Affluent Boomers Terrified by Health Care Expenses

The Affordable Care Act (ACA) may be positively influencing the rise in health care costs, at least in the short run, but more than 62 percent of pre-retirees say they are “terrified” of what health care costs may do to their retirement plans. That’s the feedback from this year’s Nationwide Retirement Institute survey.

Based on feedback from 801 U.S. adults ages 50 or older with a household income of $150,000 or more, 72 percent say one of their top fears in retirement is their health care costs going out of control. More than half (55 percent) believe the ACA will increase those costs, and more than one-quarter of employed affluent boomers (26 percent) now believe they will never retire.

The attention the ACA has received during the past year has increased the percentage of pre-retirees who feel very confident to confident that they know their personal benefits and consequences of the ACA (32 percent versus 24 percent). Nevertheless, pre-retirees are more likely than last year to say they expect their biggest expense in retirement to be the cost of health care (51 percent this year as compared to 43 percent in last year’s survey).

Many Americans like aspects of the ACA, such as guaranteed coverage and access to multiple insurers; however, 64 percent of affluent boomers believe the ACA will be a drain on the U.S. economy. Forty-five percent say they would delay their retirement if they had to buy their own health insurance. More than one-quarter of parents say they would delay retirement to keep their children on their employer-based insurance, which permits coverage through age 26.

Menu Changes Coming Thanks to ACA

While most people associate the Affordable Care Act (ACA) with a mandate to have health insurance, one of the lesser known ACA provisions (at least until recently) is a rule requiring new nutrition labeling.

The posting requirement, which follows in the footsteps of regulations already enacted in California and New York City, will give consumers more information about the calories in the foods they buy at different kinds of venues, ranging from sit-down and drive-through restaurants to grocery stores, movie theaters, and even some vending machines.

The new labeling affects meals and take-out at restaurants; made-to-order sandwiches (at restaurants, grocery stores, and delicatessens); salad and hot-food bars; pastry and bagels at bakeries or coffee shops; popcorn, ice cream, and hot dogs purchased at a movie theater or amusement park; warehouse store pizza slices; and some alcoholic beverages. It also applies to vending machines if the operator has 20 or more machines.

Since more than 40 percent of all food spending is on food consumed away from home, health experts hope making calorie and related information available will help consumers make more-informed choices. Time will tell as the new regulations on food labeling are implemented over coming months.

Part-timers Struggling to Find Full-time Work

A new survey by CareerBuilder, the online career website, finds one-third (32 percent) of part-time workers would like to work full time, but they cannot find a full-time job. Of those who want to work full-time, 31 percent says they are the breadwinner for their families and 40 percent say they are struggling financially. Of all part-time workers surveyed, 25 percent say they are working two or more part-time jobs.

“Though we’re seeing an uptick in full-time, permanent hiring, many workers are still having difficulty finding positions in their field of expertise,” says Rosemary Haefner, vice president of Human Resources at CareerBuilder. “For some, a part-time job is just a means to a paycheck; for others, it’s a preferred work arrangement or stepping stone.”

During a time when unpaid internships are increasingly under attack, including recent lawsuits against NBCUniversal, CBS, Conde’ Nast, Warner Music, and others, nearly two-thirds (62 percent) of those surveyed by CareerBuilder said they would work for free if it gave them the opportunity to prove the value they could bring as a full-time employee.

Part-time workers rarely have health care benefits, or if they do, the cost for the coverage is often not subsidized by their employer. In October, Wal-Mart announced it would eliminate health coverage for employees working fewer than 30 hours a week beginning in 2015.

Of those part-time workers taking part in the CareerBuilder survey who say they want to work full time, 27 percent have a four-year degree or higher, eight percent have an associate degree, 18 percent have attended college, and seven percent have participated in a job-specific training program after high school. Forty percent have a high school degree or less.

40 Percent Say Covered California Not Working

A new survey by the Public Policy Institute of California (PPIC) finds nearly four in 10 Californians (39 percent) believe the Covered California public health insurance exchange is not working too well or not at all.

That compares to 52 percent of those surveyed who say the state exchange is working well, down two percent from a May survey. Nine percent of respondents said they did not know how the exchange is performing.

Affordable Care Act (ACA) open enrollment for 2015 began in mid-November and continues through February 15, 2015. The latest PPIC survey found forty-six percent of Californians have a favorable view of the health reform law, while 43 percent expressed an unfavorable view.

Nationally, the Kaiser Family Foundation found in their November poll that 46 percent of Americans have an unfavorable view of the ACA compared to more than one-third (37 percent) who view it favorably.

Covered California reported that more than 11,000 residents enrolled in coverage for 2015 during the first four days of open enrollment. The state exchange’s target for year two of the ACA is 1.7 million Californians. About 1.2 million signed up for health coverage through Covered California in the inaugural open enrollment.

Nearly 500,000 Sign Up for ACA Coverage in Week One

Traffic on the website exceeded three million people during the first week of the Affordable Care Act (ACA) open enrollment period for 2015. More than one million applications have been submitted so far and more than 460,000 residents have already signed up for coverage according to the U.S. Department of Health & Human Services (HHS).

In contrast to October 2013, when the inaugural open enrollment was plagued with website and call center problems, there were no significant outages reported this year. HHS Secretary Sylvia Burwell told reporters more than one million people spoke with a call center representative in the first week of open enrollment for 2015. 

Thirty-seven states are offering coverage through the federal marketplace, while 13 states and the District of Columbia are running their own separate insurance marketplaces. More companies are making coverage available for 2015, including UnitedHealthcare, which expanded to 23 states after offering exchange plans in just five states for 2014.

About half of those who have signed up for insurance for 2015 do not currently have health insurance through the federal marketplace. That is significant since the goal of the ACA is to reduce the number of uninsured Americans. It is estimated about 32 million in the U.S. lack health coverage, a number that is down about 25 percent from last year according to HHS.

Covered California, the Golden State’s public health insurance exchange, reported that more than 11,000 people had selected plans in the first four days of open enrollment.

State Regulators Criticize Blues’ Provider Networks

California’s Department of Managed Care released a highly critical report last week saying Anthem Blue Cross and Blue Shield of California haven’t been upfront with current and prospective members concerning doctors participating in the state’s public health insurance exchange, Covered California.

According to the state, neither of the two health plans has corrected three of four problems identified by regulators. Among the issues is that one-fourth of the physicians listed by Anthem and Blue Shield were not taking Covered California patients or were not found at the address listed by the health plans.

“We found the provider directories made available to the public had significant errors,” said Shelley Rouillard, director of the California Department of Managed Care. “When you have a quarter or more of physicians that aren’t available, that is significant.”

The state’s report is based on a survey of doctors listed in the provider directories for the two insurers. Doctors were asked about their contracting with the plans for members enrolled in the state exchange – and whether they were accepting new patients.

Anthem and Blue Shield, which account for nearly 60 percent of Covered California enrollment, criticized the report saying the state’s survey was flawed and the report exaggerates a problem they are currently working to correct.

Consumer advocates are pushing the state to impose substantial fines on the two insurers, although it’s not known what penalties could be levied. 

New Small Business Private Exchange in Texas

Blue Cross and Blue Shield of Texas (BCBSTX) announced this month the launch of its “Blue Directions for Small Business” private exchange solution for companies with one to 50 employees. The new program offers employers health and dental benefit plans and customized contribution strategies on a convenient, user-friendly platform that also allows employees to choose group plans or individual marketplace plans.

Available to new and existing BCBSTX small business clients and their employees, Blue Directions accommodates a defined contribution or defined benefit strategy to help employers control their employee benefit costs. The online exchange system helps employees navigate their health insurance coverage options in a new and user-friendly way. Employees can determine if they are eligible for financial assistance through the federal health insurance marketplace using the Blue Directions subsidy eligibility estimator.

“Our new private health care exchange for small business takes the complexity out of designing and administering employee benefit programs by helping business owners make informed decisions, anticipate expenditures, and simplify year-round benefits administration,” said Bert Marshall, President, Blue Cross and Blue Shield of Texas. “As the only health insurance carrier today that can offer both group and individual plans in every rating area of the state, BCBSTX is uniquely positioned to serve small businesses in need of increased choice and flexibility.”

Blue Cross and Blue Shield of Texas is the largest provider of health benefits in Texas, with a network of nearly 80,000 physicians and 500 hospitals saving five million members statewide. BCBSTX is a division of Health Care Service Corporation, which operates Blue Cross and Blue Shield plans in five states.

Kaiser Permanente Adds 422,000 Enrollees

Enrollment and profits at Kaiser Permanente are both up for the first three quarters of 2014, according to information released this month.

The Northern California-based non-profit health plan added 422,000 new enrollees through September, due in large part to Kaiser’s participation in Covered California and other exchanges established as part of the Affordable Care Act (ACA). The plan also experienced an increase in its commercial and Medicare business.

Kaiser Permanente now has 9.5 million enrollees in eight states and the District of Columbia. More than three-quarters of the health care provider’s members live in California – roughly 7.4 million.

Operating revenue during the third quarter was up more than eight percent from 2013. For the year, operating income jumped 48 percent to $766 million. Profits ballooned to $997 million as compared to $635 million a year earlier. Non-operating income, from investments, increased 49 percent to $900 million.

Kaiser Permanente CFO Kathy Lancaster said in a statement last week the organization’s “efforts to increase efficiencies and effectiveness, while maintaining our focus on meeting the needs of our members and customers, are gaining momentum.”

Last month, Aetna reported strong third-quarter earnings that beat analysts’ expectations; total revenue for the quarter was up 14 percent to $14.73 billion. WellPoint, which will soon change its corporate name to Anthem, reported a national membership boost of approximately two million members for its third quarter and an operating revenue boost of 4.3 percent as compared to Q3 2013.

Covered California Predicting 1.7 Million Enrollees

Officials at Covered California, the public health insurance exchange created as part of the Affordable Care Act (ACA), are forecasting a significant increase in enrollment during the exchange’s second year. After enrolling about 1.2 million for the 2014 plan year, state officials predict enrollment will reach 1.7 million in year two.

The half-million enrollee bump amounts to a 43 percent increase over 2014. Open enrollment for 2015 began over the weekend, on November 15, and it continues through February 15, 2015.

To increase awareness of the open enrollment period, Covered California began its “I’m in” marketing campaign in October. It also kicked off a nine-day, 21-city bus tour that started at the State Capitol last week and included stops in communities across the state. Led by Covered California Executive Director Peter Lee, the tour was part of a $95 million community outreach effort funded in part by the U.S. Department of Health & Human Services (HHS).

Nationally, HHS is forecasting enrollment of nine to 10 million Americans in the federal and state health insurance exchanges by the end of 2015. That figure is lower than the Congressional Budget Office forecast from earlier this year that predicted 13 million people would have health coverage through the exchanges in 2015.

Supreme Court to Hear Health Subsidy Challenge

The U.S. Supreme Court has agreed to hear a challenge to the health insurance premium subsidies that are a core component of the Affordable Care Act (ACA) and the federal health insurance exchange. The Court made the announcement concerning King v. Burwell, a case from the U.S. Court of Appeals for the Fourth Circuit that focuses on tax credits for health insurance purchased through exchanges created under the ACA.

The plaintiffs in the case argue the wording in the ACA statute extends premium subsidies/tax credits only to those persons in states that establish own health insurance exchanges. They also argue that eliminating the subsidies for coverage purchased through the federal exchange undermines the entire ACA because just 14 states and the District of Columbia have established their own exchanges. (Sixteen states and DC will operate exchanges for 2015.)

Since the ACA was enacted in 2010 and exchange enrollment began a year ago, more than eight million individuals have purchased health insurance via the federal and state exchanges. About 4.6 million received credits to purchase their health coverage.

Court rulings on the tax credits and premium subsidies are split, which is why the Supreme Court is looking at the issue. If the Supreme Court rejects the idea of premium subsidies for those purchasing coverage through the federal exchange, the outcome is uncertain. It could push states without exchanges to set up their own marketplaces. Alternatively, some analysts say it could unravel the ACA and destabilize insurance markets. The Rand Corporation recently reported that eliminating tax credits could drive up premiums by as much as 43 percent, while reducing enrollment by 68 percent. A court ruling will come by June 2015.