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by Leila Morris
• Workers Are in the Dark About Upcoming Plan Changes
• Administration Releases New Rules To Implement Health Law’s Individual Mandate
• Large Employers Consider Cost-Cutting Measures
• Delay of Employer Mandate Not Expected to Have a Big Impact
• Unemployment Restricts Access to Kidney Transplants
• Urgent Care Centers: Emergency Department Alternative or Costly Convenience?
• The California Endowment to Fund Community-Based Enrollment
• Covered California Will Open a Fresno Center in November
• Covered California Begins Staff Training
• Phone Problems Plague Covered California Insurance Broker Registration
• Employers, Health Plans Exclude High-priced Hospitals
• California Reaches A Settlement With ING
• Small Businesses Guide to Health Care Reform
• Pros and Cons of Step Therapy
• Long Term Care in California: Ready for Tomorrow’s Seniors?
Workers Are in the Dark About Upcoming Plan Changes
The October 1 deadline is looming for employers to notify workers of their coverage options under the Affordable Care Act (ACA). However, 69% of workers say their employers haven’t informed them of upcoming changes to their benefits. Michael Zuna, Aflac’s executive vice president said, “Many workers will be blindsided this open enrollment season because…they already struggle with understanding their insurance policies and covering the high out-of-pocket costs from gaps in their current coverage. Over the next few months, these challenges will be exacerbated as employees may be more confused by changes in their policies, and face greater gaps in their health insurance coverage leaving them at risk. With little notice, education, and coverage options to help guide and support them during this season, employers could face a highly dissatisfied workforce.”
Only 9% of employers say they are very prepared to implement required changes to their business based on the health care reform law. Forty-one percent of employers expect health reform to lead to more gaps in coverage and 69% say employees’ costs will increase as a result of health care reform.
Zuna said that employers should provide aggressive education and offer ancillary benefit options to close gaps in workers’ coverage. Zuna said that employers should take advantage of resources to help employees understand their coverage, including visits from an insurance agent or broker. In fact, employers named insurance companies as the most helpful source of information they have received on the health care law.
With many companies facing the decision to limit or decrease employer-paid benefits, providing voluntary benefits can help workers close the gaps in their coverage, at no additional cost to the company, said Zuna. He suggests that employers do the following:
• Mail benefit materials to employees’ homes so they can discuss their options with their family.
• Host a town hall meeting with a benefit advisor to discuss changes and answer questions that apply to the group. Encourage one-on-one meetings with employees who have more questions.
• Conduct webinars to reach all employees regardless of location.
• Post FAQs in high-traffic areas, such as employee break rooms, cafeterias, and bathrooms. Aflac is offering guidance at aflac.com/healthcare_reform.
Administration Releases New Rules To Implement Health Law’s Individual Mandate
by Mary Agnes Carey
Reprinted with permission from Kaiser Health News (kaiserhealthnews.org.)
As congressional Republicans push for a delay in the 2010 health law’s individual mandate, the Obama administration announced final regulations implementing the requirement that most Americans have health insurance coverage by Jan. 1 or pay a fine.
The document from the Treasury Department and the Internal Revenue Service is in addition to regulations the Department of Health and Human Services published in late June.
The regulations specify nine categories of individuals who are exempt from the mandate, including people who can’t afford coverage or taxpayers whose income is so low they don’t have to file a tax return, according to a fact sheet from the agencies. People in jail or who are not in the country lawfully are also exempt, as are individuals who experience a coverage gap of three months or less.
When filing 2014 taxes in 2015, individuals must say on their returns if they have health insurance coverage and, if not, pay a fine. The individual penalty is the greater of $95 or 1% of income, rising to the greater of $695 or 2.5% of income, in 2016. The Congressional Budget Office estimates that less than 2% of Americans who don’t have health insurance will pay the fine.
In July, the Obama Administration delayed for one year a provision in the health law that employers with 50 or more workers offer coverage to employees or pay a fine. Republicans said that if the administration delayed the employer mandate for a year, individuals should also get a reprieve from the health law’s individual mandate set to begin next January. In July, the House of Representatives passed legislation to delay the individual mandate requirement for a year, but the measure is not expected to come to a vote in the Senate.
Tuesday’s announcement from Treasury and the IRS — along with the final individual mandate regulations that HHS issued in June — make it clear that the administration is moving ahead with implementing the individual mandate, which has become one of the law’s most politically explosive elements. House Republicans have tried to repeal or defund the law 40 times on the House floor and more votes are likely this fall.
Supporters of the law and many health care economists say that the requirement that most Americans have coverage or pay a fine is critical to making the law work as intended.
The individual mandate is one of two lynchpins that make the Affordable Care Act work, Washington state Insurance Commissioner Mike Kreidler said in a statement. You simply cannot guarantee everyone coverage — regardless of their health status — without also requiring that everyone participate. The individual mandate guarantees personal responsibility. Without it, there’s nothing to prevent people from only buying health insurance when they need it — which is similar to allowing people to buy homeowners insurance when their house is on fire.
America’s Health Insurance Plans, a trade group representing health insurers, wants the health law’s tax on health insurance plans repealed but supports the individual mandate.
There is broad agreement that requiring health plans to cover everyone, including those with pre-existing conditions, cannot work without an individual mandate, the group said in a statement. By requiring all Americans to get health coverage, the risk pool becomes large enough to account for the sickest Americans, without the adverse effect of skyrocketing premiums.
Large Employers Consider Cost-Cutting Measures
Employers are eyeing cost-control measures for their health plans, such as asking workers to pay more of the premium while sharply boosting financial rewards for health and wellness, according to a survey by the National Business Group on Health. The survey also found that employers are continuing adjusting their benefit plans to comply with additional provisions of the health reform law.
Employers expect health care benefits costs to increase 7% in 2013. That’s the same increase they projected for this year, but it’s smaller than what employers experienced the previous three years.
Sixty percent plan to increase the percentage of the premium that employees pay in 2013, although the majority of those employers said that the increase would be less than 5%. Additionally, 40% will increase in-network deductibles; 33% will increase out-of-network deductibles; and 32% will increase out-of pocket maximums.
Helen Darling, president and CEO of the National Business Group on Health said, “Although cost increases have stabilized somewhat, they are still on a higher base from last year and are simply not sustainable, especially when our nation’s economy and workers’ wages are virtually flat and everybody is struggling.”
Forty-three percent say that the most effective cost control option is a consumer driven health plan; 19% cited wellness programs; and 9% cited employee cost-sharing.
Employers are experimenting with financial incentives in wellness programs. Forty-eight percent of employers use incentives to encourage participation in programs and some employers are basing incentives on health outcomes. Forty-four percent provide incentives based on tobacco-use status; 29% base incentives on outcomes, such as BMI or cholesterol levels; and 22% apply surcharges to employees for not participating in certain programs.
Among employers that offer incentives, the median amount employees can earn will jump 50% from $300 this year to $450 next year. The median incentive amount that dependents can earn is expected to increase from $250 this year to $375 in 2013.
Respondents were asked what changes they made or are planning to make as regulations from the Affordable Care Act (ACT) come into effect. The survey found the following:
• 50% no longer have annual benefit limits while nearly 32% did not change their annual limits this year. Among employers making changes for 2013, the most common benefits requiring adjustments to their annual limits were mental health and substance abuse (9%) and rehabilitative services and devices (9%).
•57% did not have any benefit option in grandfather status this year, compared to 49% last year. However, 27% will have at least one grandfathered health plan this year.
•51% say that some retirees may find state health insurance exchanges to be a viable option for health insurance; 38% say that COBRA plan participants may consider exchanges; and 35% say that part-time employees might consider exchanges. For more information, visit www.businessgrouphealth.org.
Delay of Employer Mandate Not Expected to Have a Big Impact
There is a one-year delay in the mandate requiring large employers to provide health insurance to their workers. A Rand study finds that this delay will not significantly hurt the goals of the Affordable Care Act. However, a repeal of the requirement would seriously undermine financial support for the law. The one-year delay announced by federal officials in July means that an estimated 300,000 fewer people will have employer-sponsored health insurance during 2014 and the federal government will collect $11 billion less during the period to help support the Affordable Care Act.
Both of the numbers are small compared to the overall size of health insurance expansion and revenue generated under the Affordable Care Act. However, if the large employer mandate were repealed, revenue would fall by $149 billion over the next 10 years because of lost penalties – about 10% of the total spending offsets being used to support the law.
Under the law, companies with more than 50 workers must offer workers affordable health care coverage or pay penalties. The provision affects a relatively small group of companies because more than 95% of large employers already offer their workers health coverage.
About 1,000 fewer companies – less than 1% of large employers – will offer coverage in 2014 because of the enforcement delay. Once the insurance mandate is enforced on large businesses, an estimated 0.4% of large employers, who employ 1.6% of the nation’s workforce, will pay a penalty for not offering health insurance at all.
An estimated 1.1% of large companies will pay a penalty for offering unaffordable coverage to their workers. These companies employ fewer than 1% of the nation’s workforce. The study, “Delaying the Employer Mandate: Small Change in the Short Term, Big Cost in the Long Run,” is at this address: www.rand.org.
Unemployment Restricts Access to Kidney Transplants
People in end-stage kidney failure are much less likely to get on a waiting list or actually get a new kidney if they are unemployed or work part time, according to research from the University of New Hampshire. Patients who are retired and/or disabled, working part time, or working full time are much more likely to get on a transplant waiting list than are unemployed patients. They also are more likely to get a transplant once they are on the list. Finally, those who work full time are most likely to be added to the transplant list and get a kidney transplant.
Transplant centers have found that patients with limited financial resources have higher rates of noncompliance with post-transplant medical care. Woodward says that transplant centers may be more hesitant about providing transplants to those with limited financial resources since noncompliance with post-transplant care is a leading cause of rejection, infection, and death.
Woodward adds that there is significant evidence that a lack of health insurance can contribute to significant noncompliance. Those who rely only on Medicare may also experience restricted access to transplant services. Even though Medicare pays a large portion of the cost of the required immunosuppressant medications, it does not cover non-immunosuppressant prescription drugs that transplant patients are more likely to need. As a result, many transplant centers require secondary, private insurance before a patient is considered for listing on the transplant list.
Also, transplant centers could view employment status as a marker of mental and physical health status, education level, and perceived compliance by the patient with post-transplant care.
Woodward and his co-authors say that patients who are more likely to experience barriers to transplants based on employment status could benefit from increased interaction among patients, social workers, and other medical personnel, including case managers and financial specialists. The focus should be on continued employment and vocational rehabilitation, they said.
Urgent Care Centers: Emergency Department Alternative or Costly Convenience?
Consumer demand for more convenient and timely access to care is driving the rapid growth of urgent care centers, according to a study by the Center for Studying Health System Change (HSC) for the nonpartisan, nonprofit National Institute for Health Care Reform (NIHCR). Some providers say that urgent care centers disrupt coordination and continuity of care while others say these concerns may be overstated, given urgent care’s focus on episodic and simple conditions, rather than chronic and complex cases.
Respondents in six communities (Detroit; Jacksonville, Fla.; Minneapolis; Phoenix; Raleigh-Durham, N.C.; and San Francisco) say that consumer demand for convenient access to care drives the growth of urgent care centers. At the same time, hospitals view owning urgent care centers as a way to gain patients while health plans see opportunities to contain costs by steering patients away from costly emergency department visits.
Historically, urgent care centers were often independently owned, but the landscape has changed considerably. Large urgent care center chains operate in some regions, and hospital systems are establishing urgent care centers. Health insurers are partnering with or establishing urgent care centers. The idea is to control spending growth by shifting some care from emergency departments to lower-cost urgent care centers.
Most respondents say that urgent care centers do not significantly disrupt relationships with primary care providers or disrupt the coordination of care. One reason is that many patients treated at urgent care centers have acute needs that can be handled in isolation from other health care needs or conditions. For more information, visit www.hschange.org.
The California Endowment to Fund Community-Based Enrollment
The California Endowment is providing a $9.2 million grant to the Health Consumer Alliance to help Californians navigate new public and private health coverage options. Robert K. Ross, M.D., president and CEO of The California Endowment said, “With Covered California set to open for enrollment in October and the state’s Medi-Cal expansion underway, millions of uninsured and underinsured Californians will be newly eligible for affordable, quality health coverage. Successful implementation of Obamacare will depend on getting Californians enrolled. Our commitment, along with Covered California’s, will help them access and understand their options through community-based assistance provided by Health Consumer Alliance.”
The Health Consumer Alliance is a statewide partnership of legal aid organizations that educate low-income Californians about their health insurance rights and options. Funding from the Endowment will be used to help consumers identify and apply for health coverage programs, and provide them with assistance about eligibility, appeals, and benefits. For more information, visit www.calendow.org.
Covered California Will Open a Fresno Center in November
Covered California signed a lease for its Fresno Service Center location. California’s new health benefit exchange will employ up to 300 full-time and part-time workers at the center, located at 7201 N. Palm Ave. It is one of three sites statewide for representatives to take phone calls from consumers. Additional positions may be added next year, depending on consumer demand.
Covered California will start moving in and installing technology on Sept. 9. Hiring is under way for the initial wave of 158 jobs, with a six-week employee training program beginning in October. The site will open for business in mid-November.
Projected employment at the Fresno site will be 280 by the end of the year. The state employees will be trained to answer questions about Covered California and to enroll residents in health insurance plans through the exchange, and refer some Californians to Medi-Cal.
Two other Covered California Service Centers, in Rancho Cordova and Concord, were set to take general inquiry calls on Aug. 26. By the time the marketplace launches Oct. 1, Covered California expects that 442 Service Center representatives will be working at the two centers and another 253 people will be working as management, back office and quality assurance staff. For more information, visit www.CoveredCA.com.
Covered California Begins Staff Training
This week marked the first day of training for 330 Covered California service center staff in Rancho Cordova. Below is a link to some footage from the first day of training this morning. https://vimeo.com/72688924 The six-week training program will prepare the staff for phone calls when enrollment begins on October 1. Service center staff will help consumers understand their options, enroll in health plans, and determine eligibility for subsidies and tax credits.
Phone Problems Plague Covered California Insurance Broker Registration
Frustration among insurance brokers was palpable Monday as long waits and abrupt phone disconnects riddled online registration for training to sell insurance through Covered California, according to the Sacramento Business Journal.
Covered California had computer problems and got 2,000 calls in the first couple of hours Monday morning, said exchange spokesman Dana Howard. There were 96 call lines going to 20 call center representatives. About 9,000 brokers across the state have expressed interest in the program. About 2,700 were registered in the first five hours, according to Howard.
Employers, Health Plans Exclude High-priced Hospitals
Los Angeles employers are increasingly willing to cut costs by choosing networks that exclude high-priced, prestigious research institutions, according to a report by HealthLeaders-InterStudy. The City of Los Angeles’ decision to choose an Anthem Blue Cross HMO illustrates this trend. The arrangement excludes physicians from Cedars-Sinai Medical Center and UCLA Health. The advent of the state’s health insurance exchange, Covered California, will only intensify the trend toward narrow networks in the market, since most health plans have excluded these research institutions from their exchange networks, according to Jenny Kerr, Market Analyst at HealthLeaders-InterStudy.
Kerr said, “We expect pressure on the high-priced, academic hospitals in the market to reconsider pricing as narrow networks continue to exclude them. Employers are sending a message that they are no longer willing to pay for hospitals that charge higher rates for routine services to cover costs of their teaching and research missions.”
The growth in accountable care organizations (ACOs) is another key driver in this trend. There are 23 ACOs in Los Angeles, which is the most in the state and the second-most in the nation. The rapid creation of ACOs, which are primarily physician-led in this market, means physicians get incentives to prescribe the most effective medication rather than the least expensive. For more information, visit www.DecisionResourcesGroup.com.
California Reaches A Settlement With ING
Along with other state insurance regulators, the California Dept. of Insurance reached a settlement agreement with ING over its use of the Social Security Administration’s Death Master database.
ING has agreed to a number of reforms, including using the Death Master database to search its records for deceased life insurance policyholders so that beneficiaries get paid. ING also agreed to pay $10.7 million to insurance regulators. Insurance regulators from Florida, California, Connecticut, New Hampshire, Pennsylvania, Illinois, and North Dakota led the national investigation of ING’s practices.
For many years, life insurers have used the Death Master database to search for and stop payments to annuity holders, but did not use the database to identify their own deceased life insurance policyholders whose beneficiaries are owed life insurance proceeds. Through this practice, insurers avoided paying billions of dollars in life insurance proceeds to beneficiaries and failed to turn over unclaimed proceeds to state controllers throughout the United States. MassMutual will not be included in financial settlements because it was found to have used the Death Master database properly.
Commissioner Dave Jones said, “This settlement is another step forward in changing life insurance industry practices about the use of the Death Master database. ING has agreed to do the right thing by reforming its use of the database to benefit policyholders and I commend its participation in this agreement. I would also like to commend MassMutual for its exemplary behavior. For years it has used Death Master symmetrically on the life and annuity sides of its house. It should be recognized by the industry as a model of best practices.”
Eight life insurers representing nearly 43% of the total national market have conformed or agreed to reform their business practices and use the Death Master to search for deceased policyholders and make benefit payments. A number of other large life insurers, including life insurance giant New York Life, continue to be the subject of investigation by state insurance regulators.
Small Businesses Guide to Health Care Reform
The National Association for the Self-Employed (NASE) released a guide to educate California’s small business community during this health reform transition period. Katie Vlietstra, NASE’s Director of Government Affairs said, “While the new law may provide better and more comprehensive health coverage for many of California’s smallest businesses, it will come at a significant cost. Over 3.4 million self-employed and micro-businesses throughout the state of California are bracing for an increase in health care costs coming their way. Our fear is that many of these small businesses will conduct a cost-benefit analysis and decide to pay the penalty because the cost of coverage is just too expensive and they do not qualify for any premium assistance.”
The Affordable Care Act in Brief highlights how the new health care law will affect 23 million self-employed and micro-businesses nationwide, including the 3,432,359 in California. It outlines the pros and cons of health care coverage small businesses must consider while underlining the lack of information in the public domain about the health care law, the Exchanges and details of enrollment requirements.
For more information, visit NASE.org.
Pros and Cons of Step Therapy
For the third time in the past four years, the California Legislature is considering a bill that would limit and regulate a prescription drug protocol known as step therapy reports California Healthline, also known as step protocol, fail first and prior authorization, step therapy is a tool used by insurers and providers to control rising costs and limit the risks of prescription drugs. The practice calls for patients to start with the most cost-effective, safest drug available and then to proceed to more costly, and sometimes more risky, drugs if the preceding step is not successful.
AB 889, by Assembly member Jim Frazier (D-Oakley), proposes a limit of two steps and requires health plans to create a process for exceptions to the rule. Four years ago, a similar bill died in committee. Last year, both houses passed a similar bill, which made it to the governor’s desk where it was vetoed by Gov. Jerry Brown (D).
California Healthline asked legislators and stakeholders to share their views on the pros and cons of step therapy, and the pros and cons of establishing laws to regulate the practice. Assembly member Jim Frazier (D-Oakley), Author of AB 889 said, “A troubling and dangerous trend occurring with health plans is frequent denial of coverage to enrollees for timely and effective medications that their doctors prescribe. Many health plans utilize step therapy, or fail first, which requires a patient to try and fail on up to five older, less-effective treatments before they will cover the treatment originally prescribed by their doctor. Oftentimes, a patient is not aware of the change until he or she arrives at the pharmacy to pick up the prescription.”
Patrick Johnston, president/CEO of the California Association of Health Plans said, “We are fortunate that pharmacology allows people with severe and debilitating conditions to have an improved quality of life and relief from their pain. But many of the prescription medications that offer much needed help come with dangerous side effects and can be highly addictive.”
Long Term Care in California: Ready for Tomorrow’s Seniors?
The number of elderly residents in California is expected to balloon in the next 30 years. A report by the California HealthCare Foundation looks at whether the long term care system will be able to care for the state’s booming aging population. The leading edge of the Baby-Boom generation is beginning to flood California’s long-term care system. The population of residents 65 and older is projected to triple by 2060. The use of all long-term care services has increased in California, with the largest growth occurring in home- and community-based services.
Medicare and Medicaid beneficiaries in California used long term care services at a lower rate than the nation. The exception is Medicaid patients’ use of personal care services, which was nearly four times higher in California than the US. California’s per-capita supply of residential care beds for the elderly is larger than the nation’s. However, the supply has not kept pace with population growth since 2004. For more information, visit http://www.chcf.org/publications/2013/08/long-term-care#ixzz2dDdz5h7z