Aetna exchange premiums lower than competitors; all higher than CA rates

Wednesday, Aetna submitted proposed rates for Access Health CT, the state health insurance exchange. Averaging $364 per month for individual coverage. By tier premiums average $177 for Catastrophic coverage, $356 for Bronze, $487 for Silver and $477 for Gold. (Yeah, I don’t get that either). Aetna follows HealthyCT and ConnectiCare proposals averaging $427 and $397 per member per month for all tiers. In comparison, the most affordable Silver option in California’s exchange is $276 pmpm, as much as 29% lower than current offerings. California’s exchange negotiated premiums with insurers. Connecticut policymakers still have options to lower premiums in our exchange. SB-596, directing the exchange to negotiate premiums with insurers, is awaiting a vote in the House.

Active purchasing bill passes Senate

This afternoon the Connecticut State Senate passed SB-596, a bill directing Access Health CT, the Connecticut Health Insurance Exchange, to negotiate with insurers to keep premiums affordable for consumers and small businesses. Other states and most large employers negotiate with insurers to control costs. The bill passed 23 to 12 on a party line vote. Republicans offered five amendments to dilute or delay negotiation which were defeated. Advocates for consumers and small businesses supported the bill in testimony; insurers were opposed. The bill now travels to the House for a vote.

Rate Shock in California!––The New Health Insurance Exchange Plans––Comparing Apples to Oranges to Grapefruit

I have to say I was surprised with the press reports last week that there wasn't "rate shock" in California when the California exchange offered preliminary information about their new plans and rates.

At least one prominent health actuarial group had predicted a 30% baseline increase in costs for California's new health insurance exchange plans under the Affordable Care Act (ObamaCare").

As

CA PCIP Reverting to Federal PCIP on July 1

Beginning July 1, 2013, California will no longer operate the state's PCIP. 

All current CA PCIP subscribers will be required to transition to the federal PCIP in order to maintain some kind of PCIP coverage through 12/31.  Premium rates and provider network for CA PCIP will no longer be applicable.

The CA PCIP will send out a notification letter in May to provide subscribers with instructions. In June, the National Finance Center, the enrollment administrator for the federally-run PCIP, will send out an Enrollment Letter that includes information about the federally-run PCIP plan, how much it costs, and how to activate coverage. Subscribers will not need to complete a new application to qualify for the federally-run PCIP.  To activate their new coverage on July 1, and receive their PCIP ID cards by that date, subscribers must pay their first month’s premium by the deadline stated in that letter.  

If a subscriber is in the course of treatment or has received prior-authorization for services, he or she will be mailed guidance about transition of care. It is critical that he or she follow required pre-authorization of benefits procedures for hospitalization, durable medical equipment or supplies, transplants, skilled nursing, long-term acute care or rehabilitation facility admission, spinal fusion surgery or cancer treatment plans anticipated to occur on or after July 1.  This is necessary even if the subscriber was already authorized with the California PCIP. 

PCIP remains closed for all new enrollments and this transition only applies to those California residents who are currently enrolled in the CA PCIP.

Dave
www.davefluker.com

Covered California Announces Exchange Health Carriers

This morning, Peter Lee announced the insurance carriers selected to provide coverage to California residents in the California Health Benefits Exchange for individual & family health plans.  

A total of 13 health insurers, some regional and some state-wide, will provide health plans to the Covered California exchange.  They are:

*Alameda Alliance for Health
Anthem Blue Cross of California
Blue Shield of California
*Chinese Community Health
*Contra Costa Health
HealthNet
Kaiser Permanente
*LA Care  Health Plan
*Molina Healthcare
*Sharp Health
*Valley Health Plan
*Ventura County Healthcare Plan
*Western Health Advantage

*- denotes regional health plans not offering state-wide coverage plans

The state will be divided into 19 regions or rating areas for health plans and premiums.  All areas will have at least two health carriers available (LA will has six) with metro areas having the highest number of carriers and rural areas less.

Two requirements placed on the participating carriers are good networks of providers and affordable premiums.  

Covered California is an 'active purchaser'  and some plans either withdrew from consideration or were rejected from consideration because they would not or could not meet the exchange requirements.

Dave
www.davefluker.com

Aetna, UnitedHealth and Cigna Bail On Covered California Exchange!

On the eve of the announcement of the tentative plans and rates for the Covered California Health Benefits Exchange,  LA Times has leaked three non-domestic carriers will NOT provide health plans to individuals & families in Covered California.

Aetna, Cigna and United Healthcare have all declined to participate in Covered California which opens to new enrollments on October 1, 2013.

That will leave the three major carriers who currently control 87% of the individual and family market in California--Anthem Blue Cross, Blue Shield of California and Kaiser.  I expect other player such as Health Net to be involved as well as a new Sutter HMO co-op plan.

We will know more details tomorrow afternoon once the Exchange webcast is over.

Those who currently have health plans with Aetna or Cigna (UHC does not sell individual & family plans in California) and wish to enter the exchange will have to discontinue their coverage with those carriers and move to a new insurance company.

While the non-exchange market may contain these carriers, be aware that there is legislation in committee in Sacramento that seeks to bar the sale of any health plan outside of the exchange that is not a mirror of a plan sold inside of the exchange.  If this passes, those three carriers would be effectively barred from selling ANY health insurance to individuals & families in California.

LA Times Article

Dave
www.davefluker.com

The Value of a Dollar - Obamacare Subsidy

I ran some calculations today in the midst of discussion with fellow agents concerning the subsidy calculations for Obamacare.

I wanted to demonstrate that a pay raise or increase in income of a very small amount could have serious consequences in the new healthcare reform environment.  In this case, the addition of $1 of annual income costs this person $418 monthly subsidy ($5016 yearly) and potential IRS clawback of any subsidy this person was not entitled to receive.

This was based on a single person age 60 however the concept is the same (amounts of subsidy are different) across all ages.

As a broker I would be very leery of suggesting an employer who sends his/her employees to the Covered California Exchange compensate those employees with help that could raise their taxable income.

You can find this calculator and other critical California healthcare reform information on my web site at http://www.davefluker.com/healthcare_reform.html

If you don't see the embedded video above, you are not on my blog and are viewing stolen content.  My blog is available at http://davefluker.blogspot.com and also on my site at

http://www.davefluker.com/blog.html

Dave

www.davefluker.com

The Mythical $95 Obamacare Penalty

I hear this quite a bit from the public but find it a bit disconcerting when I hear it from agents and brokers who are supposed to be better versed in these thing.

The myth is that the penalty for not complying with the Obamacare rule of having creditable qualified health coverage will be $95 in 2014.  Well, if  a person has an adjusted income of $9500 annually then yes, the penalty is $95 in 2014.  Of course, that person would qualify for no-cost Medi-Cal (CA Medicaid) and would be able to obtain qualified health coverage and avoid the penalty.

The actual penalty for 2014 is $95 OR 1% of income, whichever is greater.  By 2016 this goes up to 2.5% of income.  Below I have broken out the actual numbers for the penalty for California residents should they choose to avoid buying a qualified health plan under Obamacare.

Income               2014               2015               2016
                           1%                   2%                 2.5%

$20,000             $200                $400                 $500
$30,000             $300                $600                 $750
$40,000             $400                $800                 $1,000
$50,000             $500                $1,000              $1,250
$75,000             $750                $1,500              $1,875
$100,000           $1,000              $2,000              $2,500


As you can see, depending on income level, not having qualified health coverage under Obamacare can be a bit costly in terms of penalty.  When you hear someone say "it's just $95", you can smile because you know the truth.

Dave
www.davefluker.com
www.gilroyhealthinsurance.com

Insurance exchange rate proposals in for HealthyCT

Insurance premiums for HealthyCT, the new nonprofit health insurer co-op, have been posted on the insurance dept.’s website. HealthyCT is the only insurer that has submitted rate proposals for 2014 so far, despite an April 30th due date. Average monthly premiums for individuals will be $427/month and for small groups $445/month. While the benefit plans will change next year and previous prices are not strictly comparable, in 2010 individual premiums in CT averaged $306 per month. 2014 rates will vary by customer based on age, residence, and the plan selected; rates must still be approved by the insurance department. Policymakers have options to control premium increases but they must act soon to be effective.

Still waiting for insurance exchange rates, UnitedHealthcare is out

Rate proposals by insurers planning to participate in CT’s health insurance exchange were due to the Insurance Dept. last Tuesday, but none have been filed according to the Hartford Courant. However HealthyCT says they filed with the department on Friday. The exchange is blaming federal regulations and delays. UnitedHealthcare notified the exchange last week that they will not be participating in the exchange, leaving Anthem, Aetna, HealthyCT, and ConnectiCare. Insurer rates have been eagerly anticipated by advocates and others hoping for affordable premiums. Concerns about rate shock have been heightened by 25% increases in rates submitted to Maryland’s exchange. Several options are available to the exchange and state policymakers to keep premiums affordable, but some require legislative action. The legislative session ends in four weeks.

“RATE SHOCK” Fact or Fiction

Since the passage of the Affordable Care Act one of the principle concerns has been: what will health insurance cost. The potential fallout from high price health insurance has been termed “RATE SHOCK”.

Stakeholders and advocates have voiced concerns over “Rate Shock” from very early on. The CEO of the CT Health Insurance Exchange, Connecticut’s Health Care Advocate and the Deputy Insurance Commissioner have all voiced concerns publically over what impact “Rate Shock” will have once the Exchange is open for business. It has been a discussion at Exchange Board Meetings.

So if “Rate Shock” is a real concern voiced by so many deeply involved in the success of health care reform, then why would the Universal Health Care Foundation of CT characterize “Rate Shock” as a “myth” and “scare tactic” in a recent blog post? Their position defies words and logic.

Their opinion that a “large majority” of the uninsured and underinsured will be eligible for Medicaid or subsidize is correct BUT there is a huge portion of our population that is going to need to buy health insurance with little or no subsidy -- in short they will be buying it retail.

If this portion of our population sees the health insurance options available as too expensive, they could simply opt out of buying coverage at all and just pay the penalty. This would not be good for the overall success of the Exchange and health care reform in general. In short, “Rate Shock” With Maryland’s Exchange just announcing their plans will reflect a 25% price increase, there is no reason to believe Connecticut will be any different.

Should we be “scared”? No.. Should we be informed, educated and involved? Yes.. Should legislation be passed directing the Exchange to use “Active Purchasing” Yes.. Should legislation be passed to adjust the “Medical Loss Ratio”? Yes. Should legislation be passed directing the Exchange to use “secret shoppers to insure we have true “network Adequacy”? Yes.. Should we work to make the best health insurance buying environment possible? Yes. Should we mischaracterize the reality of “Rate Shock” as a “myth” and “scare tactics”? No

Kevin Galvin Small Business For A Healthy Connecticut

Health Insurance Rate Shock: What Connecticut Can Do

All indications are that Connecticut health insurance costs will rise significantly next year. Fortunately there are several tools available to policymakers to mitigate that trend for Connecticut consumers and small businesses who will be mandated to secure coverage as of January 1st. A new brief outlines state affordability options including a stronger state MLR limit, active purchasing, reinsurance, capping rate increases, limiting insurer losses, and state supplemental subsidies. It is also critical to address the underlying causes of rising health costs that drive insurance prices including misaligned payment incentives, overtreatment, poorly coordinated care, waste, excessive administrative costs, and consumer disengagement. Affordable insurance coverage is critical for successful health reform. State policymakers should use every available tool.

Healthcare Reform Application Video

The video below outlines the application and health insurance purchasing process per HHS and CMS.  As mentioned in my earlier blog post today, the process looks to be two separate steps to complete plan enrollment.

Covered California will be the California state exchange and there may be some variations on this that are state-specific, we will have to wait and see.  I suspect though that the process will be generally uniform across the country whether it's a state or federal exchange.

As always, if you don't see a video below, you are viewing copied and unauthorized content stolen from my blog.  My blog is http://davefluker.blogspot.com  

Reform Application Process Video

Dave
www.davefluker.com

For more information on California Healthcare Reform, visit the California Healthcare Reform section of my web site at 

http://www.davefluker.com/healthcare_reform.html

Exchange Application Process As It Looks

CMS has released a new Obamacare application form which has been shortened down considerably.  About 3 pages for individuals and 7 pages or so for families.  This simplified will make the enrollment task much easier for most people.  There is also a third application form for those who wish to purchase inside of their state's exchange (be it state, partnered or federal - California will be state) who do not receive a subsidy.

Looking at the applications it is becoming clearer that the process to enroll, be it online or via paper application, will be a two step process that will likely have to be completed in two separate sittings.

The "Application" form is a form used to secure the right to shop in the exchange (now referred to as "marketplace") for coverage and pick a plan.

Link to individual application

Once the application is approved, then you will be given some kind of permission to actually go into the marketplace and make your purchase.  Paper application states 1-2 weeks after submission to get permission.  I expect online will be faster, however we don't yet know what the lag time will be between submission online and approval to shop.

For those purchasing their coverage outside of the exchange in the open market (private exchange), this application process will most likely not apply.  

Remember, the initial 'right to shop' application is for qualification, not plan selection, and the information is vetted between Social Security, IRS and Department of Homeland Security.

For more information on California specific healthcare reform, visit the California Healthcare reform section on my web site at 

http://www.davefluker.com/healthcare_reform.html

 Dave
www.davefluker.com