Los Angeles Times by Chad Terhune –

July 19, 2013:

Health insurance giant Anthem Blue Cross is spurning California’s new insurance market for small businesses, a potential setback in the state’s rollout of the federal healthcare law.

Anthem, a unit of WellPoint Inc., is California’s largest insurer for small

employers. The company’s surprising move raised concerns about the state’s ability to offer competitive rates and attract businesses to its new Covered California exchange that opens Jan. 1.

The federal Affordable Care Act left it up to health insurers to decide whether they wanted to sell in these government-run marketplaces.

Friday’s disclosure made Anthem the first big insurer in California to publicly pass on the small-business pool. Some other big names, such as UnitedHealth Group Inc. and Aetna Inc., have already opted out of California’s larger exchange for individual consumers.

Overall, most industry experts have not expressed alarm about the handful of big companies so far that have chosen to sit on the sidelines. They say insurer participation has been fairly solid across the country thus far and next year’s premiums have come in lower than expected in California and other states.

The level of insurer competition “has been a pleasant surprise in a number of

states and in other places it’s been more mixed,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.

Anthem’s decision in California underscored that the small-business exchanges are the most susceptible to a lack of interest among insurers.

The state’s largest for-profit health insurer isn’t abandoning the small employer market, which is limited to firms with 50 or fewer workers. It said it would keep selling coverage to small companies outside the exchange, and it also remains one of 13 health insurers that will offer policies to individuals in Covered California.

Anthem led California with 31% of the small-employer market in 2011, according to the most recent Citigroup data. Kaiser Permanente was a close second with a 28% share, followed by Blue Shield of California with 18% of small firms. Both Kaiser and Blue Shield are expected to participate in the small-group exchange.

Nonetheless, Anthem’s move caught many observers off guard.

“That’s really surprising and not a good thing for the exchange,” said Micah Weinberg, a senior policy advisor at the Bay Area Council, an employer-backed San Francisco group. “Anthem is a very major player in the small-group market and you want a broad range of insurers, particularly the most compelling brand names.”

Covered California sought to downplay any potential fallout on rates and employer choice, likening Anthem’s departure to one airline pulling out of a highly competitive market.

“We don’t think it will have a huge impact,” said exchange spokesman Dana Howard. “There are other companies that are just as big. This will be a competitive market.”

Employers will learn more early next month when Covered California announces the health insurers and their proposed rates for the small-business exchange. In the first few years, the state estimates up to 200,000 small-business workers and family members may get coverage through the state’s market.

In the exchange, some small firms are able to use federal tax credits to help purchase insurance for their workers.

The state had required health insurers wanting to sell in the individual exchange to also submit a bid for what’s known as the SHOP, or small-business health options program. But Howard said the state lifted that requirement last month to give health plans more flexibility.

Anthem said it took advantage of that option once it was available.

“Because Anthem is no longer required to participate in SHOP as a condition of being on the individual exchange,” said company spokesman Darrel Ng, “Anthem has withdrawn its SHOP application. Anthem will continue to participate in the individual exchange.”

Anthem also said it will remain part of a private exchange for small firms called California Choice.

One concern for health insurers selling in exchanges is that too many customers with big medical bills pick a certain company and it absorbs a higher share of the medical costs among that population.

“The reality is that risk is not spread equally in an exchange,” said Bruce Jugan, an insurance agent in Montebello and president of Benefitscafe.com, which sells health insurance to individuals and businesses.

“If SHOP can offer comparable plans with lower rates then they will get a lot of business, even without Anthem Blue Cross participating,” Jugan added.

Anthem has come under fire from regulators

recently over rate hikes for small businesses.

Last month, California Insurance Commissioner Dave Jones asked the exchange to bar Anthem from its small-group market because of what he viewed as unreasonable premium increases.

“I think Anthem withdrew because they felt they would be excluded or at a minimum they didn’t want to face additional debate” over their rate hikes, Jones said Friday.

Covered California had said it would consider the commissioner’s request alongside other factors. Anthem said the recommendation by Jones had no bearing on its decision to drop out.

After passing on the state’s individual exchange, both UnitedHealth and Aetna went a step further by deciding to exit the individual market entirely at year end. That will force nearly 60,000 customers in California to find new coverage.

The Press Democrat by Guy Kovner –

July 19, 2013:

The average California family will be forced to spend a third of its annual income for health insurance by 2022 if costs continue to spiral upward at current rates, according to recent reports by industry groups.

Obesity, prescription drugs, unnecessary tests and expensive new technology are driving up health care costs in California, according to a report issued

this month by the California Association of Health Plans.

Obesity alone adds $12.8 billion to the state's $230 billion annual health care bill. More than 60 percent of Californians are overweight or obese, and obesity is expected to double by 2030, increasing its share of health care costs by 15.7 percent.

The state's total health care bill has tripled since 1991, with cost increases exceeding inflation and expected to keep growing due to multiple factors, including the rollout of the federal Affordable Care Act in 2014 and the increasingly overweight public. (The state's population has nearly doubled since 1991.)

Area doctors say much of the spiraling cost is due to the way health care services are paid for, echoing a study earlier this year by the Berkeley Forum for Improving California's Healthcare Delivery System.

That report, by a

blue-ribbon group that included Blue Shield of California, Kaiser Permanente and Sutter Health in collaboration with the UC Berkeley School of Public Health, called for sweeping change in the economic model for California health care.

The current model, known as fee-for-service, is not the right medicine for Californians, who are already spending $23 a day on health, said Dr. Stephen Steady, a gastroenterologist who is president of the Sonoma County Medical Association.

Fee-for-service bases patient payments on the number of tests and treatments performed rather than overall efficiency

or the medical outcome. That encourages a “duplication of services that may not be needed,” Steady said.

When each independent health care provider is ordering the tests and imaging needed to treat patients — and billing for his or her services — the costs “just start adding up,” Steady said.

And that fragmented care, he said, underlies the California Association of Health Plans report, which said that as much as 30 percent of nation's health expenditures — $810 billion in 2011 — goes to unnecessary tests, treatments, drugs and hospitalizations.

“The incentives are not aligned in an effort to control costs,” Steady said.

By dramatically cutting back on the fee-for-service model, California could trim $110 billion from health care from the estimated $4.4 trillion expenditures between now and

2022, according to the Berkeley Forum report.

That would cut costs an average of $802 per household per year over that period, and $1,422 per household in 2022, the report said.

“It is time for fundamental change. It is time for action,” the report said, calling its plan “a transformational, bottoms-up approach to creating a more affordable, cost-effective healthcare system.”

Instead of fee-for-service, which accounts for 78 percent of the state's health care expenses today, the report calls for more integrated systems, similar to Kaiser's, that draw primary care physicians, specialists, hospitals and even nursing homes into a collaborative effort to provide patient care.

The provider groups would operate under a “risk-adjusted global budget” for each patient, a wonkish term for setting a target cost based on a person's diagnosis.

This bundled care system provides penalties for exceeding the cost targets and rewards for staying within them, Steady said.

“We are learning that we need to work together for the patient to benefit the most,” said Patrick Johnston, president of the health plans association, which represents 39 plans including Aetna, Anthem Blue Cross, Blue Shield, Health Net and Kaiser.

The Berkeley Forum report proposed reducing the share of fee-for-service expenditures from 78 percent of the state's health care spending to just 50 percent by 2022. It would do this by boosting the number of Californians now enrolled in integrated systems, 29 percent, to 60 percent.

Dr. Brad Stuart, director of Sutter Health's home care program in Santa Rosa, said this is one of many calls for increasing integrated care, which he supports.

“Providers are compelled to be more responsible and accountable for what they do,” he said. “They only lose money if they run up the costs.”

Sutter Health, which operates 24 hospitals in Northern California and is building a new $284 million hospital in Santa Rosa, is taking a step toward integration with the launch of a health insurance plan called Sutter Health Plus.

The new plan is expected to be available for enrollment in Sonoma County in the fall of 2014.

Kaiser Permanente, founded in 1945, pioneered the concept of combining health insurance, physicians, and hospitals into a single organization. It remains the nation's only fully integrated system.

Dr. Walt Mills, a Kaiser family practice doctor, described how it worked recently on behalf of a cancer patient.

Mills was studying the patient's magnetic resonance image and, in order to consult with an oncologist, walked 30 yards down the hall at Kaiser's Santa Rosa Medical Center.

The two got on a conference call with a Kaiser neurosurgeon in Redwood City and in five minutes determined a care plan that would have taken days or weeks to develop outside an integrated system, he said.

Mills, who was in a private practice with about 50 percent fee-for-service compensation for 17 years before joining Kaiser, felt compelled to join a system that he said saves money and improves the quality of patient care.

Kaiser is 10 percent more cost-efficient than the average health maintenance organization and 15 percent ahead of all plans in the markets Kaiser serves, according to a report in April by Aon Hewitt, a consulting firm commissioned by Kaiser.

Kaiser serves more than 7 million members with 36 hospitals and 12,000 physicians in California. Sonoma County membership totals nearly 188,000.

Fee-for-service is “the elephant in the living room” of health care cost inflation, said Dr. James DeVore, medical director of the Annadel Medical Group of physicians affiliated with Santa Rosa Memorial Hospital.

Costs “will drop considerably,” he said in an e-mail, as health care moves “away from a hospital-based focus of managing illness” to an integrated model that stresses prevention, wellness and “aggressive management” of chronic illnesses like diabetes.

The United States gets a poor bang for its health care buck, said Dr. Mary Maddux-Gonzalez, chief medical officer of the Redwood Community Health Coalition, a network of clinics and health centers.

Health spending per capita in the U.S. was $8,233 in 2010, 56 percent more than Switzerland, the next highest nation, and more than twice as much as the average in seven other developed countries in Europe, according to a California Healthcare Foundation report.

But Americans' life expectancy, 78.7 years in 2010, was 25th in the world in 2011, while deaths due to medical errors, estimated at about 200,000 per year, rank among the

nation's top five

causes of death.

“We are not getting value commensurate with what we're spending,” said Maddux-Gonzalez, the former county public health officer, who also faulted the fee-for-service system.

“The financial incentives are not lined up for good outcomes,” she said.

House to Vote to Repeal Individual Health-Care Mandate

Bloomberg News y Kathleen Hunter – Jul 11, 2013 8:45 AM PT.

House Speaker John Boehner said the chamber will vote next week to delay the 2010 health-care law’s requirement that most Americans carry health insurance.

At his weekly news conference today, the speaker said it’s not fair for President Barack Obama’s administration to keep that provision in effect while postponing enforcement of the requirement that businesses provide their workers with insurance.

“I believe it’s unfair to protect big business from Obamacare but not individuals and families,” Boehner said.

The

Republican-controlled House previously has voted 37 times to repeal or defund all or part of the Affordable Care

Act, enacted with

only Democratic votes. Republicans have sought to make the plan a symbol of government overreach.

The employer requirement is being delayed until 2015, the administration said last week

Starting on January

1, 2014, some health plans will need to include a certain set of benefits. These are called essential health benefits. The information below can help you learn what health care services are considered essential, which plans have to offer them and how your clients may be affected by them.

What are essential health benefits?

Essential health benefits are a set of 10 health care categories that plans for individuals and small businesses must

cover. If members go to a doctor or hospital in network, they pay what they would pay for in-network care. If they go to a doctor or hospital outside the network, they may have to pay the out-of-network cost, unless it is an emergency. If the plan does not cover care out of network, these services may not be covered out of Dessuten kan du ogsa lese litt om hvordan du kan spille bestenorskecasinos.com pa nett, helt trygt. the network. These benefits apply to plans for individuals and small businesses both inside and outside the exchanges.

What are the 10 essential health benefits categories?
• Outpatient services
• Emergency services
• Hospital stays
• Maternity and newborn care
• Mental health and substance abuse services, including behavioral health treatment
• Prescription drugs
•Rehabilitation services and devices like durable medical equipment and prosthetics
• Lab services
• Preventive and wellness services and, long-term disease management
• Pediatric services, including dental and vision care

Are grandfathered plans affected by essential health benefits?
A grandfathered health plan is a plan that was in effect on or before March 23, 2010, and certain changes have not been made to it since then. Grandfathered plans do not have to include all essential health

benefits.

Why is there a need for essential health benefits?
With essential health benefits, people who buy health insurance are assured they’ll have coverage of a full range of services.

Do limits apply to essential health benefits?
All plans or policies that began on or after September 23, 2010,will no longer limit how much they’ll pay out for essential health benefits in network. This applies to all plans and policies, except grandfathered individual health insurance plans.

Do essential health benefits have to be included in all plans on January 1, 2014?

No. The essential health benefits must be included in plans for individuals and small businesses on the first day of the plan year on or after January 1, 2014. The requirement does not apply to grandfathered plans or plans for large businesses. If an essential health benefit is covered as part of a plan, there cannot be dollar limits on the benefit.

The Washington Post by Sarah Kliff and Sandhya Somashekhar –

July 5, 2013:

The Obama administration announced Friday that it would significantly scale back the health law’s requirements that new insurance marketplaces verify consumers’ income and health insurance status.

Instead, the federal government will rely more heavily on consumers’ self-reported information until 2015, when it plans to have stronger verification systems in place.

The delay comes after a Tuesday announcement that the federal government would postpone for one year a requirement that employers with 50 or more full-time workers provide health coverage.

“I think that Health and Human Services is doing the best that it can under the circumstances,” said Sara Rosenbaum, a health policy professor at George Washington University.

The verification systems are meant to determine who qualifies for new benefits under the Affordable Care Act. The law includes tax subsidies to purchase health insurance for Americans who earn less than 400 percent of the poverty line, about $45,000 for an individual.

Those earning less than 133 percent of the poverty line — about $15,000 — will qualify for Medicaid coverage in the District and 23 states that have decided to expand the program.

The federal government also needs to know who receives health insurance coverage from an employer. Consumers who receive affordable health insurance from their company under a policy that costs less than 9.5 percent of their income do not qualify for tax credits under the Affordable Care Act.

New regulations published Friday scaled back the federal government’s role in determining whether information submitted to new health marketplace is accurate.

After encountering “legislative and operational barriers,” the federal government will not require the District and the 16 states that are running their own marketplaces to verify a consumer’s statement that they do not receive health insurance from their employer.

“The exchange may accept the applicant’s attestation regarding enrollment in eligible employer-sponsored plan . . . without further verification,” according to the final rule.

The federal government will, however, conduct an audit for the states where it is managing the new insurance Web portal.

The rule also scaled back states’ responsibilities to double-check the income levels that consumers

report, which determine any tax subsidy they receive.

While initial regulations had proposed an audit of each consumer who reported an income significantly lower than what federal records indicated, the final rule scaled that back to an audit of a statistically significant sample of such cases.

For individuals who are not part of that sample, “the Exchange may accept the attestation of projected annual household income without further verification,” it said.

It

is not unprecedented for the government to use the honor system in situations in which it collects data on millions of individuals, said Timothy S. Jost, a law professor at Washington and Lee University in Lexington, Va., and a consumer advocate. For example, people are expected to report their cash tips to the Internal

Revenue Service as income.

“An awful lot of the economy is a cash economy,” he said. “If we had to verify every statement that was made to the IRS, our economy would collapse.”

In addition, lying on the exchange form carries with it a penalty of as much as $25,000. An individual who fibbed on his income would also have to pay back the extra subsidies when filing a tax return for 2014.

Still, Jost said, Friday’s rule shows that the government is in “triage mode. They have tried to figure out what they need to do right now and what they can delay until later. And they are very low on resources.”

Ian Spatz, a senior adviser at Manatt Health Solutions, agreed.

“As crunch time is coming, they’re just muddling through and figuring out short cuts,” he said. “It might not be elegant, but this is how they’re trying to make the law work.”