Consumers Back ACA Subsidies

While there’s a split among Americans about support of the Affordable Care Act (ACA), a new poll conducted by Morning Consult found 58 percent believe health exchanges – whether they are state- or federally-run – should provide subsidies. Fifteen percent of those polled are opposed to subsidies and 27 percent did not offer an opinion.

The ongoing availability of the premium subsidies through the federal health exchange is likely to make its way to the U.S. Supreme Court, following contradictory rulings in July from courts in Washington, DC and Virginia.

Those participating in the August survey of 1,800 registered voters also were asked about confusion over language in the original legislation concerning how the subsidies would work (and whether they apply to the federal exchange as well as state-run exchanges).  Twenty-two percent of respondents said they thought it was a drafting error (to not apply the subsidies to all eligible exchange participants), while 25 percent said Congress intended to limit subsidies (to state exchanges), and 54 percent said they had no opinion or did not know.

Morning Consult found a partisan split on the question, with 39 percent of liberals saying the language (limiting the subsidies) was a drafting error, as compared to 15 percent of conservatives.

Mounting Pressure on Covered California to Add Doctors

The Sacramento Business Journal reported this month on mounting pressure for Covered California, the state’s health benefit exchange, to expand the physician networks for the program’s participating health plans.

The focus is primarily on Anthem Blue Cross and Blue Shield of California; both health plans created narrow networks for their Golden State exchange business.

We reported in June on lawsuits in California and Kansas from individuals who enrolled in Affordable Care Act (ACA) plans, but who allege their health plans purposely misled them about the physicians who were part of their provider networks.

Anthem Blue Cross has expanded its narrow network by 6,300 doctors since January and now has more than 38,000 participating physicians statewide. Blue Shield of California has added 40 more hospitals and 15,000 doctors to its statewide network.

California Senate Bill (SB) 964, which was introduced by State Senator Ed Hernandez in February, requires the California Department of Managed Health Care to annually review Medi-Cal managed care plans and plans sold through the state health exchange to ensure compliance with state standards for network adequacy, timely access, and other measures.

Health plans oppose SB 964, while consumer groups support it. After being passed out of the California Senate in May, the legislation was read for a second time by the Assembly in July 2014, when  was referred back to the Standing Committee on Appropriations for further consideration.

Health Premiums Expected to Increase in 2015

Information coming from state health insurance exchanges, insurance commissioner offices, and carriers across the country shows big swings in the rates for health insurance for 2015.

Covered California, the California Health Benefit Exchange created under the Affordable Care Act (ACA), reported at the end of July a statewide weighted average increase of 4.2 percent, while some plans in the state health exchange said they will be lowering rates for 2015.All 10 of the health insurers participating in the state exchange this year are returning for the open enrollment period that begins in mid-November 2014 and extends to mid-February 2015.

Across the country, eight insurance companies are raising their Florida exchange program rates, while three others are lowering them. A total of 14 companies will compete to sell coverage to Floridians. That includes 11 returning plans and three new insurers. Rate increases range from 11 to 23 percent, while rate decreases range from five to 12 percent. Florida Blue – the Sunshine State’s largest insurer – is increasing premiums by an average of 17.6 percent, while Molina Healthcare has proposed an average 12 percent rate decrease according to state officials. 

Elsewhere, according to an analysis by Avalere Health and media reports, there are both single-digit and double-digit rate changes that will impact Americans across the country. In Rhode Island, a 2.4 increase is expected, while Indiana is looking at a 16 percent jump. In neighboring Ohio, a 13 percent increase is expected while Virginians will see an increase ranging from 3.3 to 14.7 percent. In the Pacific Northwest, Washington residents will see increases of .6 to 26 percent. Oregon is forecasting a modest 1.4 percent decline in rates.

Northern California Providers Uniting for ACO

Two Northern California health care providers, UCSF Medical Center of San Francisco and John Muir Health of Walnut Creek, have signed an agreement to establish a jointly owned and operated organization that will serve as the cornerstone of a new Bay Area health care network committed to delivering high quality care and an exceptional patient experience.

Both organizations will remain independent under the new agreement, but a new company will be created that is equally owned and operated by the two health care providers. The new company would serve as a funding vehicle for future joint initiatives and a shared services organization supporting programs and initiatives focused on delivering better health care at lower costs.

“By combing John Muir Health and UCSF’s strengths, we aim to offer patients the highest value system of care available,” said Mark R. Laren, CEO of UCSF Medical Center and UCSF Benioff Children’s Hospitals. “We look forward to working not just with each other, but with other health organizations throughout Northern California, in order to provide an exceptional health care experience for patients.”

The first of the joint initiatives is investment in a collaborative effort with other health care providers to form a regional health care network, or “accountable care organization” (ACO). Establishing a Bay Area-wide ACO will provide patients from throughout the region with a competitively priced option, close to where they live or work, and include many of the Bay Area's most trusted and respected hospitals, health systems, and physician organizations.

HHS Credits ACA with $9 Billion in Consumer Savings

U.S. Department of Health & Human Services (HHS) Secretary Sylvia M. Burwell has announced consumer savings of $9 billion on health insurance premiums since 2011 as a result of the Affordable Care Act (ACA).

Created through the ACA, the 80/20 rule – also known as the Medical Loss Ratio (MLR) rule – requires insurers to spend at least 80 percent of premium dollars on patient care and quality improvement activities. If insurers spend an excessive amount of revenue on non-patient-focused expenses (such as salaries, overhead, and marketing), a refund is due to consumers.

“We are pleased that the Affordable Care Act continues to provide Americans better value for their premium dollars,” said Secretary Burwell.  “We are continuing our work on building a sustainable long-term system, and provisions such as the 80/20 rule are providing Americans with immediate savings and helping to bring transparency and accountability to the insurance market over the long term.”

An HHS report released in July shows that in 2013 alone, consumers nationwide saved $3.8 billion up front on their premiums as insurance companies operated more efficiently.  Additionally, consumers across the country will receive $330 million in refunds, with 6.8 million consumers due to receive an average refund of $80 per family. 

Many insurance professionals argue the MLR rule makes it more difficult for consumers and businesses to get access to the knowledgeable advisers they need when evaluating their insurance options, since agent/broker commissions are considered administrative costs and have been reduced by some insurers in recent years.

Federal legislation was introduced in 2013 to exclude commissions from the MLR calculation; however, that bill has failed to gain support in the U.S. Senate.

Massachusetts BCBS Marketing Private Exchange

Blue Cross Blue Shield of Massachusetts has added a private health insurance exchange to its offerings in the Bay State. The new exchange, called My Blue Choices, is available to Blue Cross Blue Shield accounts with more than 20 eligible employees.

“Employees will get a lot more choice in product, and the second aspect of this is we encourage a defined contribution approach to purchasing, so (employees) will have a true shopping experience, rather than previously when human resources made general choices for their entire population,” said Larry Croes, vice president of sales at the company.

Until now, employers choosing Blue Cross Blue Shield of Massachusetts would typically pick a contribution strategy (covering, perhaps, 70 percent of an employee’s health care costs) and employees would be able to choose from two different health plans. The new exchange allows employers to select the dollar amount they want to put toward employee coverage. Then employees are free to buy products from a list of available options at their true market price.

The idea of defined contribution isn’t new, Croes told the Boston Business Journal, it isjust that technology is now catching up with the implementation. The Massachusetts plan is using a vendor specializing in private exchanges to customize its shelf product for Blue Cross Blue Shield groups.

Since the beginning of the year, 12 accounts have selected My Blue Choices, including companies ranging in size from 17 enrolled employees to 900 participating employees. More than 5,000 accounts statewide are eligible for the Massachusetts private exchange. 

California Reduces Uninsured Rate by Half in Nine Months

A new survey by the Commonwealth Fund shows the number of working age adults in California has been reduced by 50 percent since September 2013. For the quarter that ended in June 2014, the uninsured rate in the Golden State dropped to 11 percent, down from 22 percent for the quarter that ended in September of last year.

Across the country, the rate declined to 15 percent from 20 percent over the same period. That means an estimated 9.5 million fewer Americans are without health insurance, thanks in part to the Affordable Care Act (ACA), which took effect in January 2014.

Outside of California, which ranked second in the degree of change from last year, Texas saw the sharpest decline in uninsured working adults. In Q3 2013, the Texas rate was 34 percent; in 2014, the rate was 22 percent – a 35 percent drop.

Florida ranked third, with a drop of four percent from 30 percent in 2013 to 26 in 2014. Illinois’ uninsured adult population declined to 8 percent, from 15 percent in 2013. New York saw a decline to 10 percent, down two percent from last year. In Pennsylvania, the number of insured adults remained at 14 percent.

Private Exchange Adopters Think It’s Worth It

Information shared at a recent Private Health Care Exchanges Conference in Chicago suggests employers who were early adopters of private health insurance exchanges think it was worthwhile.

Benefit managers from four small and mid-sized firms spoke at the July event hosted by Employee Benefit News and Employee Benefit Advisor and shared information about their companies’ adoption of an exchange for employee health insurance.

“The biggest challenge is communication and education,” said Leslie Vander Gheynst, director of human resources at Keller Williams Realty in Austin, Texas. “Rolling out this fully integrated technology system, telling your employees about it, and getting out there in a very effective manner can be challenging.”

But all of the speakers agreed it was worth the effort. And the work of their brokers made the experience even more successful.

“We would never have considered a private exchange without having our broker pitch it to us,” said Karen Limestall, human resources manager at Budnick Converting, Inc., of St. Louis. “Our broker sat down with every employee and talked them through the [Exchange enrollment] process.”

“For us, it’s more of a long-term goal to get self-funded,” said Karen Fillback, human resources specialist at Miller-Valentine Group, a real estate management firm in Dayton, Ohio. “We want to get our employees involved {in their health care] and see the cost [of coverage]. When they really decide about the health care cost for themselves and that of their family, that will decrease costs over time.”

Consumers Unsure of Their Insurance Choices

A new survey by PolicyGenius, a digital insurance brokerage and multi-product shopping platform, finds most Americans (50 percent) are not sure if they have the right level of insurance, and they don’t consider it a high financial priority – which could prove to be a critical mistake. An additional seven percent of respondents have no idea what level of insurance they have.

Among other findings from the survey conducted last month were:

  • Nearly two thirds (59 percent) of consumers conduct online research as a first step when shopping for insurance.
  • Almost half (48 percent) feel they have less health insurance than they need and reported their last insurance experience was a negative one.
  • Women are less comfortable than men about their financial decisions, with 41 percent saying they are “not too confident” in contrast to 61 percent of men who say they are “pretty confident” in their choices.
  • Those ages 25 to 34 are least confident in their insurance decisions, with 54 percent reporting too much or not enough insurance.

“There’s a serious gap in insurance understanding, protection, and access in the U.S., which additional studies have shown lead to financial hardships including bankruptcy,” said Jennifer Fitzgerald, co-founder and CEO of the survey sponsor. “We hope to bring the nation closer to the help it needs to avoid these financial hardships and the disasters that underinsurance causes.”

QHP and Exchange Grades May Be Coming in 2015

Public health insurance exchange and Qualified Health Plan (QHP) user experience ratings may not be available until after open enrollment ends for 2015 coverage under the Affordable Care Act (ACA). That’s because rules established by the Centers for Medicare & Medicaid Services (CMS) set the beta testing of “enrollee experience surveys” from January 2015 through April 2015.

QHPs and exchanges have the option to do what they want with the data from the beta test period. CMS and the U.S. Department of Health & Human Services (HHS) have no current plans to post the results publicly. The data could be published by the exchanges or QHPs if they wish.

CMS is already working with one vendor on a psychometric test of the user experience based on a sample of 4,200 consumers. (Psychometrics is the study and objective measurement of skills, knowledge, abilities, attitudes, and validation of questionnaires, tests, and raters’ judgments.) CMS hopes to have 40 exchanges and QHPs conduct surveys in 2015. Results are scheduled for publication by HHS in 2016, including possible data from enrollees in off-exchange plans.

Open enrollment for 2015 coverage under the ACA is set to begin November 15, 2014 and will continue through February 15, 2015. The White House and HHS recently announced self-renewal for those who chose a qualified health plan through the HealthCare.gov website for 2014. That will likely relieve some of the pressure from what is expected to be a busy 2015 enrollment season – with some industry analysts forecasting 12 to 16 million enrollees, up from 8 million in 2014.