Orange County Register by Bernard J. Wolfson –

July 28, 2014:

It’s unlikely that state health insurance exchange officials will deliver a rate shock later this week when they announce premiums for 2015 plans sold by Covered California.

Several factors, including recent comments from some of the state’s largest insurers, suggest there will be only modest increases on those policies offered under the Affordable Care Act, or Obamacare. In some cases, there may be no hikes at all.

The state-run insurance exchange is scheduled Thursday to unveil rates and other details of the private sector insurance policies it will market to individuals and families for coverage that begins on Jan. 1. Enrollment for 2015 plans will open Nov. 15 and run through Feb. 15.

In addition to new enrollments, Covered California will also need to renew coverage for many of the 1.4 million state residents who signed up for 2014. People who want to renew existing policies will be able to do so starting in October.

Health care analysts said insurance companies probably relied on guesswork in setting premiums for next year since they still do not have a complete picture of how their spending on medical care has been affected by this year’s influx of hundreds of thousands of newly insured Californians – some with longstanding conditions for which they could not get adequate care before.

Because assumptions, computer modeling and business strategies will differ from insurer to insurer, there is likely to be a lot of variation in the magnitude – and possibly the direction – of premium changes for next year, they say.

But there are reasons to believe that, on average, there won’t be anything close to the kind of double-digit increases that have been so common for health insurers in recent decades. And the consumer impact of any increases will be mitigated by the vast majority of exchange enrollees receiving federal subsidies to help keep premiums at a fixed percentage of their income.

“I would expect increases in California to be on the modest end of the spectrum,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a nonprofit health care research group based in Menlo Park.

He noted that following the political uproar last year over the cancelation of health policies that did not comply with the new coverage requirements of the Affordable Care Act, some states allowed people to stay on their old, noncompliant plans, which tended to attract younger, healthier people. That meant healthy people were “siphoned” out of the exchanges in those states, leaving them with a sicker population, which would tend to push premiums up.

But that did not happen in California because the state didn’t allow the old plans to remain in force.

Also favoring premium moderation in California, Levitt argued, is the robust 2014 enrollment number, which was double Covered California’s most optimistic forecast. In states with low enrollment, the people who did sign up were likely to be “sicker than average,” he said.

“In California, the enrollment has been strong, so the risk pool is likely to include healthy people as well as sick,” Levitt said.

Blue Shield of California embraced this argument, offering a possible clue to its 2015 premiums. The insurer, one of the state’s largest, “was pleased with the larger-than-expected enrollment numbers, signaling strong enrollment by healthy individuals,” said company spokeswoman Mia Campitelli.

Anthem Blue Cross, which drew the largest number of Covered California enrollees statewide this year, seems similarly pleased with its demographic mix. In a speech last month in Los Angeles, Anthem president Mark Morgan revealed that the average age of Blue Cross enrollees in Covered California was 41 years old, “within a year of what we expected. So our team got it right in terms of setting that pricing based on age.”

That suggests Anthem Blue Cross may not need to make any dramatic adjustment to its rates for next year.

“We will not have double-digit increases in our Covered California population,” Morgan said. “So stay tuned, but I think that’s a good indication of how we feel about the success of our early work, because there are other parts of the country where we’re hearing 20s and higher.”

Indeed, in states that have already reported their 2015 exchange premiums, some insurers have proposed rate hikes well in excess of 20 percent. But others, often within the same states, are reducing their premiums.

In Oregon, for example, the biggest premium hike is 28 percent, while the lowest is actually a decrease of 21 percent, according to data compiled by Families USA, a Washington, D.C.-based health care consumer advocacy group.

It appears that Kaiser Permanente, which charged the highest prices of any plan in Covered California this year, is aiming for moderation in its 2015 premiums. According to Families USA, Kaiser is cutting premiums 12.1 percent in Maryland and is proposing an increase of just 3.3 percent in Virginia — the lowest of any insurer in that state.

“We are optimistic that consumers will see at most only very modest increases, if any, next year,” said John Nelson, Kaiser Permanente’s Southern California spokesman.

Some health care observers think Kaiser may be unhappy about the dampening effect its high prices had on its enrollment numbers in Covered California in 2014. Though it is an undisputed giant in the state, with more than nine million Californians enrolled, Kaiser had fewer sign-ups in the exchange than Anthem Blue Cross, Blue Shield and even Health Net, which previously was a small player in the individual market.

For a family of four with parents 40 years old, Health Net’s HMO at the silver tier – the second cheapest type of plan – costs $762 a month, compared to Kaiser’s $1,003. Health Net was able to cut prices largely because of its stripped-down network, while Kaiser offers its full network to everyone.

“Kaiser may be regretting how they did things last time around, and they may come in lower,” said Betsy Imholz, director of special projects at Consumers Union.

If Health Net has any desire to raise prices, it will likely be tempered by an instinct to protect the considerable new market share that its low premiums delivered. Asked what lessons Health Net has drawn from its first year in Covered California, company spokesman Brad Kieffer replied: “Price is king. Our Communitycare HMO – the lowest priced plan in Southern California – sold like hotcakes.”

With the Affordable Care Act driving millions of newly insured people into exchanges, the individual insurance market has suddenly become a much more important – and competitive – business.

Insurers will want to retain their new enrollees at least for a few years, to help pay off the millions of dollars they spent upgrading their systems for the Affordable Care Act, said Ron Goldstein, CEO of CaliforniaChoice, a private health insurance exchange for small businesses based in Orange.

“One of the insurance companies we work with says they got a couple hundred thousand new individual members. That doesn’t pay for all the upgrades they made in year one,” Goldstein said. “The strategy is to keep them for a few years. So it would not make sense to increase premiums very much.”

July 22, 2014

The U.S. Court of Appeals for the D.C. Circuit released a 2-1 decision today in the Halbig v. Burwell case determining that the IRS and the federally facilitated exchange marketplace was not authorized to distribute premium tax credit subsidies to individual exchange consumers. The court determined that the Patient Protection and Affordable Care Act (PPACA) unambiguously restricts the availability of subsidies to insurance purchased in state-based exchanges, and that the IRS regulation acted outside of the parameters of the PPACA by making available subsides via the federally facilitated and partnership exchanges. While this decision could eventually have huge ramifications for the health reform law, it is very important to note that the ruling does not change anything regarding the distribution of subsidies or cost-sharing assistance, the operation of the federally facilitated exchanges or enforcement of the employer mandate for the time being. In making its ruling, the D.C. Circuit Court made a very specific decision not to immediately block subsidies, acknowledging that their decision will be appealed right away.

The Obama Administration has already announced its plan to appeal today’s ruling to the full D.C. Circuit Court. Furthermore, there are two other cases still pending before other circuit courts and, in addition to those two pending cases and the D.C. Circuit Court’s ruling, a conflicting ruling was also issued today on an almost identical case by the 4th Circuit Court of Appeals in Richmond. That court ruled unanimously 3-0 that the IRS has acted correctly in allowing tax subsidies to be issued via all federal and state-run exchange states. These conflicting rulings mean that this issue will almost certainly be appealed to the U.S. Supreme Court later this year. If and when head by the Supreme Court, we can expect a final decision regarding the availability of subsidies in federally facilitated marketplaces no sooner than June 2015.

So what does this mean for you as an agent and your clients right now? Since there are conflicting rulings and the decisions are being appealed, no action will be taken in the federally facilitated marketplaces to enforce the D.C. Circuit Court ruling on an immediate basis. This means:
◾The federally facilitated marketplaces will remain fully operational and you may continue to work with your clients to obtain coverage in the marketplace.
◾Premium tax credit subsidies and cost-sharing assistance in both the state and federally facilitated marketplaces will continue to be distributed for the time being, and likely will be continually distributed until a final decision is made in Halbig v. Burwell or a similar case by the Supreme Court.
◾Current clients with subsidized coverage are unaffected by the ruling.
◾If the Supreme Court ultimately rules like the D.C. Circuit Court and strikes subsidies moving forward, based on current legal precedents, clients that currently have or will receive a subsidy in the future will likely not have to repay those subsidies retroactively, assuming that the individual was legally eligible for the subsidy at the time of receipt.
◾The current special enrollment period (SEP) rules are still in place, and open enrollment will begin on November 15, 2014, as planned.
◾If you plan on selling in a federally facilitated marketplace during the upcoming open enrollment season that begins in November, you should continue to register to do so.
◾The individual and employer mandates are still in place and employer-client compliance efforts relative to the employer mandate should continue unchanged.

Anthem Misled Millions About Health Plan Networks, Lawsuit Alleges
Wednesday, July 9, 2014

On Tuesday, Consumer Watchdog filed a class-action lawsuit alleging that Anthem Blue Cross misled “millions” of consumers who enrolled in its health plans about which physicians and hospitals were included in their provider networks, Kaiser Health News reports.

Details of Lawsuit

Consumer Watchdog filed the lawsuit on the behalf of all Anthem members who purchased individual coverage through the state health insurance exchange or directly from the insurer between Oct. 1, 2013, and March 31.

Specifically, the lawsuit alleges that Anthem:
•Delayed giving its customers complete information until it was too late for them to switch their coverage choice;
•Did not inform its customers that it no longer offered out-of-network coverage in four of state’s largest counties — Los Angeles, Orange, San Diego and San Francisco; and
•Misled or did not inform its customers about which doctors and hospitals were participating in the insurer’s new plans.

As a result of those alleged failures, the lawsuit states that many members received thousands of dollars in unexpected medical bills and were unable to see their preferred physician.

California Governor Jerry Brown has signed into law SB 1446, known as the “grandmothering” bill and “transitional relief.”

The new law allows qualifying non-grandfathered small employer health plans to remain in effect until December 31, 2015 even if they don’t meet certain requirements under the Affordable Care Act.

The measure takes effect immediately and allows small businesses to renew coverage at any point in the year (Robertson, Sacramento Business Journal, 7/7).

Under the ACA, all health plans must include 10 essential benefits, including hospitalization, prescription drugs, maternity care and mental health treatments (O’Neill, “KPCC News,” KPCC, 7/7).

The law’s employer mandate provision states that any health plans that do not meet all 10 requirements will be canceled at the end of 2014.

Kaiser Health News by Jay Hancock –

June 24, 2014:

Health costs will accelerate next year, but changes in how people buy care will help keep them from attaining the speed of several years ago, PricewaterhouseCoopers says in a new report.

The prediction, based on interviews and modeling, splits the difference between hopes that costs will stay tame and fears that they’re off to the races after having been slow since the 2008 financial crisis.

“This is not an immediate return to double-digit growth rates,” says Ben Isgur, a director in PwC’s Health Research Institute. However, he adds, “what we’re seeing for 2015 will be our first uptick in some time.”

If health plans stay unchanged, PwC sees medical costs rising by 6.8 percent in 2015, up from a projected increase of 6.5 percent this year. (PwC defines medical costs as per-capita health expenses for private insurers and large, self-insured employers. This is different from the government’s measure of health spending, which includes outlays for the government programs Medicaid and Medicare.)

But PwC doesn’t expect plans to stay the same. In a separate study, the consulting firm forecasts that employers and insurers will continue to raise deductibles and give members other incentives to mind the price of care. (The deductible is what patients pay before insurance kicks in.)

Those changes should slow growth in the total cost of care to 4.8 percent, PwC says, as greater exposure to price tags prompts workers to undergo fewer treatments and tests. (PwC expects the deceleration from 6.8 percent to 4.8 percent to come solely from changes in consumer behavior, not money employers save by shifting costs to workers.)

Employers increasingly offer plans with deductibles of several thousand dollars, making members responsible for routine medical costs, and often for large portions of hospitalizations and other expensive treatment.

Two-thirds of the companies surveyed by PwC offer high-deductible plans. Nearly a fifth of employers offer nothing but a type=’text/javascript’;Vrienden doorverwijzen naar een online casino de-beste-online-casinos.info kan je als speler extra speelgeld opleveren en wordt door veel online casino’s gebruikt om extra spelers te werven. high-deductible plan. Forty-four percent of the rest are considering it, PwC said. Other research shows the same trend.

“A few years ago an employer would kind of put their toe in the water with the the high-deductible health plan,” Isgur said. “They were saying, ‘Hey, it’s one of three you can pick from.’ Now they’re saying, ‘This is the health plan we offer.’”

High-deductible plans are associated with lower short-term spending, research shows. But some studies suggest higher costs prompt patients to delay or skip needed care, which could raise long-term costs.

Other factors restraining medical expenses include better coordination between different parts of the system, and payment changes that penalize caregivers for poor patient outcomes, PwC says.

On the other hand, an improving economy is expected to prompt an increase in health-care consumption. That pushes up costs. So does hospital acquisition of physician practices, which allows the hospitals to charge more. Drug manufacturers are introducing expensive specialty drugs, which also puts upward pressure on spending.