as maternity care and preventive care, the category including habilitative services leaves more room for interpretation. For instance, insurers could choose to cover physical therapy for someone with a broken bone, but not cover long-term support services for chronic conditions, such as speech therapy for kids with developmental delays.
Clemans-Cope says some insurers may arrange their benefits in a way that discourages people with expensive chronic conditions from signing up with them. And, she says, people who want to have therapies covered are going to have to slog through some fine print to figure out if they’ll actually benefit from a particular policy. (The new policies will start to go on sale this fall and go into effect beginning Jan. 1, 2014.) This is a big improvement, but we should emphasize that it’s not totally fixed. And people are really going to have to get help to decide which plans cover the benefits they need, she said.
Whether a person will be able to get the new therapy benefits also depends on where they live. The level of benefits insurers have to provide in each category is based on a model policy in each state, and some of those model policies are a lot more generous than others. Jill Tappert, an activist in Colorado for people with disabilities, says a lot of details still need to be sorted out before she’ll be able to say whether the health care law has improved things much. I certainly hope the way the Affordable Care Act is implemented is a game changer for people in the disabilities community. It can be, says Tappert, who spent years fighting for habilitative service coverage for her daughter who has autism. The opportunity is there for policy makers to vastly improve lives.
Consumers Want Tax-Free Insurance Premiums, Just Like Businesses
Forty-seven percent of Americans surveyed by HealthPocket said individual health insurance premiums should be tax-free, just as they are when employers buy it for their workers.
Bruce Telkamp, CEO of HealthPocket said, “With the administration’s decision to delay the employer mandate, more employed people will enter a reformed individual market in 2014. They will experience an unfavorable tax environment compared with coverage paid by their employer.”
Those buying insurance on their own can’t take advantage of the same tax advantages that businesses get. However, the self-employed can treat themselves as employers by deducting health insurance premiums from taxable income under the following circumstances:
They made a profit for the year, and they were not eligible to enroll in a health plan provided by a former employer, spouse’s employer, or former spouse’s employer.
For others, privately purchased health insurance is paid with after-tax dollars except for any premium amount that exceeds 10% of adjusted gross income for the year. For more information, visit www.HealthPocket.com.
Co-Pay Assistance Fund Helps with Cancer Care
The Leukemia & Lymphoma Society (LLS) has raised more than $200 million for its Co-Pay Assistance Program since 2007. The program provides support for prescription drug co-pays and health insurance premiums for blood cancer patients who meet certain income requirements. Those eligible are patients with private insurance, Medicare Part B and/or Medicare Plan D, Medicare Supplementary Health Insurance, and Medicare Advantage plans. To date, LLS has helped about 36,000 patients through the co-pay program. For more information, visit www.lls.org/copay or call 877-LLS-COPAY.
Employer-Sponsored Family Health Premiums Rise 4%
Annual premiums for employer-sponsored family health coverage reached $16,351 this year, up 4% from last year, with workers paying an average of $4,565 toward the cost of coverage, according to a survey by the Kaiser Family Foundation/Health Research & Educational Trust (HRET). During the same period, wages were up 1.8% and general inflation was up 1.1%.
Kaiser president and CEO Drew Altman, Ph.D., said, “This year’s rise in premiums remains moderate by historical standards. Since 2003, premiums have increased 80%, nearly three times as fast as wages (31%) and inflation (27%). We are in a prolonged period of moderation in premiums, which should create some breathing room for the private sector to try to reduce costs without cutting back benefits for workers.”
The survey reveals that firms with many lower-wage workers (at least 35% earning $23,000 or less annually) require workers to pay an average of $1,363 more toward family premiums than workers at firms with fewer lower-wage workers ($5,818 versus $4,455 annually). The lower-wage firms offer less costly coverage too, creating a large disparity in the share of the premium that their workers pay (39% versus 29%).
This year, 78% of all covered workers face a general annual deductible, up from 72% in 2012. Workers usually pay this deductible before most services are covered by their health plan. The average deductible for worker-only coverage is $1,135, similar to the $1,097 average deductible in 2012.
Thirty-eight percent of covered workers have a deductible of at least $1,000 or more. At small firms, 58% of covered workers have deductibles of at least $1,000, including 31% who face deductibles of at least $2,000, which is up from 12% in 2008.
In 2013, 35% of employers say wellness plans are very effective for controlling costs compared to 22% who say that disease management programs are very effective, 20% who say that consumer-driven health plans are very effective and 17% who say that cost sharing is very effective.
Nearly all large employers (at least 200 workers) offer at least one wellness program, which can take many forms and target a wide range of conditions. Thirty-six percent of large employers who offer wellness programs offer a financial incentive for workers to participate, such as lower premiums or a lower deductible, a larger employer contribution to a tax-preferred savings account, gift cards, and cash or other direct financial incentives.
Fifty-five percent of large firms that offer health benefits offer biometric screenings. And 11% of them reward or penalize workers financially based on whether they achieve biometric outcomes.
The Affordable Care Act (ACA) includes provisions that allow broader use of financial incentives to encourage workers to improve their health. Gary Claxton, director of the Foundation’s Health Care Marketplace Project said, “This will be an important issue to watch next year, as employers will have more flexibility and could ask workers to pay more because of their lifestyles and health conditions.”
Thirty-six percent of covered workers are in grandfathered plans, down from 48% last year. The shift means that more will benefit from reforms, such as coverage of preventive benefits without cost sharing and an external appeals process. The slow growth in premiums also means that fewer employer plans will be subject to the ACA’s high-cost plan tax that takes effect in 2018. The Congressional Budget Office recently reduced its estimate of the number of plans that would trigger the tax, and a continued low growth rate could further reduce the affect of this provision.
Twenty-nine percent of employers with at least 5,000 workers are considering a private exchange. These larger firms employ almost 40% of all covered workers, so their interest could indicate a significant shift in the way many people get their health insurance.
This year, 57% of firms offer health benefits to their workers, which is statistically unchanged from the 61% in 2012 and 60% in 2011. As in the past, the larger an employer is, the more likely it is to offer health benefits. Nearly all firms with at least 200 workers offer health benefits to at least some of their workers. Twenty-three percent of firms with many low-wage workers offer health insurance compared to 60% of firms with few low-wage workers.
Since most firms in the country are small, variation in the offer rate is due primarily to changes in the percentages of the smallest firms (three to nine workers) offering health benefits (45% in 2013, similar to the 50% which did so in 2012). For more information, visit http://kff.org/EHBS.
LONG TERM CARE
LTC Puts a Financial Strain on Caregivers
Caregivers spend an average of $8,080 in out-of-pocket long-term care expenses, according to a Genworth Study. Fifty-eight have cut into discretionary spending, such as eating out, buying clothes, or buying a new car. Care recipients are also affected. As a result of their care needs, 36% are cutting back on family celebrations and 32% are cutting back on basic needs like groceries.
In addition, one-third of caregivers provide 30 or more hours of care per week. The following are statistics about caregivers:
• 48% are men.
• The average caregiver is 49.
• 61% are married and earning an average income of $67,900 a year.
• 59% are caring for a parent.
• 44% have been caregivers for three years or more.
For more information, visit https://www.genworth.com/lets-talk/ltc/planning-for-long-term-care.html.
DISABILITY
Financial Effects of Disability Expected to Grow
The financial consequences of employee disability and absence will increase over the next five years according to 48% of employers and 72% of disability insurance carriers surveyed by the Disability Management Employer Coalition (DMEC) and Pacific Resources. They site the following cost drivers:
• An increased incidence of disability claims.
• Increased duration of absences.
• Increased use of Family Medical Leave Act (FMLA) benefits.
• Rising healthcare costs.
Many say expect the duration of absences to increase as a result of longer waiting times for care. Some expect disability claims to rise because, under the ACA, employees will no longer fear a loss of healthcare coverage due to a long-term absence.
Because of the the ACA, 42% say it will get harder for to get routine physiciancare in a timely manner. According to the Congressional Budget Office (CBO) estimates that 27 million people will be added to the health care system as a result of health care reform. The Association of American Medical Colleges says the shortage of PCPs in the U.S. will rise to 90,000 by 2020 and 130,000 by 2025.
The majority of respondents don’t expect to change their method of leave management administration over the next few years. But there was some concern that FMLA activity will increase as a result of ACA and that more employers will look to outsource leave management. Some say that the ACA will make employees more aware that they can take job protected leave. More employers will rethink their leave management programs and their talent management strategy if the there is an increase in the incidence and duration of disability claims and employees become more aware of leave laws. To get the whitepaper, visit http://www.airsetpublic.com/files/DMEC%20ACA%20whitepaper.pdf?i=vkFdJMOPTvCSHrLUoHCIABLY
IN CALIFORNIA
Covered California Board Meets Tomorrow
The Covered California Board is scheduled to hold its next meeting at the California Department of Health Care Services’ East End Complex Auditorium in Sacramento. It will be held Thursday, August 22 from 10:00 a.m. to 5:00 p.m. The meeting will be accessible via webcast at http://www.cal-span.org/State_Webcast/HBEX/stream_index.htm.
The board will consider contract-related matters and personnel issues in a closed session. In an open session, Covered California Executive Director Peter V. Lee will give updates on the Service Center; the Navigator Program; legislation; marketing, outreach, training and enrollment; federal rules; and Covered California planning. The session will also include a discussion of the 2014/2015 plan-contracting schedule and an update on the premium payment policy.The board may take action on the contract provisions for Covered California’s health insurance plans.
The board may also take action on regulations involving Covered California’s Certified Enrollment Counselors, Small Business Health Options Program, Certified Insurance Agents, plan-based enrollment, eligibility and enrollment, and standard plan design. The meeting will be accessible via webcast at http://www.cal-span.org/State_Webcast/HBEX/stream_index.htm. The call-in number for teleconference comments is 800-230-1766.
ACA Solutions for the Entertainment Industry
Entertainment Partners (EP) launched EP Cares, a transferable ACA health plan solution for the entertainment industry. EP selected Lockton Companies and Anthem Blue Cross to deliver EP Cares medical, dental, vision, and life insurance plans. These fully compliant plans are designed for the non-union production community. Production workers can use an online decision tool to analyze multiple plan options. Since the coverage is transferable production workers can carry the same plan with the same doctors and in many instances, the same contribution rates, across participating production companies. For more information, visit www.entertainmentpartners.com/aca.
Beverly Hills Hotel is Ordered to Pay Benefits
The U.S. Court of Appeals 9th Circuit ruled in favor of a Beverly Hills Hotel employee who is trying to hold onto health benefits for her severely disabled son. Ana Martinez is insured by The Beverly Hills Hotel and Bungalows Employee Benefit Trust Employee Welfare Plan. Martinez and her son, Steve, are eligible for health plan benefits. But the plan has refused to pay for any benefits relating to Steve’s persistent vegetative state since January 1, 2008.
In 2005, Steve had a seizure at school, which left him with permanent neurological damage. He needs a ventilator, tracheotomy, breathing tube, and gastrostomy tube to stay alive. Martinez sued LAUSD for negligence. The jury awarded Steve over $7 million. A settlement was reached and a special needs trust was established to provide for Steve’s ongoing needs.
In June 2008, the hotel decided that it was no longer obligated to pay for his care, saying that the Special Needs Trust or the government should be responsible for his expenses. An already underfunded Medi-Cal was left to pay for Steve’s care. Medi-Cal paid more than $1 million. According to state and federal law, Medi-Cal is a payer of last resort.
Founding partner of Kantor and Kantor, Lisa Kantor, Esq said, “It is unfortunate, but it is often true that insurers need to be ordered by the court to follow their own contractual obligations. Not only is this a victory for Ana Martinez and her son, but it is also a victory for Medi-Cal and therefore California taxpayers, who are not responsible for paying for medical treatment that Beverly Hills Hotel is responsible for.” For more information, visit www.kantorlaw.net.
Watchdog Sues Blue Cross Over Deductibles
Consumer Watchdog filed a lawsuit to bar Blue Cross from changing terms or benefits of consumers’ health plans each month. Los Angeles Superior Court judge, Jane Johnson, green-lighted two class action lawsuits brought by Consumer Watchdog and Shernoff Bidart Echeverria Bentley LLP. Consumer Watchdog said that once members are enrolled, Blue Cross can change the price and take away the benefits and coverage. The class action lawsuit contends that Blue Cross did the following:
• Increased annual deductibles and other annual and yearly out-of-pocket costs in the middle of the year.
• Adopted a new contract provision purportedly allowing Blue Cross to change any term or benefit of its heath service plans each month.
• Converted individual health service plan contracts from annual to month-to-month.
Consumer Watchdog will ask the court to allow the lawsuits to proceed on behalf of all affected Blue Cross customers. For more information, visit http://www.consumerwatchdog.org/resources/firstamendedcomplaintkassouf.pdf.
Half of California Voters Can’t Afford Health Care
Fifty percent of California voters have difficulty affording health care, and 73% say insurance costs are the most difficult to afford, according to a survey by Consumer Watchdog. Consumer Watchdog is pushing a ballot measure that would enable the Insurance Commissioner to reject any rate increase that he feels is too high.
Health insurance premiums rose 170% in the last decade, more than five times the 31.5% rate of inflation over the same period, according to the California HealthCare Foundation. In recent years, consumers’ health insurance premiums continued to rise in the double digits even as medical spending slowed. The Centers for Medicare and Medicaid Services said in January that health spending increased just 3.9% in 2011, a record low pace of growth for the third year in a row. The Bureau of Labor Statistics Consumer Price Index said the cost of medical care services increased just 3.7% in 2012.
The Health Insurance Rate Public Justification and Accountability act is modeled after California’s successful insurance reform law, Proposition 103, which regulates auto, home and business insurance rates and requires insurers to get approval for rate increases. For more information, visit http://www.consumerwatchdog.org
NEW PRODUCTS
Health Reform Guidance for Employers
Aflac enhanced its health care reform website with materials that explain the legislation in clear, easy-to-understand language. The kit features the following:
• A PowerPoint presentation with an overview of the ACA.
• Two sets of email and letter templates — one for employers who will offer health insurance and one for those who won’t.
• FAQs that address changes to employee benefits plans.
• Videos highlighting Health Insurance Marketplace basics and levels of coverage.
• Guides on health reform.
For more information, visit aflac.com/healthcare_reform.
Electronic App Submissions for Life Policies
With Lincoln Financial Group’s new iGO e-App, financial professionals can submit Lincoln Universal Life (UL), survivorship UL and term life insurance applications electronically to Lincoln. It also helps ensure that submissions are accurate and complete for increased efficiency and productivity. For more information, visit www.LincolnFinancial.com.
Exchange Notification App
The clock is ticking for businesses with more than $500,000 in annual revenues to comply with Section 1512 of the Affordable Care Act (ACA). No later than October 1, employers must notify employees of their coverage options through the Health Insurance Marketplace (i.e. Exchange). Many businesses may not even be aware of this mandate.
As amended by the Affordable Care Act (ACA), the Fair Labor Standards Act’s (FLSA) new requirement includes two notices: one for employers who offer employer-sponsored coverage and one for employers who do not.
All active employees, including full-time and part-time, must get the Marketplace Notice before October 1, 2013, regardless if the employee is enrolled in an employer-sponsored group health plan or not. Employees hired after October 1, 2013 must get the notice within 14 days of their start date.
COBRA Solutions developed the Marketplace Notice Manager software package to ensure employer compliance with any and all mandatory notice requirements of the ACA. The automated program produces the required notices, tracks and generates reports, and can be upgraded for future notification requirements. For more information, visit http://www.cobrasolutions.com, or call 800-325-1957.
LIFE INSURANCE
Consistency Is Key for Small Life & Annuity Companies
A number of smaller life insurance companies have been successful in the face of industry consolidation and the aftermath of the Great Recession. So what’s their secret? A report by Conning finds that the overarching characteristics of successful companies are financial prudence and a consistent focus.
Whether a company focused on life or annuity products mattered much less than did consistency of that focuses over time, and of course the riskiness of the products. The report also identifies factors, such as the successful firms’ approach to geographic footprint, distribution, investments, expenses, and policy face amounts. For more information, visit www.conningresearch.com.